The Company uses derivative financial instruments to minimize the risks and/or costs associated with the Company’s investments and/or financing transactions. The Company has not designated any of its derivative financial instruments as hedges as defined within ASC 815 – “Derivatives and Hedging”. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements, fluctuations in foreign exchange rates and other identified risks.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, the Company enters into derivative financial instruments with counterparties it believes to have appropriate credit ratings and are major financial institutions with which the Company and its affiliates may also have other financial relationships.

Certain of the Company’s transactions expose the Company to interest rate risks, which include exposure to variable interest rates on its secured financings on investments in real estate debt in addition to certain loans secured by the Company’s properties. The Company uses derivative financial instruments, which includes interest rate swaps, and may also include interest rate caps, options, floors, and other interest rate derivative contracts, to limit the Company’s exposure against the variability of future interest rates.

The following tables detail the Company’s outstanding interest rate derivatives that were non-designated hedges of interest rate risk (notional amount in thousands):

	March 31, 2021
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Weighted Average Maturity (Years)
Interest Rate Swaps - Investments in real estate debt	49	$	1,050,760	1.1%	LIBOR		5.8
Interest Rate Swaps - Property debt	6	$	1,500,000	1.1%	LIBOR		7.3

	December 31, 2020
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Weighted Average Maturity (Years)
Interest Rate Swaps - Investments in real estate debt	53	$	929,560	1.3%	LIBOR		6.3

Certain of the Company’s international investments expose it to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of its functional currency, the U.S. dollar. The Company uses foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar.

The following table details the Company’s outstanding foreign exchange derivatives that were non-designated hedges of foreign currency risk (notional amount in thousands):

	March 31, 2021				December 31, 2020
Foreign Currency Derivatives		Number of Instruments	Notional Amount		Number of Instruments	Notional Amount
Buy USD / Sell EUR Forward		7	€	219,430	7	€	219,430
Buy USD / Sell GBP Forward		3	£	26,917	2	£	25,093

The following table details the fair value of the Company’s derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset⁽¹⁾ Position				Fair Value of Derivatives in a Liability⁽²⁾ Position
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Interest rate derivatives	$	39,872	$	—	$	14,405	$	46,144
Foreign exchange contracts		6,473		—		540		9,392
Total Derivatives	$	46,345	$	—	$	14,945	$	55,536

⁽¹⁾

Included in Other Assets in the Company’s Condensed Consolidated Balance Sheets.

⁽²⁾

Included in Other Liabilities in the Company’s Condensed Consolidated Balance Sheets.

The following table details the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations ($ in thousands):

			Three Months Ended March 31,
Type of Derivative	Realized/Unrealized Gain (Loss)	Location of Gain (Loss) Recognized in Net Income	2021			2020
Foreign Currency Forward Contract	Realized (loss) gain	Income from investments in real estate debt	$	(4,478	)	$	356
Interest Rate Swap - Investments in real estate debt	Realized (loss)	Income from investments in real estate debt		(14,691	)		(1,711	)
Foreign Currency Forward Contract	Unrealized gain	Income from investments in real estate debt		15,326			2,229
Interest Rate Swap – Investments in real estate debt	Unrealized gain (loss)	Income from investments in real estate debt		54,422			(57,824	)
Interest Rate Swap - Property debt	Unrealized gain	Other income (expense)		17,201			—
			$	67,780		$	(56,950	)

The Company has entered into agreements with certain of its derivative counterparties that contain provisions where if the Company were to default on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company may also be declared in default on its derivative obligations. In addition, certain of the Company’s agreements with its derivative counterparties require that the Company post collateral based on a percentage of notional amounts and/or to secure net liability positions.

As of March 31, 2021, the Company was in a net liability position with one of its derivative counterparties and posted collateral of $9.1 million under these derivative contracts, which amount is included in Restricted Cash on the Company’s Condensed Consolidated Balance Sheet. As of December 31, 2020, the Company was in a net liability position with each such derivative counterparty and posted collateral of $55.9 million under these derivative contracts, which amount is included in Restricted Cash on the Company’s Condensed Consolidated Balance Sheet.