Other Assets

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

The following table summarizes the components of other assets:


in thousands	September 30, 2024		December 31, 2023
Deferred rent	$	3,492	$	2,994
Derivative instruments	1,590		4,818
Prepaid expenses	1,463		713
Capitalized tax abatement, net(1)	1,238		1,363
Receivables, net	132		688

Deposits	61		—

Other	613		791
Total	$	8,589	$	11,367

(1)We obtained a tax abatement in conjunction with our purchase of the 3101 Agler property with an expiration date of December 31, 2031. We are amortizing the tax abatement over its remaining useful life as a component of property operating expenses in the condensed consolidated statements of operations. As of September 30, 2024, accumulated amortization of the capitalized tax abatement was $0.4 million.

Derivative Instruments

We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate risk, primarily by managing the amount, sources, and duration of our investments, borrowings, and the use of derivative financial instruments. Specifically, we use derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings.

The following table summarizes changes to the notional amount of our derivative instruments in 2024:


in thousands	Notional Amount as of December 31, 2023		Additions		Termination or Expiration		Notional Amount as of September 30, 2024
Interest rate caps	$	178,500	$	35,000	$	(60,000)	$	153,500
Interest rate swap	52,500		—		—		52,500
Total	$	231,000	$	35,000	$	(60,000)	$	206,000

The following tables summarize the notional amount and other information related to our interest rate caps and interest rate swap as of September 30, 2024 and December 31, 2023:


	September 30, 2024
in thousands	Number of Instruments	Notional Amount(1)		Fixed Amount		Fair Value		Weighted Average Strike Rate/Fixed Rate	Weighted Average Remaining Term In Years
Interest rate caps	3	$	153,500	$	2,108	$	832	3.08%	0.47
Interest rate swap	1	52,500		N/A		758		2.73%	2.58
Total	4	$	206,000	$	2,108	$	1,590


	December 31, 2023
in thousands	Number of Instruments	Notional Amount(1)		Fixed Amount		Fair Value		Weighted Average Strike Rate/Fixed Rate	Weighted Average Remaining Term In Years
Interest rate caps	4	$	178,500	$	2,601	$	3,320	2.64%	1.14
Interest rate swap	1	52,500		N/A		1,498		2.73%	3.33
Total	5	$	231,000	$	2,601	$	4,818

(1)The notional amount represents the amount of the mortgage note borrowings that we are hedging. It does not represent our exposure to credit, interest rate or market risks.

The following tables summarize the effect of interest rate caps and interest rate swaps reported in gain (loss) on derivative instruments, net on the condensed consolidated statements of operations for the three months ended September 30, 2024 and 2023:


	Three Months Ended September 30, 2024
in thousands	Realized gain (loss) on derivative instruments, net		Contractual net interest income (expense)		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Interest rate caps	$	(176)	$	887	$	(1,026)	$	(315)
Interest rate swap	—		351		(1,418)		(1,067)
Total	$	(176)	$	1,238	$	(2,444)	$	(1,382)


	Three Months Ended September 30, 2023
in thousands	Realized gain (loss) on derivative instruments, net		Contractual net interest income (expense)		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Interest rate caps	$	—	$	1,496	$	(949)	$	547
Interest rate swap	—		332		505		837
Total	$	—	$	1,828	$	(444)	$	1,384


	Nine Months Ended September 30, 2024
in thousands	Realized gain (loss) on derivative instruments, net		Contractual net interest income (expense)		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Interest rate caps	$	(122)	$	2,796	$	(2,092)	$	582
Interest rate swap	—		1,046		(740)		306
Total	$	(122)	$	3,842	$	(2,832)	$	888


	Nine Months Ended September 30, 2023
in thousands	Realized gain (loss) on derivative instruments, net		Contractual net interest income (expense)		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Interest rate caps	$	—	$	3,997	$	(1,798)	$	2,199
Interest rate swap	—		746		808		1,554
Total	$	—	$	4,743	$	(990)	$	3,753