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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Company uses derivative financial instruments to minimize the risks and/or costs associated with the Company’s investments and financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to fluctuations in foreign exchange rates.
Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for our interest rate swap and interest rate caps will be reclassified to interest expense as interest payments are made on the Company’s mortgages and term loan credit facility. Refer to Note 2 - Summary of Significant Accounting Policies and Estimates for additional detail.
Interest Rate Contracts
Certain of the Company’s financing transactions expose the Company to interest rate risks, which include exposure to variable interest rates on certain unsecured loans and loans secured by the Company’s real estate. The Company uses derivative financial instruments to minimize the risks and/or costs associated with the Company’s financing and to limit the Company’s exposure to the future variability of interest rates. To mitigate this risk, the Company enters into derivative financial instruments with counterparties it believes to have appropriate credit ratings and that are major financial institutions with which the Company and its affiliates may also have other financial relationships.
The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate fluctuations. To accomplish this objective, we use interest rate swap and interest rate cap contracts to manage our exposure on the variable rate interest debt. The Company has designated its derivative financial instruments as cash flow hedges as defined under GAAP as of December 31, 2023.
Foreign Currency Exchange Rate Derivatives
Certain of the Company’s foreign investments expose it to fluctuations in foreign currency exchange rates. The Company uses foreign exchange rate derivatives, including foreign currency forwards and currency options, to reduce the risk from fluctuations in foreign exchange rates associated with its assets and liabilities denominated in foreign currencies. The Company also uses foreign currency derivatives to hedge the foreign exchange risk associated with certain of its net investments in foreign operations.
The Company enters into currency options that give it the right but not the obligation, to sell the foreign currency amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on differentials in the foreign currency exchange rate and the strike price. The Company uses currency options as an economic hedge of foreign currency exposure related to the Company’s non-U.S. investments.
The following table details the Company’s outstanding interest rate and foreign currency derivative contracts:
Notional Amount
Financial InstrumentsNumber of InstrumentsWeighted Average Maturity DateDecember 31, 2023December 31, 2022
Derivatives designated as hedging instruments
Interest rate swaps511/19/2027$1,242,480 $700,000 
Interest rate caps29/11/2024519,000 568,843 
Derivatives not designated as hedging instruments
Foreign currency forward contracts (1)
312/6/2028131,037 — 
Foreign currency option contracts (1)
211/30/2028104,370 — 
Total $1,996,887 $1,268,843 
__________________
(1)The notional amount reflects the balance we expect to settle at the maturity date based on the contractual strike price at trade execution.
The fair value of the Company’s derivative financial instruments included in the Consolidated Balance Sheets as of December 31, 2023 and 2022, is detailed below.
Asset DerivativesLiability Derivatives
Fair ValueFair Value
Balance Sheet
Location		December 31, 2023December 31, 2022Balance Sheet
Location		December 31, 2023December 31, 2022
Derivative Designated as Hedging Instruments:
Interest rate swapsOther Assets$1,654 $4,379 Other Liabilities$(6,305)$— 
Interest rate capsOther Assets6,945 7,387 Other Liabilities— — 
Total Derivatives Designated as Hedging Instruments$8,599 $11,766 $(6,305)$— 
Derivatives Not Designated as Hedging Instruments
Foreign currency forward contracts— $— Other Liabilities$(6,820)$— 
Foreign currency option contractsOther Assets5,065 $— — — 
Total Derivatives Not Designated as Hedging Instruments$5,065 $— $(6,820)$— 
The following table details the effect of the Company’s derivative financial instruments designated as hedging instruments on the Consolidated Statement of Operations during the year ended December 31, 2023:
Amount of
Unrealized Gain
(Loss) Recognized
in OCI		Location of Gain
(Loss) Recognized in
Income on Derivatives		Amount of Gain (Loss)
Reclassified from
Accumulated OCI into Income
Derivatives Designated as Hedging InstrumentsDecember 31, 2023December 31, 2023
Interest rate swap$(9,045)Interest Expense$13,841 
Interest rate caps(1,309)Interest Expense11,803 
Total Derivatives Designated as Hedging Instruments$(10,354)$25,644 
The following table details the effect of the Company’s derivative financial instruments designated as hedging instruments on the Consolidated Statement of Operations for the period from Inception through December 31, 2022:
Amount of
Unrealized Gain
(Loss) Recognized
in OCI		Location of Gain
(Loss) Recognized in
Income on Derivatives		Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income
Derivatives Designated as Hedging InstrumentsDecember 31, 2022December 31, 2022
Interest rate swap$4,753 Interest Expense$374 
Interest rate caps680 Interest Expense682 
Total Derivatives Designated as Hedging Instruments$5,433 $1,056 
The following table details the effect of the Company’s derivative financial instruments not designated as hedging instruments on the Consolidated Statement of Operations for the year ended December 31, 2023 and for the period from Inception through December 31, 2022:
Income Statement LocationFor the Year EndedFor the Period from Inception through
Derivatives Not Designated as Hedging InstrumentsDecember 31, 2023December 31, 2022
Foreign currency forward contractsOther Income$(6,820)$— 
Foreign currency option contractsOther Income5,065 — 
Total Derivatives Not Designated as Hedging Instruments$(1,755)$—