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Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2024
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 September 30, 2024.
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 derivatives:
Notional Amount
Financial InstrumentsNumber of InstrumentsWeighted Average Maturity DateSeptember 30, 2024December 31, 2023
Derivatives designated as hedging instruments
Interest rate swaps71/4/2028$1,344,392 $1,242,480 
Interest rate caps— N/A— 519,000 
Derivatives not designated as hedging instruments
Foreign currency forward contracts (1)
312/6/2028131,037 131,037 
Foreign currency option contracts (1)
211/30/2028104,370 104,370 
Total $1,579,799 $1,996,887 
__________________
(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 our derivative financial instruments as well as their classification on our Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 is detailed below.
Asset DerivativesLiability Derivatives
Fair ValueFair Value
Balance Sheet
Location		September 30, 2024December 31, 2023Balance Sheet
Location		September 30, 2024December 31, 2023
Derivatives Designated as Hedging Instruments
Interest rate swapsOther Assets$— $1,654 Other Liabilities$15,280 $6,305 
Interest rate capsOther Assets— 6,945 Other Liabilities— — 
Total Derivatives Designated as Hedging Instruments$— $8,599 $15,280 $6,305 
Derivatives Not Designated as Hedging Instruments
Foreign currency forward contractsOther Assets$36 $— Other Liabilities$7,043 $6,820 
Foreign currency option contractsOther Assets4,269 5,065 Other Liabilities— — 
Total Derivatives Not Designated as Hedging Instruments$4,305 $5,065 $7,043 $6,820 
The following table details the effect of the Company’s derivative financial instrument on the Condensed Consolidated Statement of Operations during the three months ended September 30, 2024 and 2023:
Amount of
Unrealized Gain
(Loss) Recognized
in OCI		Location of Gain
(Loss) Recognized in
Income on Derivatives		Amount of Gain (Loss)
Reclassified from
Accumulated OCI into Income
Derivatives Designated as Hedging InstrumentsSeptember 30, 2024September 30, 2023September 30, 2024September 30, 2023
Interest rate swap$(28,741)$11,179 Interest Expense$5,470 $3,909 
Interest rate caps397 (38)Interest Expense1,423 3,435 
Total Derivatives Designated as Hedging Instruments$(28,344)$11,141 $6,893 $7,344 
The following table details the effect of the Company’s derivative financial instrument on the Condensed Consolidated Statement of Operations during the nine months ended September 30, 2024 and 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 InstrumentsSeptember 30, 2024September 30, 2023September 30, 2024September 30, 2023
Interest rate swap$5,240 $24,599 Interest Expense$15,835 $9,226 
Interest rate caps6,053 143 Interest Expense6,053 8,701 
Total Derivatives Designated as Hedging Instruments$11,293 $24,742 $21,888 $17,927 
The following table details the effect of the Company’s derivative financial instruments not designated as hedging instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2024 and 2023:
Income Statement LocationThree Months EndedNine Months Ended
Derivatives Not Designated as Hedging InstrumentsSeptember 30, 2024September 30, 2023September 30, 2024September 30, 2023
Foreign currency forward contractsOther Expense $3,084 $— $187 $— 
Foreign currency option contractsOther (Income) Expense(912)— 796 — 
Total Derivatives Not Designated as Hedging Instruments$2,172 $— $983 $—