v3.25.1
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 3 Months Ended
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 
Information about our derivative financial instruments at March 31, 2025 and December 31, 2024 is as follows (dollars in thousands): 
Notional AmountFair Value
Contract dateEffective DateExpiration DateAverage Annual Effective Fixed RateMarch 31, 2025December 31, 2024March 31, 2025December 31, 2024
Operating Partnership:
June 11, 2018December 31, 2018December 31, 20252.92 %$125,000 $125,000 $1,117 $1,582 
July 26, 2022January 31, 2023January 31, 20272.60 %100,000 100,000 1,941 2,824 
July 26, 2022January 31, 2023January 31, 20292.56 %100,000 100,000 3,669 5,325 
Total Operating Partnership325,000 325,000 6,727 9,731 
GIC Joint Venture:
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 500 754 
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 500 754 
January 19, 2024October 1, 2024January 13, 20263.77 %100,000 100,000 179 334 
Total GIC Joint Venture
300,000 300,000 1,179 1,842 
Total
3.09 %(1)$625,000 $625,000 $7,906 $11,573 
 (1) Represents the weighted-average effective interest rate of our current interest rate swaps at March 31, 2025.

At March 31, 2025, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 71% of our total pro rata indebtedness when taking into consideration interest rate swaps that are currently in effect.

At March 31, 2025 and December 31, 2024, we had $625.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value as a result of changes in the current market rate of interest on the valuation date.

Our interest rate swaps have been designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique. At March 31, 2025 and December 31, 2024, all of our interest rate swaps were in an asset position. Derivative assets related to our interest rate swaps are recorded in Other assets and derivative liabilities are recorded in Accrued expenses on our Condensed Consolidated Balance Sheets. We are not required to post any collateral related to these agreements and are not in breach of any financial provisions of the agreements.

Changes in the fair value of the hedging instruments are deferred in Accumulated other comprehensive income on our Condensed Consolidated Balance Sheets and are reclassified to Interest expense on our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. In the next twelve months, we estimate that $4.9 million will be reclassified from Accumulated other comprehensive income and recorded as a decrease to Interest expense.
 
We characterize the realized and unrealized gain or loss related to derivative financial instruments designated as cash flow hedges as follows (in thousands):
 Three Months Ended
March 31,
 20252024
Unrealized (loss) gain recognized in Accumulated other comprehensive income (loss) on derivative financial instruments$(1,698)$9,375 
Gain reclassified from Accumulated other comprehensive income to Interest expense$1,969 $3,679 
Total interest expense and other finance expense presented on the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
$19,956 $21,582