v3.25.2
Derivative Financial Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments and Hedging Activities
Risk Management Objective of Using Derivatives
Our objectives in using interest rate derivatives are to add predictability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps, interest rate caps, and treasury locks as part of our interest rate management strategy. Interest rate swaps primarily involve the receipt of variable-rate and fixed-rate amounts from a counterparty in exchange for our making fixed-rate or variable-rate payments over the life of the agreements without exchange of the underlying notional amounts.
Changes in fair value of derivatives designated as cash flow hedges are recognized in other comprehensive income (loss) and subsequently reclassified into earnings as an increase or decrease to interest expense. During the three and six months ended June 30, 2025, we reclassified gains of $1.0 million and $2.0 million respectively, out of other comprehensive income (loss) into interest expense. During the three and six months ended June 30, 2024, we reclassified gains of $11.3 million and $13.4 million, respectively. As of June 30, 2025, we estimate that during the next 12 months, we will reclassify into earnings approximately $3.8 million of the unrealized gain in other comprehensive income (loss).
Changes in fair value of derivatives not designated in a hedge relationship, or economic hedges, are recognized in (loss) gain on derivative instruments, net, in our condensed consolidated statements of operations once realized. During the three and six months ended June 30, 2025 and 2024, (loss) gain on derivative instruments, net was $(1.9) million, $(15.6) million, $5.2 million, and $14.8 million, respectively.
During the second quarter of 2025, we entered into one interest rate cap not designated as a hedging instrument with a total notional value of $71.7 million to economically hedge our variable-rate property debt maturing in 2027.
Additionally, as of June 30, 2025, we have $781.1 million of notional value interest rate swaps and caps in excess of outstanding non-recourse variable-rate property debt.
The following tables summarize our derivative financial instruments (dollars in thousands):
As of June 30, 2025
Number ofAggregate NotionalDerivative Assets
(included in Other Assets, net)		Derivative Liabilities
(included in Accrued Liabilities and Other)
InstrumentsAmountFair Value
Derivatives not designated as hedging instruments:
Interest rate swaps, pay-fixed, receive-floating
15$4,550,000 $3,414 $(17,593)
Interest rate caps, net (1)
7$1,220,220 $1,575 $(763)
(1)Interest rate caps, net, is inclusive of five interest rate caps with an aggregate notional value of $4.2 billion, offset partially by two sold interest rate caps with an aggregate notional value of $3.0 billion.
As of December 31, 2024
Number ofAggregate NotionalDerivative Assets
(included in Other Assets, net)		Derivative Liabilities
(included in Accrued Liabilities and Other)
InstrumentsAmountFair Value
Derivatives not designated as hedging instruments:
Interest rate swaps, pay-fixed, receive-floating15$4,550,000 $10,177 $(10,111)
Interest rate caps, net (1)6$1,148,500 $11,025 $(5,763)
(1)Interest rate caps, net, is inclusive of four interest rate caps with an aggregate notional value of $4.1 billion, offset partially by two sold interest rate caps with an aggregate notional value of $3.0 billion.