v3.26.1
INTEREST RATE SWAP DERIVATIVES
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
INTEREST RATE SWAP DERIVATIVES INTEREST RATE SWAP DERIVATIVES
On January 16, 2026, the Company entered into three new swap agreements, effective December 31, 2025, for $83.3 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, which will fix SOFR for the year ending December 31, 2026 at 2.45%, resulting in a fixed interest rate of 4.15% based on the Company’s current leverage ratio. The fixed rate increases if the Company’s leverage ratio increases above 50%. The Company paid aggregate premiums of $2.7 million, including accrued interest receivable of $0.1 million, to buy down the fixed rate below the prevailing market rate. The Company designated the three pay-fixed, receive-floating interest rate swaps as cash flow hedges and therefore the change in fair value of $0.3 million from the swap execution dates to March 31, 2026 was recorded as accumulated other comprehensive income in the Company's condensed consolidated balance sheet as of March 31, 2026.
The following table summarizes the notional amount and other information related to the Company’s derivative instruments as of March 31, 2026 (dollars in thousands). There were no derivative instruments as of December 31, 2025.
Interest Rate Derivative InstrumentsNumber of
Instruments		Notional AmountReference
Rate		Weighted
Average
Fixed Pay Rate		Weighted
Average
Remaining
Term
Interest Rate Swap3$250,000 USD - SOFR4.150 %0.8 years
The following table sets forth the fair value of the Company’s derivative instruments under Level 2 measurement, as well as their classification in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 (dollars in thousands):
March 31, 2026December 31, 2025
Derivative InstrumentsBalance Sheet LocationNumber of
Instruments		Fair ValueNumber of
Instruments		Fair Value
Interest Rate SwapAsset - Interest rate swap derivatives, at fair value3$2,243 — $— 
The following is a reconciliation of the premium paid for the three swaps on January 16, 2026 to the derivative balance as of March 31, 2026 (in thousands):
Premiums paid for off-market interest rate derivatives$2,654 
Less: accrued interest from swap effective date to swap execution date(139)
Investments in off-market interest rate derivatives, net of accrued interest2,515 
Change in fair value (272)
Interest rate swap derivatives$2,243 
The Company, through its Operating Partnership, entered into a five-year swap agreement in May 2022 to fix SOFR related to the variable interest rate on its original $150.0 million Term Loan. The Company designated the pay-fixed, receive-floating interest rate swap as a cash flow hedge. The derivative instrument failed to qualify as a cash flow hedge during the year ended December 31, 2023. Due to the $150.0 million derivative instrument’s failure to qualify as a cash flow hedge, the unrealized gain on interest rate swap derivative of $4.1 million as of December 31, 2022 is being amortized on a straight-line basis as a reduction to interest expense through the original maturity date of the Credit Facility, January 18, 2027. There is no income tax expense resulting from this amortization.
As of March 31, 2026, the Company’s unamortized unrealized gain on interest rate swap derivative in accumulated other comprehensive income and noncontrolling interest in operating partnership in the Company’s condensed consolidated balance sheet amounted to $0.8 million, which will be reclassified from accumulated other comprehensive income and noncontrolling interest in operating partnership as a reduction to interest expense in the Company’s accompanying condensed consolidated statements of operations over the next ten months.