v3.26.1
Financial Instruments: Derivatives and Hedging
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments: Derivatives and Hedging Financial Instruments: Derivatives and Hedging
In the normal course of business, our operations are exposed to market risks, including the effect of changes in interest rates and foreign exchange rates. We use a variety of commonly used derivative instruments, including, but not limited to, interest rate swaps, caps, collars and floors, and foreign currency forward contracts, to manage these underlying market risks. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not designated as hedges are adjusted to fair value through earnings. If a derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates, currency exchange rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging instruments.
Interest Rate Derivatives
The following table summarizes the notional value at inception and fair value of our consolidated interest rate derivatives as of June 30, 2026 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
Notional
Value		Strike
Rate		Effective
Date		Expiration
Date		Balance Sheet LocationFair
Value
Interest Rate Swap$125,000 3.667 %August 2024December 2026 Other Assets $100 
Interest Rate Swap125,0003.670 %August 2024December 2026 Other Assets 99 
Interest Rate Swap200,0002.591 %February 2023February 2027 Other Assets 1,490 
Interest Rate Swap100,0002.903 %February 2023February 2027 Other Assets 561 
Interest Rate Swap100,0002.733 %February 2023February 2027 Other Assets 661 
Interest Rate Swap50,0002.463 %February 2023February 2027 Other Assets 410 
Interest Rate Swap300,0002.866 %July 2023May 2027 Other Assets 2,622 
Interest Rate Swap150,0003.524 %January 2024May 2027 Other Assets 514 
Interest Rate Swap370,0003.888 %November 2022June 2027 Other Assets 165 
Interest Rate Swap68,6784.466 %August 2024June 2027 Other Liabilities (354)
Interest Rate Sold Cap73,1254.000 %June 2026June 2027 Other Liabilities (140)
Interest Rate Swap100,0003.756 %January 2023January 2028 Other Assets 317 
Interest Rate Swap80,0004.174 %February 2025February 2028 Other Liabilities (278)
Interest Rate Swap204,2883.915 %February 2025May 2028 Other Assets 114 
Interest Rate Swap357,5002.982 %June 2027June 2028 Other Assets 3,349 
Interest Rate Swap225,0003.920 %February 2027January 2029 Other Liabilities — 
Interest Rate Swap177,0003.331 %February 2026February 2029 Other Assets 2,510 
Interest Rate Swap225,0003.865 %February 2027January 2030 Other Assets 11 
Interest Rate Lock100,000— %June 2026December 2026Other Liabilities(34)
Interest Rate Lock100,000— %June 2026December 2026Other Liabilities$(34)
$12,083 
During the three and six months ended June 30, 2026, we recorded unrealized gains of $0.1 million and $3.2 million, respectively, based on changes in the fair value of interest rate derivatives not designated as hedges, which are included in "Purchase price and other fair value adjustments" in the consolidated statements of operations. During the three and six months ended June 30, 2025 we recorded unrealized losses of $1.2 million and $4.3 million, respectively, based on changes in the fair value of interest rate derivatives not designated as hedges, which are included in "Purchase price and other fair value adjustments" in the consolidated statements of operations. During the three and six months ended June 30, 2026, we recorded realized gains of $1.0 million and $5.4 million, respectively, on settled contracts, which are included in interest expense in the consolidated statements of operations. During the three and six months ended June 30, 2025, we recorded gains of less than $0.1 million and $0.1 million, respectively, on the changes in fair value, which is included in interest expense in the consolidated statements of operations.
Certain agreements the Company has with each of its interest rate derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its interest rate derivative obligations. As of June 30, 2026, the fair value of interest rate derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was ($0.7 million). As of June 30, 2026, the Company was not required to post any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $0.8 million as of June 30, 2026.
Gains and losses on terminated hedges are included in accumulated other comprehensive income, and are recognized into earnings over the term of the related obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings. We estimate that ($8.2 million) of the current balance held in accumulated other comprehensive income will be reclassified into interest expense and $2.6 million of the portion related to our share of joint venture accumulated other comprehensive income will be reclassified into equity in net income (loss) from unconsolidated joint ventures within the next 12 months.

The following table presents the effect of our interest derivatives and our share of our unconsolidated joint ventures' interest derivatives that are designated and qualify as hedging instruments on the consolidated statements of operations for the three months ended June 30, 2026 and 2025, respectively (in thousands):
Amount of Gain Recognized in
Other Comprehensive (Loss) Income		Location of Gain Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain Reclassified from
Accumulated Other
Comprehensive Income into Income
Three Months Ended June 30,Three Months Ended June 30,
Derivative2026202520262025
Interest Rate Swaps/Caps$8,575 $(3,081)Interest expense$1,322 $5,906 
Share of unconsolidated joint ventures' derivative instruments4,428 (2,622)Equity in net income (loss) from unconsolidated joint ventures(1,066)975 
$13,003 $(5,703)$256 $6,881 

The following table presents the effect of our interest derivatives and our share of our unconsolidated joint ventures' interest derivatives that are designated and qualify as hedging instruments on the consolidated statements of operations for the six months ended June 30, 2026 and 2025, respectively (in thousands):
Amount of Gain Recognized in
Other Comprehensive (Loss) Income		Location of Gain Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain Reclassified from
Accumulated Other
Comprehensive Income into Income
Six Months Ended June 30,Six Months Ended June 30,
Derivative2026202520262025
Interest Rate Swaps/Caps$18,954 $(15,395)Interest expense$2,693 $11,623 
Share of unconsolidated joint ventures' derivative instruments8,211 (9,070)Equity in net income (loss) from unconsolidated joint ventures(2,108)1,847 
$27,165 $(24,465)$585 $13,470 
The following table summarizes the notional value at inception and fair value of our unconsolidated joint ventures' interest derivatives as of June 30, 2026 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
Notional
Value		Strike
Rate		Effective
Date		Expiration
Date		ClassificationFair
Value
Interest Rate Cap$500,000 5.250 %February 2026April 2027 Asset $77 
Interest Rate Cap292,500 4.000 %June 2026June 2027 Asset 559 
Interest Rate Swap537,500 4.065 %July 2024September 2028 Liability (1,662)
Interest Rate Swap268,750 4.058 %July 2024September 2028 Liability (786)
Interest Rate Swap268,750 4.039 %July 2024September 2028 Liability (677)
$(2,489)
Foreign Exchange Derivatives
We are also exposed to fluctuations in foreign exchange rates on financial instruments which are denominated in foreign currencies, primarily in euro. We use foreign exchange forward contracts to manage our exposure to changes in foreign exchange rates on certain euro-denominated assets and liabilities. Foreign exchange forward contracts involve fixing the U.S. dollar to euro exchange rate for delivery of a specified amount of foreign currency on a specified date. Our foreign exchange forward contracts are settled on a gross basis through the exchange of U.S. dollars and the contracted foreign currency on the settlement date.
The following table summarizes the notional value at inception and fair value of our consolidated foreign exchange derivatives as of June 30, 2026 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, foreign exchange rates or market risks (dollars in thousands).
Notional
Value		Effective
Date		Expiration
Date		Balance Sheet LocationFair
Value
Foreign Exchange Forward Contracts$39,878 March 2026July 2026 - June 2027Other liabilities$(451)
Foreign Exchange Forward Contracts30,492 March 2026October 2027 - June 2032Other liabilities(283)
$(734)
During the three and six months ended June 30, 2026, we recorded an unrealized loss of $0.6 million and $0.7 million based on changes in the fair value of foreign exchange derivatives not designated as hedges, which are included in "Purchase price and other fair value adjustments" in the consolidated statements of operations. During the three and six months ended June 30, 2025, we did not record any unrealized gains or losses on foreign exchange derivatives, as we did not have any outstanding during that period.