Hedge Agreements
Sep. 30, 2026
We have fixed-to-fixed cross-currency swap agreements designated as net investment hedges to mitigate the impact of
fluctuations in the USD–CAD exchange rate on our real estate investments in Canada. Under the terms of these agreements, USD
fixed interest amounts are payable to us and CAD fixed interest amounts are payable to the counterparty.
On April 30, 2026, our cross-currency swap agreements with an aggregate notional amount of CAD $340.0 million matured.
No amounts were reclassified from accumulated other comprehensive income to earnings because the related net investment had not
been sold or substantially liquidated.
During the three months ended June 30, 2026, we entered into new fixed-to-fixed cross-currency swap agreements
designated as net investment hedges with an aggregate notional amount of CAD $270.0 million. During the three months ended
September 30, 2026, we terminated these agreements and entered into new fixed-to-fixed cross-currency swap agreements with the
same aggregate CAD notional amount, designated as net investment hedges, which were deemed effective on the commencement
date. These agreements mature on January 31, 2028.
As of September 30, 2026, our outstanding cross-currency swap agreements had an aggregate notional amount of CAD
$270.0 million, or approximately USD $194.1 million, and were highly effective.
Unrealized gains or losses on these agreements are recognized in accumulated other comprehensive income and will be
reclassified into net income upon complete or substantially complete liquidation of our investment in Canada. Refer to “Hedge
accounting” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional
information.
The tables below summarize the fair value of our cross-currency swap agreements designated as net investment hedges and
the effect on our consolidated financial statements. Amounts are presented in USD (in thousands).
Fair value of cross-currency swap agreements designated as net investment hedges
Balance Sheet Location | September 30, 2026 | December 31, 2025 | ||
$3,634 | $— | |||
$— | $928 |
Effect on consolidated other comprehensive income
Effect Recognized (in thousands) | Location in Consolidated Statement of Comprehensive Income | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||||
Total unrealized (losses) gains recognized in other comprehensive income | Unrealized (losses) gains on foreign currency translation, net | $(26) | $2,970 | $8,040 | $2,970 | |||||
Effect on consolidated statements of operations
Effect Recognized (in thousands) | Location in Consolidated Statement of Operations | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||||
Total gain recognized in net income(1) | Other income | $641 | $748 | $4,289 | $748 | |||||
(1)Represents net interest settlements and interest rate forward points excluded from assessment of hedge effectiveness. Refer to “Hedge accounting” in Note 2 –
“Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information.