In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including our Senior Unsecured Credit Facility (Note 10) and unhedged variable-rate non-recourse mortgage loans. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, Senior Unsecured Notes, other securities, and the shares or limited partnership units we hold in the Managed Programs, due to changes in interest rates or other market factors. We own investments in North America, Europe, and Japan and are subject to risks associated with fluctuating foreign currency exchange rates.

There have been no significant changes in our derivative financial instrument policies from what was disclosed in the 2020 Annual Report. At both June 30, 2021 and December 31, 2020, no cash collateral had been posted nor received for any of our derivative positions.


Derivatives Designated as Hedging Instruments	Balance Sheet Location	Derivative Assets Fair Value at				Derivative Liabilities Fair Value at
		June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020
Foreign currency collars	Other assets, net	$	8,129	$	3,489	$	—	$	—
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		(6,132)		(15,122)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(1,556)		(5,859)
		8,129		3,489		(7,688)		(20,981)
Derivatives Not Designated as Hedging Instruments
Stock warrants	Other assets, net	5,300		5,800		—		—
		5,300		5,800		—		—
Total derivatives		$	13,429	$	9,289	$	(7,688)	$	(20,981)


	Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Loss) (a)
	Three Months Ended June 30,				Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2021		2020		2021		2020
Foreign currency collars	$	(2,539)	$	(6,311)	$	13,628	$	11,505
Interest rate swaps	235		(122)		3,648		(2,359)
Interest rate caps	2		(1)		4		1
Foreign currency forward contracts	—		(2,943)		—		(5,272)
Derivatives in Net Investment Hedging Relationships (b)
Foreign currency collars	—		(20)		—		25
Total	$	(2,302)	$	(9,397)	$	17,280	$	3,900


		Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive Income (Loss)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Foreign currency collars	Non-operating income	$	614	$	1,917	$	(567)	$	2,901
Interest rate swaps and caps (c)	Interest expense	(198)		(468)		(524)		(706)
Foreign currency forward contracts	Non-operating income	—		2,917		—		5,716
Total		$	416	$	4,366	$	(1,091)	$	7,911

(a)Excludes net gains of $0.3 million and net losses of $0.1 million recognized on unconsolidated jointly owned investments for the three months ended June 30, 2021 and 2020, respectively, and net gains of $0.6 million and net losses of $0.5 million for the six months ended June 30, 2021 and 2020, respectively.

(c)Amount for the six months ended June 30, 2021 excludes other comprehensive income totaling $3.1 million that was removed from the consolidated financial statements (along with the related liability balances) upon the termination of interest rate swaps in connection with certain prepayments of non-recourse mortgage loans during the period (Note 10).

Amounts reported in Other comprehensive income (loss) related to interest rate derivative contracts will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive income (loss) related to foreign currency derivative contracts will be reclassified to Non-operating income when the hedged foreign currency contracts are settled. As of June 30, 2021, we estimate that an additional $0.7 million and $1.0 million will be reclassified as Interest expense and Non-operating income, respectively, during the next 12 months.


		Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Foreign currency collars	Non-operating income	$	(841)	$	(208)	$	159	$	431
Stock warrants	Other gains and (losses)	(500)		(1,400)		(500)		(1,300)
Foreign currency forward contracts	Non-operating income	—		(267)		—		(43)
Interest rate swaps	Interest expense	—		15		—		30
Derivatives in Cash Flow Hedging Relationships
Interest rate swaps	Interest expense	225		547		1,131		864
Total		$	(1,116)	$	(1,313)	$	790	$	(18)

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt financing on a fixed-rate basis. However, from time to time, we or our investment partners have obtained, and may in the future obtain, variable-rate, non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.


Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2021 (a)
Designated as Cash Flow Hedging Instruments
Interest rate swaps	2	47,813	EUR	$	(1,199)
Interest rate swaps	2	22,247	USD	(357)
Interest rate cap	1	10,920	EUR	—
Interest rate cap	1	6,394	GBP	—
				$	(1,556)

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling, the Danish krone, the Norwegian krone, and certain other currencies. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency collars. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency collars have maturities of 62 months or less.


Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2021
Designated as Cash Flow Hedging Instruments
Foreign currency collars	97	335,500	EUR	$	3,834
Foreign currency collars	99	58,300	GBP	(1,837)
				$	1,997

We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of June 30, 2021. At June 30, 2021, our total credit exposure and the maximum exposure to any single counterparty was $4.9 million and $1.6 million, respectively.

Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At June 30, 2021, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $7.7 million and $25.1 million at June 30, 2021 and December 31, 2020, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at June 30, 2021 or December 31, 2020, we could have been required to settle our obligations under these agreements at their aggregate termination value of $7.8 million and $25.6 million, respectively.

We have completed six offerings of euro-denominated senior notes, five with a principal amount of €500.0 million, which we refer to as the 2.0% Senior Notes due 2023, 2.25% Senior Notes due 2024, 2.250% Senior Notes due 2026, 2.125% Senior Notes due 2027, and 1.35% Senior Notes due 2028, and one with a principal amount of €525.0 million, which we refer to as the 0.950% Senior Notes due 2030. We redeemed the 2.0% Senior Notes due 2023 in March 2021 using the proceeds from the 0.950% Senior Notes due 2030 (Note 10). In addition, at June 30, 2021, the amount borrowed in Japanese yen, British pounds sterling, and euro outstanding under our Unsecured Revolving Credit Facility were ¥2.4 billion, £127.0 million, and €66.0 million, respectively (Note 10). Also, at June 30, 2021, the amounts borrowed in British pound sterling and euro outstanding under our Unsecured Term Loans (Note 10) were £150.0 million and €96.5 million, respectively. These borrowings are designated as, and are effective as, economic hedges of our net investments in foreign entities.

Exchange rate variations impact our financial results because the financial results of our foreign subsidiaries are translated to U.S. dollars each period, with the effect of exchange rate variations being recorded in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. As a result, changes in the value of our borrowings under our euro-denominated senior notes and changes in the value of our euro, Japanese yen, and British pound sterling borrowings under our Senior Unsecured Credit Facility, related to changes in the spot rates, will be reported in the same manner as foreign currency translation adjustments, which are recorded in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. Such (losses) gains related to non-derivative net investment hedges were $(44.5) million and $(62.9) million for the three months ended June 30, 2021 and 2020, respectively, and $98.0 million and $22.0 million for the six months ended June 30, 2021 and 2020, respectively.