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Derivative Instruments and Hedging Activities (Tables)
 9 Months Ended
Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of the notional and fair value of derivative financial instruments
The following table summarizes certain terms of the Company’s derivative contracts:
      Fair Value Asset (Liability)
thousands Balance Sheet LocationNotional AmountFixed Interest Rate (a)Effective DateMaturity DateSeptember 30, 2021December 31, 2020
Derivative instruments not designated as hedging instruments:
Interest rate cap(b)Prepaid expenses and other assets, net$285,000 2.00 %3/12/20219/15/2023$88 $— 
Interest rate cap(b)Prepaid expenses and other assets, net83,200 2.00 %3/12/20219/15/202326 — 
Interest rate cap(c)Prepaid expenses and other assets, net75,000 5.00 %8/31/202010/17/2022— — 
Total fair value derivative assets$114 $— 
Derivative instruments designated as hedging instruments:
Interest rate swap(d)Accounts payable and accrued expenses$615,000 2.96 %9/21/20189/18/2023$(32,110)$(46,613)
Interest rate swap(e)Accounts payable and accrued expenses35,485 4.89 %11/1/20191/1/2032(3,257)(5,307)
Total fair value derivative liabilities(35,367)(51,920)
Total fair value derivatives, net $(35,253)$(51,920)
(a)These rates represent the strike rate on HHC’s interest swaps and caps.
(b)In March 2021, the Company entered into two new LIBOR interest rate caps, which are not designated as hedging instruments. Interest expense included in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021, related to these contracts was not material.
(c)In the third quarter of 2020, the Company executed an agreement to extend the maturing position of this LIBOR cap. Interest expense included in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021, and the year ended December 31, 2020, related to this contract was not material.
(d)Concurrent with the funding of the $615.0 million Term Loan in September 2018, the Company entered into this interest rate swap which is designated as a cash flow hedge. In conjunction with the sale of The Westin at The Woodlands and Embassy Suites at Hughes Landing in September 2021, $181.8 million was repaid on the Term Loan. This swap covers the outstanding balance on the Term Loan in addition to other LIBOR-based debt held by the Company.
(e)Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails in June 2019, the Company entered into this interest rate swap, which is designated as a cash flow hedge.
Summary of effect of derivative financial instruments on the condensed consolidated statements of operations
The tables below present the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021, and 2020:
Derivatives in Cash Flow Hedging RelationshipsAmount of Gain (Loss) Recognized in AOCI on Derivatives
Three Months Ended September 30,Nine Months Ended September 30,
thousands2021202020212020
Interest rate derivatives$(201)$1,037 $2,046 $(35,211)
 
Location of Gain (Loss) Reclassified from AOCI into OperationsAmount of Gain (Loss) Reclassified from AOCI into Operations
Three Months Ended September 30,Nine Months Ended September 30,
thousands2021202020212020
Interest expense$(3,172)$(4,309)$(9,186)$(8,818)

Interest Expense Presented in Results of OperationsTotal Interest Expense Presented in the Results of Operations in which the Effects of Cash Flow Hedges are Recorded
Three Months Ended September 30,Nine Months Ended September 30,
thousands2021202020212020
Interest expense$31,556 $31,872 $97,205 $98,717