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Derivative Instruments and Hedging Activities (Tables)
 12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of fair value of the derivative financial instruments
The following table summarizes certain terms of the Company’s derivative contracts:
FixedFair Value Asset (Liability)
NotionalInterestEffectiveMaturityDecember 31,December 31,
thousandsBalance Sheet LocationAmountRate (a)DateDate20212020
Derivative instruments not designated as hedging instruments: (b)
Interest rate cap(c)Prepaid expenses and other assets, net285,0002.00%3/12/20219/15/2023$300 $— 
Interest rate cap(c)Prepaid expenses and other assets, net83,2002.00%3/12/20219/15/202387 — 
Interest rate capPrepaid expenses and other assets, net75,0005.00%8/31/202010/17/2022— — 
Interest rate cap(d)Prepaid expenses and other assets, net75,0002.50%10/12/20219/29/2025485 — 
Interest rate cap(e)Prepaid expenses and other assets, net59,5002.50%10/12/20219/29/2025385 — 
Total fair value derivative assets$1,257 $— 
Derivative instruments designated as hedging instruments:
Interest rate swap(f)Accounts payable and accrued expenses615,0002.96%9/21/20189/18/2023$(23,477)$(46,613)
Interest rate swap(g)Accounts payable and accrued expenses35,4854.89%11/1/20191/1/2032(2,975)(5,307)
Total fair value derivative liabilities(26,452)(51,920)
Total fair value derivatives, net$(25,195)$(51,920)
(a)These rates represent the strike rate on HHC’s interest swaps and caps.
(b)Interest expense included in the Consolidated Statements of Operations for the year ended December 31, 2021 and 2020, related to these contracts was not material.
(c)Concurrent with the closing of the $368.2 million construction loan for Victoria Place in 2021, the Company entered into two new LIBOR interest rate caps.
(d)Concurrent with the closing of the $75.0 million construction loan for 1700 Pavilion in 2021, the Company entered into this interest rate cap.
(e)Concurrent with the closing of the $59.5 million construction loan for Tanager Echo in 2021, the Company entered into this interest rate cap.
(f)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.
(g)Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails in 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 Consolidated Statements of Operations
The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the years ended December 31:
Derivatives in Cash Flow Hedging RelationshipsAmount of Gain (Loss) Recognized in AOCI on Derivatives
thousands202120202019
Interest rate derivatives$5,300 $(34,906)$(19,245)
 
Location of Gain (Loss) Reclassified from AOCI into OperationsAmount of Gain (Loss) Reclassified from AOCI into Operations
thousands202120202019
Interest expense$(12,660)$(11,836)$1,939 
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
thousands202120202019
Interest expense$130,036 $132,257 $105,374