Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

The Company has interest rate swap agreements with an aggregate $900.0 million notional amount, which were designated as cash flow hedges. The Company also has forward starting interest rate swaps with a total notional amount of $400.0 million, which were designated as cash flow hedges to hedge the risk of changes in the interest-related cash outflows associated with the anticipated issuance of long-term debt.

The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges as well as their classification in the consolidated balance sheets as of March 31, 2020 and December 31, 2019 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	March 31, 2020			December 31, 2019
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	250
Interest rate swaps	Derivative, deferred rent and other liabilities	$	(104,530	)	$	(28,081	)

During the three months ended March 31, 2020 and 2019, the Company recorded unrealized losses of $78.6 million and $11.3 million, respectively, for changes in the fair value of the cash flow hedges in accumulated other comprehensive income.

The Company reclassified previous losses of $1.9 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively, from accumulated other comprehensive income into interest expense as a result of the hedged transactions impacting earnings.

During the next twelve months, the Company estimates that an additional $21.3 million will be reclassified from other comprehensive income as an increase to interest expense.

Tabular Disclosure of Offsetting Derivatives

The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of March 31, 2020 and December 31, 2019 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

	Offsetting of Derivative Assets and Liabilities
	Gross Amounts of Recognized Assets		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
March 31, 2020	$	—	$	(104,530	)	$	—	$	—	$	(104,530	)	$	—	$	—	$	(104,530	)
December 31, 2019	$	250	$	(28,081	)	$	—	$	250	$	(28,081	)	$	—	$	—	$	(27,831	)

Credit Risk Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision specifying that if the Company either defaults or is capable of being declared in default on any of its indebtedness, the Company could also be declared in default on its derivative obligations.

As of March 31, 2020, the Company has not posted any collateral related to these agreements and was not in breach of any provisions in these agreements. If the Company had breached any of these agreements, it could have been required to settle its obligations under the agreements at their aggregate termination value of $105.6 million at March 31, 2020.