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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
 
The Company enters into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and other liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

As of June 30, 2020, the Company had the following LIBOR interest rate caps ($ in thousands):
Origination Date
 
Expiration Date
 
Notional Amount
 
 Strike Rate
 
Premium Paid
7/16/2018
 
8/1/2020
 
$
50,000


2.50
%
 
$
319

12/11/2018
 
1/1/2021
 
50,000


2.75
%
 
210

5/15/2019
 
6/1/2022
 
100,000


2.50
%
 
288

1/10/2020
 
2/1/2022
 
50,000

(a) 
1.75
%
 
87

1/28/2020
 
2/1/2022
 
50,000

(a) 
1.75
%
 
62

2/28/2020
 
3/1/2022
 
100,000

(a) 
1.50
%
 
111

6/29/2020
 
7/1/2023
 
100,000

(a) 
0.50
%
 
232

Total
 
 
 
$
500,000

 
 
 
$
1,309


________________________________________
(a) Designated as a cash flow hedge.

As of June 30, 2020, the Company held the following floating-to-fixed interest rate swaps ($ in thousands):
Related Debt
 
Notional Amount
 
 
Index
 
Swap Fixed Rate
 
Debt effective rate
 
Effective Date
 
Expiration Date
Senior unsecured term loan
 
$
50,000

 
 
1-month LIBOR
 
2.78
%
 
4.33
%
 
5/1/2018
 
5/1/2023
John Hopkins Village
 
51,335

(a) 
 
1-month LIBOR
 
2.94
%
 
4.19
%
 
8/7/2018
 
8/7/2025
Senior unsecured term loan
 
10,500

(a) 
 
1-month LIBOR
 
3.02
%
 
4.57
%
 
10/12/2018
 
10/12/2023
249 Central Park Retail, South Retail, and Fountain Plaza Retail
 
34,114

(a) 
 
1-month LIBOR
 
2.25
%
 
3.85
%
 
4/1/2019
 
8/10/2023
Senior unsecured term loan
 
50,000

(a) 
 
1-month LIBOR
 
2.26
%
 
3.81
%
 
4/1/2019
 
10/26/2022
Thames Street Wharf

70,000

(a) 

1-month LIBOR

0.51
%

1.81
%

3/26/2020

6/26/2024
Senior unsecured term loan

25,000

(a) 

1-month LIBOR

0.50
%

2.05
%

4/1/2020

4/1/2024
Senior unsecured term loan

25,000

(a) 

1-month LIBOR

0.50
%

2.05
%

4/1/2020

4/1/2024
Senior unsecured term loan

25,000

(a) 

1-month LIBOR

0.55
%

2.10
%

4/1/2020

4/1/2024
Total
 
$
340,949

 
 
 
 
 
 
 
 
 
 
 
________________________________________
(a) Designated as a cash flow hedge.

For the interest rate swaps designated as cash flow hedges, realized losses are reclassified out of accumulated other comprehensive loss to interest expense in the Condensed Consolidated Statements of Comprehensive Income due to payments made to the swap counterparty. During the next 12 months, the Company anticipates reclassifying approximately $4.3 million of net hedging losses from accumulated other comprehensive loss into earnings to offset the variability of the hedged items during this period.

The Company’s derivatives were comprised of the following as of June 30, 2020 and December 31, 2019 (in thousands): 
 
 
June 30, 2020
 
December 31, 2019
 
 
(Unaudited)
 
 
 
 
 
 
 
 
Notional
Amount
 
Fair Value
 
Notional
Amount
 
Fair Value
 
 
 
 
Asset
 
Liability
 
 
 
Asset
 
Liability
Derivatives not designated as accounting hedges
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
50,000

 
$
—

 
$
(3,730
)
 
$
100,000

 
$
—

 
$
(1,992
)
Interest rate caps
 
200,000

 
21

 
—

 
250,000

 
25

 
—

Total derivatives not designated as accounting hedges
 
250,000

 
21

 
(3,730
)
 
350,000

 
25

 
(1,992
)
Derivatives designated as accounting hedges
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
290,948

 
—

 
(14,082
)
 
146,642

 
—

 
(5,728
)
Interest rate caps
 
300,000

 
216

 
—

 
—

 
—

 
—

Total derivatives
 
$
840,948

 
$
237

 
$
(17,812
)
 
$
496,642

 
$
25

 
$
(7,720
)


The changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2020 and 2019 were comprised of the following (in thousands): 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Interest rate swaps
 
$
(2,147
)
 
$
(4,549
)
 
$
(11,230
)
 
$
(6,201
)
Interest rate caps
 
(138
)
 
(843
)
 
(280
)
 
(1,657
)
Total change in fair value of interest rate derivatives
 
$
(2,285
)
 
$
(5,392
)
 
$
(11,510
)
 
$
(7,858
)
Comprehensive income statement presentation:
 
 
 
 
 
 
 
 
Change in fair value of interest rate derivatives
 
$
(6
)
 
$
(1,933
)
 
$
(1,742
)
 
$
(3,396
)
Unrealized cash flow hedge gains losses
 
(2,279
)
 
(3,459
)
 
(9,768
)
 
(4,462
)
Total change in fair value of interest rate derivatives
 
$
(2,285
)
 
$
(5,392
)
 
$
(11,510
)
 
$
(7,858
)