Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Inputs – quoted prices in active markets for identical assets or liabilities Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Inputs – unobservable inputs In September 2019 , the Company entered into a London Interbank Offered Rate (“LIBOR”) interest rate swap for a notional amount of $ 50.0 million. In January 2023, the Company amended the $ 50.0 million interest rate swap to transition from LIBOR to daily-simple SOFR. The Company applied the practical expedients available for hedging relationships under the reference rate reform guidance, which preserves the presentation of the derivative consistent with past presentation and does not result in dedesignation of the hedging relationship. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 1.17% for the remainder of the five-year term. In January 2023 In February 2023 for the three-year term. In August 2023 In August 2023 In May 2024, the Company entered into an interest rate swap at Central Fairwinds for an initial notional amount of $ 15.6 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.43% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan. The fair value of the interest rate swaps have been classified as Level 2 fair value measurements. The interest rate swaps have been designated and qualify as cash flow hedges and have been recognized on the condensed consolidated balance sheets at fair value, presented within other assets and other liabilities. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. The following table summarizes the Company’s derivative financial instruments as of June 30, 2024 and December 31, 2023 (in thousands):
For the six months ended June 30, 2024, approximately $2.2 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. For the six months ended June 30, 2023, approximately $1.3 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. Cash, Cash Equivalents, Restricted Cash, Rents Receivable, Accounts Payable and Accrued Liabilities The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments. Fair Value of Financial Instruments Not Carried at Fair Value With the exception |