Fair value of financial instruments (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value, Liabilities Measured on Recurring Basis

The following tables present our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 ($ in thousands):


Financial Assets	September 30, 2022		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis
Interest rate swaps	$	4,979	$	—	$	4,979	$	—


Financial Liabilities	December 31, 2021		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis
Interest rate swap	$	22,543	$	—	$	22,543	$	—

Schedule of Financial Liabilities Not Measured at Fair Value

The following tables present our fair value hierarchy for our financial liabilities not measured at fair value as of September 30, 2022 and December 31, 2021 ($ in thousands):


	Carrying Value		Fair Value
	As of September 30, 2022		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	907,351	$	—	$	—	$	876,294
Term A1 Loan	34,422		—		—		35,400
Term A2 Loan	30,488		—		—		31,355
Term A3 Loan	26,857		—		—		26,424
Property Loan	104,803		—		—		110,829
Total liabilities	$	1,103,921	$	—	$	—	$	1,080,302


	Carrying Value		Fair Value
	As of December 31, 2021		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	938,788	$	—	$	—	$	924,917
Term A1 Loan	34,151		—		—		35,598
Term A2 Loan	30,248		—		—		31,530
Term A3 Loan	26,640		—		—		27,006
Property Loan	103,434		—		—		111,593
Total liabilities	$	1,133,261	$	—	$	—	$	1,130,644

Summary of Valuation Techniques

The following table summarizes the valuation techniques used to estimate the fair value of our financial instruments measured at fair value on a recurring basis and our financial instruments not measured at fair value:


						Valuation Technique
Financial instruments recorded at fair value
Interest rate swaps						The fair value of the interest rate swaps is estimated based on the expected future cash flows by incorporating the notional amount of the swaps, the contractual period to maturity, and observable market-based inputs, including interest rate curves. The fair value also incorporates credit valuation adjustments to appropriately reflect nonperformance risk. The fair value of our interest rate swaps is largely dependent on forecasted LIBOR as of the measurement date. If, in subsequent periods, forecasted LIBOR exceeds 2.85% we will recognize a gain and future cash inflows. Conversely, if forecasted LIBOR falls below 2.85% in subsequent periods we will recognize a loss and future cash outflows.
Financial instruments not recorded at fair value
Term Loans and Property Loan						The fair value of our Term Loans and Property Loan are estimated using cash flow projections over the remaining contractual period by applying market forward rates and discounting back at the appropriate discount rate.
Revolving Credit Facility						The valuation technique of our Revolving Credit Facility is consistent with our Term Loans. The fair value of the Revolving Credit Facility generally approximates its carrying value as the expected term is significantly shorter in duration.