3 unchanged sentences
The following is a summary of our annual exposure to a change in interest rates:
−Removed: September 30, 2022
+Added: March 31, 2023
December 31, 2022
1 unchanged sentence
Debt (contractual balances):
−Removed: Mortgages payable:
+Added: Mortgage loans:
Variable rate (1)
7 unchanged sentences
Fixed rate (2)
−Removed: (1) Includes variable rate mortgages with interest rate cap agreements.
−Removed: As of September 30, 2022, one-month LIBOR was 3.14% and one-month term SOFR was 3.04%, as applicable.
+Added: (1) Includes variable rate mortgage loans with interest rate cap agreements.
+Added: For consolidated mortgage loans with interest rate caps, the weighted average interest rate cap strike is 2.35%, and the weighted average maturity date of the interest rate caps is August 1, 2023.
+Added: The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans.
+Added: As of March 31, 2023, one-month LIBOR was 4.86% and one-month term SOFR was 4.80%.
+Added: The impact of these interest rate caps is reflected in our calculation of the annual effect of a 1% change in base rates.
(2) Includes variable rate mortgages with interest rates fixed by interest rate swap agreements.
−Removed: (3) As of September 30, 2022, one-month term SOFR was 3.04%.
+Added: (3) As of March 31, 2023, one-month term SOFR was 4.80%.
The interest rate for our revolving credit facility excludes a 0.15% facility fee.
−Removed: (4) As of September 30, 2022 and December 31, 2021, the outstanding balance was fixed by interest rate swap agreements.
−Removed: As of September 30, 2022, the interest rate swaps fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and 2.15% for the Tranche A-2 Term Loan.
+Added: (4) As of March 31, 2023 and December 31, 2022, the outstanding balance was fixed by interest rate swap agreements.
+Added: As of March 31, 2023, the interest rate swaps fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and 2.14% for the Tranche A-2 Term Loan.
+Added: The interest rate for our Tranche A-2 Term Loan excludes a 0.15% per annum commitment fee on the undrawn $50.0 million of commitments.
See Note 7 to the financial statements for additional information.
−Removed: The fair value of our mortgages payable is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources.
−Removed: The fair value of our revolving credit facility and unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms.
−Removed: As of September 30, 2022 and December 31, 2021, the estimated fair value of our consolidated debt was $2.3 billion and $2.5 billion.
−Removed: These estimates of
−Removed: fair value, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.
+Added: The fair value of our mortgage loans is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources.
+Added: The fair value of our unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms.
+Added: As of March 31, 2023 and December 31, 2022, the estimated fair value of our consolidated debt was $2.3 billion and $2.4 billion.
+Added: These estimates of fair value, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.
Hedging Activities
To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments.
−Removed: We do not enter into derivative financial instruments for speculative purposes.
Derivative Financial Instruments Designated as Effective Hedges
1 unchanged sentence
We assess the effectiveness of our hedges both at inception and on an ongoing basis.
−Removed: If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive income (loss)"
+Added: If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive income"
in our balance sheets and is subsequently reclassified into "Interest expense"
3 unchanged sentences
While management believes its judgments are reasonable, a change in a derivative's effectiveness as a hedge could materially affect expenses, net income (loss) and equity.
−Removed: As of September 30, 2022 and December 31, 2021, we had interest rate swap and cap agreements with an aggregate notional value of $1.4 billion and $862.7 million, which were designated as effective hedges.
−Removed: The fair value of our interest rate swaps and caps designated as effective hedges consisted of assets totaling $52.6 million and $393,000 as of September 30, 2022 and December 31, 2021, included in "Other assets, net"
−Removed: in our balance sheets, and liabilities totaling $18.4 million as of December 31, 2021, included in "Other liabilities, net"
−Removed: in our balance sheet.
+Added: As of March 31, 2023 and December 31, 2022, we had interest rate swap and cap agreements with an aggregate notional value of $1.2 billion and $1.4 billion, which were designated as effective hedges.
+Added: The fair value of our interest rate swaps and caps designated as effective hedges primarily consisted of assets totaling $36.4 million and $53.5 million as of March 31, 2023 and December 31, 2022, included in "Other assets, net"
+Added: in our balance sheets.
Derivative Financial Instruments Designated as Ineffective Hedges
−Removed: Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are cash flow hedges that are designated as ineffective hedges, and are carried at their estimated fair value on a recurring basis.
+Added: Certain derivative financial instruments, consisting of interest rate cap agreements, are cash flow hedges that are designated as ineffective hedges, and are carried at their estimated fair value on a recurring basis.
Realized and unrealized gains or losses are recorded in "Interest expense"
in our statements of operations.
−Removed: As of September 30, 2022 and December 31, 2021, we had various interest rate swap and cap agreements with an aggregate notional value of $711.8 million and $867.7 million, which were designated as ineffective hedges.
−Removed: The fair value of our interest rate swaps and caps designated as ineffective hedges consisted of assets totaling $9.4 million and $558,000 as of September 30, 2022 and December 31, 2021, included in "Other assets, net"
+Added: As of March 31, 2023 and December 31, 2022, we had various interest rate cap agreements with an aggregate notional value of $711.8 million, which were designated as ineffective hedges.
+Added: The fair value of our interest rate cap agreements designated as ineffective hedges consisted of assets totaling $5.3 million and $8.1 million as of March 31, 2023 and December 31, 2022, included in "Other assets, net"
in our balance sheets.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.