Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Floating to Fixed Interest Rate Swaps

As of June 30, 2025, 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
Harbor Point Parcel 3 senior construction loan	$	90,000	(a)	1-month SOFR	2.75	%	4.82	%	10/2/2023	10/1/2025
Floating rate pool of loans	330,000		(b)	1-month SOFR	2.75	%	4.35	%	10/1/2023	10/1/2025
Allied Loan and floating rate pool of loans	100,000		(c)	1-month SOFR	2.75	%	5.16	%	11/1/2023	11/1/2025
Floating rate pool of loans	300,000		(d)	1-month SOFR	2.75	%	4.35	%	12/1/2023	12/1/2025

Thames Street Wharf loan	64,532		(e)	Daily SOFR	0.93	%	2.33	%	9/30/2021	9/30/2026
Floating rate pool of loans	150,000		(f)	1-month SOFR	2.50	%	4.10	%	1/2/2025	1/1/2027
M&T unsecured term loan	100,000		(e)	1-month SOFR	3.50	%	5.05	%	12/6/2022	12/6/2027
Liberty Retail & Apartments loan	21,000		(g)	1-month SOFR	3.43	%	4.93	%	12/13/2022	1/21/2028
Senior unsecured term loan	79,000		(g)	1-month SOFR	3.43	%	4.98	%	12/13/2022	1/21/2028
Total	$	1,234,532

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(a) This interest rate swap agreement reduces the Company's interest rate exposure on the $174.4 million senior construction loan secured by the Company's Harbor Point Parcel 3 equity method investment as described in Note 6. As such, the loan is not reflected on the Company's consolidated balance sheets. The Company also paid $3.6 million to reduce the swap fixed rate on September 8, 2023.

(b) The Company paid $13.3 million to reduce the swap fixed rate on September 8, 2023.

(d) The Company paid $10.5 million to reduce the swap fixed rate on November 16, 2023.

(e) Designated as a cash flow hedge.

(f) On January 3, 2025, the Company entered into an interest rate swap agreement with a notional of $150.0 million and a SOFR rate of 2.50%. The interest rate swap will expire on January 1, 2027. The Company paid a $4.6 million premium for this transaction.

(g) The Company novated an existing 3.43% fixed rate swap with a $100.0 million notional and assigned (A) $11.1 million notional to the loan secured by Market at Mill Creek, effective April 17, 2024 and (B) $21.0 million to the loan secured by Liberty Retail & Apartments, effective February 1, 2024. Once the Market at Mill Creek loan was repaid, the $67.9 million swap on the senior unsecured loan increased to $79.0 million.

Schedule of Derivatives

The Company’s derivatives were comprised of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025						December 31, 2024
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Asset		Liability				Asset		Liability
Derivatives not designated as accounting hedges
Interest rate swaps	$	1,070,000	$	6,364	$	(109)	$	1,020,000	$	11,149	$	—

Derivatives designated as accounting hedges
Interest rate swaps	164,532		2,138		(233)		166,057		4,712		—

Total derivatives	$	1,234,532	$	8,502	$	(342)	$	1,186,057	$	15,861	$	—

Schedule of Changes in Fair Value of Derivatives

The unrealized changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2025 and 2024 were comprised of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Interest rate swaps	$	(4,211)	$	(975)	$	(10,888)	$	9,074
Interest rate caps	—		8		—		24
Total unrealized change in fair value of interest rate derivatives	$	(4,211)	$	(967)	$	(10,888)	$	9,098
Comprehensive (loss) income statement presentation:
Change in fair value of derivatives and other	$	(3,845)	$	(1,951)	$	(9,472)	$	4,560
Unrealized cash flow hedge gains	(366)		984		(1,416)		4,538
Total unrealized change in fair value of interest rate derivatives	$	(4,211)	$	(967)	$	(10,888)	$	9,098

Armada Hoffler Properties, Inc. 10-Q