Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2025 and December 31, 2024:


(In thousands)	Balance Sheet Location	September 30, 2025		December 31, 2024
Derivatives designated as hedging instruments:
Interest rate “pay-fixed” swaps	Derivative assets, at fair value	$	7,572	$	16,652

Derivatives not designated as hedging instruments:
Interest rate caps	Derivative assets, at fair value	$	843	$	2,554

Schedule of Derivatives Included in AOCI

The table below details the location in the financial statements of the gain (loss) recognized on interest rate derivatives designated as cash flow hedges for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives	$	427	$	(6,588)	$	(714)	$	2,732
Amount of gain reclassified from accumulated other comprehensive income into income as interest expense	$	2,308	$	3,579	$	8,366	$	11,895
Total amount of interest expense presented in the consolidated statements of operations and comprehensive loss	$	(15,060)	$	(18,007)	$	(45,425)	$	(52,142)

Schedule of Derivative Instruments

The Company had the following outstanding interest rate derivatives with current effective notional amounts that were not designated as hedges in qualified hedging relationships as of September 30, 2025 and December 31, 2024:

September 30, 2025

December 31, 2024

Interest Rate Derivatives

Number of Instruments

Notional Amount (1)

Number of Instruments

Notional Amount (1)

(In thousands)

Interest rate caps (2)

342,780

369,218

__________

(1)Notional amount represents the currently active interest rate cap contracts.

(2)All of the Company’s interest rate cap agreements limited one-month SOFR to 3.50% with terms through November 2026. The actual one-month SOFR rates during the three months ended September 30, 2025 exceeded the strike price rate of 3.50% and the Company received payments under these agreements. Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

Schedule of Offsetting Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives (both designated and non-designated) as of September 30, 2025 and December 31, 2024. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets.


									Gross Amounts Not Offset in the Consolidated Balance Sheet
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts of Recognized (Liabilities)		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2025	$	8,415	$	—	$	—	$	8,415	$	—	$	—	$	8,415
December 31, 2024	$	19,206	$	—	$	—	$	19,206	$	—	$	—	$	19,206

National Healthcare Properties, Inc. 10-Q