THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2018 and 2017
Luke’s Preservation, have entered into swap contracts. Under the Asmara contract, Asmara paid a fixed interest rate of 1.6495% per annum and received a floating interest rate based on the USD- SIFMA Municipal Swap Index (0.72% as of December 31, 2017). During 2017, the swap matured and the properties were sold to an unrelated third party. Under Foxwood Preservation’s contract, Foxwood Preservation pays a fixed interest rate of 3.81% per annum and receives a floating rate based on the USD-SIFMA Municipal Swap Index (1.71% and 1.22% at December 31, 2018 and 2017, respectively). This swap matures on December 1, 2025. Under the St. Luke’s Preservation contract, St. Luke’s Preservation pays a fixed interest rate of 3.68% per annum and receives a floating interest rate based on the USD-SIFMA Municipal Swap Index (1.71% and 1.22% at December 31, 2018 and 2017, respectively). This swap contract matures on December 1, 2026. The fair value of the interest rate swap liability represents an estimate of the amount that the affiliated entities would have to pay the other party to the swap contracts to cancel the swaps as of December 31, 2018 and 2017 and is based on current interest rates for similar contracts. The recorded amount of the liability or asset representing the fair value of the swap contracts will vary from year-to-year with fluctuations in the interest rates and the swaps move closer to their maturity dates. The change in the fair value of the interest rate swaps is recorded in interest expense on the consolidated statement of activities and statement of functional expenses for the years ended December 31, 2018 and 2017. At December 31, 2018 and 2017, the interest rate swap contracts represent a liability of $1,734,349 and $2,100,592, which is included in other liabilities on the consolidated statements of financial position. NOTE 11 - LEASES NHPF leased office space under a standard commercial operating lease extending through September 30, 2018 for its main office in New York, NY. In January, 2017 the lease agreement was amended to reflect new office space and the lease was extended through March, 2027. NHPF leases office space under a standard commercial operating leases extending through December 31, 2026 for its Washington, DC office. Rent expense for the years ended December 31, 2018 and 2017 totaled $945,065 and $961,885, respectively, which is net of all sublease payments and rent concessions.
Future minimum lease commitments at December 31, 2018, are as follows:
2019 2020 2021 2022 2023
$
958,726 981,388
1,004,587 1,060,442 1,096,178 3,611,346
Thereafter
$
8,712,667
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