Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Assets and Liabilities Recurring and Nonrecurring Measured at Fair Value

The following table presents certain of our assets that are measured at fair value at December 31, 2022 and 2021, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.


	As of December 31, 2022				As of December 31, 2021
Description	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Recurring Fair Value Measurements Assets:
Investment in AlerisLife (Level 1) (1)	$	5,880	$	5,880	$	31,540	$	31,540
Investment in unconsolidated joint venture (Level 3) (2)	$	104,697	$	104,697	$	215,127	$	215,127
Investment in unconsolidated joint venture (Level 3) (3)	$	50,780	$	50,780	$	—	$	—

(1)Our 10,691,658 shares of common stock of AlerisLife are included in investments in equity securities in our consolidated balance sheets, and are reported at fair value, which is based upon quoted market prices on Nasdaq (Level 1 inputs). During the years ended December 31, 2022 and 2021, we recorded unrealized losses of $25,660 and $42,232, respectively, which are included in gains and losses on equity securities, net in our consolidated statements of comprehensive income (loss), to adjust the carrying value of our investment in AlerisLife common shares to their fair value. See Notes 2 and 8 for further information about our investment in AlerisLife.

(2)The 10% equity interest we own in the Seaport JV is included in investments in unconsolidated joint ventures in our consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are a discount rate of 7.00%, an exit capitalization rate of 6.00%, a holding period of approximately 10 years and market rents. The assumptions made in the fair value analysis are based on the location, type and nature of the property, and current and anticipated market conditions, which are derived from appraisers. See Note 3 for further information regarding this joint venture.

(3)The 20% equity interest we own in the LSMD JV is included in investments in unconsolidated joint ventures in our consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are discount rates of between 6.00% and 7.50%, exit capitalization rates of between 4.50% and 6.50%, holding periods of approximately 10 years and market rents. The assumptions we made in the fair value analysis are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers. See Note 3 for further information regarding this joint venture.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The fair values of these financial instruments approximated their carrying values in our consolidated financial statements as of such dates, except as follows:


	As of December 31, 2022				As of December 31, 2021
Description	Carrying Amount (1)		Estimated Fair Value		Carrying Amount (1)		Estimated Fair Value
Senior unsecured notes, 4.750% coupon rate, due 2024	$	249,628	$	211,250	$	249,348	$	257,695
Senior unsecured notes, 9.750% coupon rate, due 2025	495,710		478,985		987,903		1,081,990
Senior unsecured notes, 4.750% coupon rate, due 2028	493,473		284,375		492,199		491,480
Senior unsecured notes, 4.375% coupon rate, due 2031	492,986		317,130		492,127		480,763
Senior unsecured notes, 5.625% coupon rate, due 2042	342,565		151,200		342,183		309,260
Senior unsecured notes, 6.250% coupon rate, due 2046	243,338		115,300		243,051		226,500
Secured debts (2)	30,177		28,275		69,713		71,963
	$	2,347,877	$	1,586,515	$	2,876,524	$	2,919,651

(1)Includes unamortized net debt issuance costs, premiums and discounts.

(2)We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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