Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2012

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Note 8.  Fair Value of Assets and Liabilities

The following table presents certain of our assets and liabilities that are measured at fair value on a recurring and non recurring basis at September 30, 2012 categorized by the level of inputs used in the valuation of each asset or liability.

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
Assets held for sale(1)	$	850	$	—	$	850
Long-lived assets held and used(2)	$	1,975	$	—	$	1,975
Investments in available for sale securities(3)	$	25,281	$	25,281	$	—
Unsecured senior notes(4)	$	1,174,322	$	1,174,322	$	—

(1)Assets held for sale consist of one of our properties that we expect to sell that is reported at fair value.  We used offers to purchase the property made by third parties or comparable sales transactions (Level 2 inputs) to determine the fair value of this property.  We have previously recorded cumulative impairments of approximately $5,738 to this property in order to reduce its book value to fair value.

(2)Long-lived assets held and used consist of one of our properties.  We used broker information and comparable sales transactions (Level 2 inputs) to determine the fair value of this property and recognized an impairment of assets charge of $3,071 during the nine months ended September 30, 2012 to reduce its carrying value to the amount stated.

(3)Our investments in available for sale securities include our 250,000 common shares of CWH and 4,235,000 common shares of Five Star. The fair values of these shares are based on quoted prices at September 30, 2012 in active markets (Level 1 inputs).

(4)We estimate the fair values of our unsecured senior notes using an average of the bid and ask price of our then outstanding four issuances of senior notes (Level 1 inputs) on or about September 30, 2012.  The fair values of these senior note obligations exceed their book values of $1,091,732 by $82,590 because these notes were trading at a premium to their face amounts.

In addition to the assets and liabilities described in the above table, our additional financial instruments include rents receivable, cash and cash equivalents, restricted cash, secured and unsecured debt and other liabilities. The fair values of these additional financial instruments approximate their carrying values at September 30, 2012 based upon their liquidity, short term maturity, variable rate pricing or our estimate of fair value using discounted cash flow analyses and prevailing interest rates.