Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on a recurring basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):

	Level 1		Level 2			Level 3		Balance as of September 30, 2019
Assets:
Investment in Cole REITs	$	—	$	—		$	7,552	$	7,552
Liabilities:
Derivative liabilities	$	—	$	(47,964	)	$	—	$	(47,964	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2018
Assets:
Derivative assets	$	—	$	544		$	—	$	544
Investment in Cole REITs	—		—			7,844		7,844
Total assets	$	—	$	544		$	7,844	$	8,388

Reconciliations of the changes in liabilities with Level 3 inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2019 (in thousands):

	Investment in Cole REITs
Beginning balance, January 1, 2019	$	7,844
Unrealized loss included in other income, net	(292		)
Ending Balance, September 30, 2019	$	7,552

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2018 (in thousands):

	CMBS			Investment in Cole REITs
Beginning balance, January 1, 2018	$	40,974		$	3,264
Total gains and losses
Unrealized loss included in other comprehensive income, net	(71		)	—
Realized loss included in other income, net	(34		)	—
Unrealized gain included in other income, net	—			5,102
Purchases, issuance, settlements
Return of principal received	(4,864		)	—
Amortization included in net income, net	157			—
Sale of investments	(9,880		)	(522		)
Transfers out of Level 3 into Level 1 (1)	(12,756		)	—
Ending Balance, September 30, 2018	$	13,526		$	7,844

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(1)

As of December 31, 2017, the Company’s commercial mortgage backed securities (“CMBS”) were carried at fair value and valued using Level 3 inputs. Subsequent to September 30, 2018, the Company sold two of its CMBS. This resulted in transfers out of Level 3 into Level 1, as the Company used trade confirmations

Reconciliations of the changes in assets with Level 3 inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2019 (in thousands):

	Investment in Cole REITs
Beginning balance, January 1, 2019	$	7,844
Unrealized loss included in other income, net	(292		)
Ending Balance, September 30, 2019	$	7,552

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2018 (in thousands):

	CMBS			Investment in Cole REITs
Beginning balance, January 1, 2018	$	40,974		$	3,264
Total gains and losses
Unrealized loss included in other comprehensive income, net	(71		)	—
Realized loss included in other income, net	(34		)	—
Unrealized gain included in other income, net	—			5,102
Purchases, issuance, settlements
Return of principal received	(4,864		)	—
Amortization included in net income, net	157			—
Sale of investments	(9,880		)	(522		)
Transfers out of Level 3 into Level 1 (1)	(12,756		)	—
Ending Balance, September 30, 2018	$	13,526		$	7,844

___________________________________

(1)

As of December 31, 2017, the Company’s commercial mortgage backed securities (“CMBS”) were carried at fair value and valued using Level 3 inputs. Subsequent to September 30, 2018, the Company sold two of its CMBS. This resulted in transfers out of Level 3 into Level 1, as the Company used trade confirmations to determine the fair value as of September 30, 2018.

Fair value, by balance sheet grouping

The fair values of the Company’s financial instruments are reported below (dollar amounts in thousands):

	Level	Carrying Amount at September 30, 2019		Fair Value at September 30, 2019		Carrying Amount at December 31, 2018		Fair Value at December 31, 2018
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	1,726,620	$	1,787,529	$	1,933,209	$	1,961,496
Corporate bonds, net	2	2,646,348		2,848,669		3,395,885		3,368,928
Convertible debt, net	2	400,053		409,419		398,591		396,905
Credit facility	2	900,000		900,000		403,000		403,000
Total liabilities		$	5,673,021	$	5,945,617	$	6,130,685	$	6,130,329

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(1)

Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.