Risk Management and Use of Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS [Text Block]

RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

Risk Management

In the course of its ongoing business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-bearing liabilities. Credit risk is primarily the risk of inability or unwillingness of tenants to make contractually required payments and of counterparties on derivatives contracts to fulfill their obligations. Market risk is the risk of declines in the value of Company properties due to changes in rental rates, interest rates, supply and demand of similar products and other market factors affecting the valuation of properties.

Risks and Uncertainties

Challenging economic conditions have reduced the volume of real estate transactions and created credit stresses on many businesses. Vacancy rates may increase through 2013 and possibly beyond as the current economic climate continues to negatively impact tenants. The current financial markets also have an adverse effect on the Company’s Real Estate Venture partners and contractual counter parties, including counter parties in derivative contracts.

The Company was in compliance with all financial covenants as of June 30, 2013. Management continuously monitors the Company’s compliance with and anticipated compliance with the covenants. Certain of the covenants restrict the Company’s ability to obtain alternative sources of capital. While the Company currently believes it will remain in compliance with its covenants, in the event of a continued slow-down or deterioration in the economy, the Company may not be able to remain in compliance with such covenants, in which case a default would result absent a lender waiver.

Derivative Financial Instruments

The following table summarizes the terms and fair values of the Company's derivative financial instruments as of June 30, 2013 and December 31, 2012. The notional amounts provide an indication of the extent of the Company's involvement in these instruments at that time, but do not represent exposure to credit, interest rate or market risks (amounts presented in thousands).

Hedge Product	Hedge Type	Designation		Notional Amount				Strike		Trade Date	Maturity Date	Fair value
				06/30/2013		12/31/2012						06/30/2013			12/31/2012
Assets:
Swap	Interest Rate	Cash Flow	(a)	25,774		25,774		3.300	%	December 22, 2011	January 30, 2021	154			(1,262		)
Swap	Interest Rate	Cash Flow	(a)	25,774		25,774		3.090	%	January 6, 2012	October 30, 2019	21			(1,129		)
				$	51,548	$	51,548					$	175		$	(2,391	)
Liabilities:
Swap	Interest Rate	Cash Flow	(a)	$	200,000	$	200,000	3.623	%	December 6-13, 2011	February 1, 2019	$	(1,506	)	$	(8,859	)
Swap	Interest Rate	Cash Flow	(a)	77,000		77,000		2.703	%	December 9-13, 2011	February 1, 2016	(798		)	(1,343		)
Swap	Interest Rate	Cash Flow	(a)	50,000		50,000		2.470	%	December 13, 2011	February 1, 2015	(328		)	(458		)
Swap	Interest Rate	Cash Flow	(a)	23,000		23,000		2.513	%	December 7-12, 2011	May 1, 2015	(174		)	(245		)
Swap	Interest Rate	Cash Flow	(a)	27,062		27,062		2.750	%	December 21, 2011	September 30, 2017	(283		)	(914		)
				$	377,062	$	377,062					$	(3,089	)	$	(11,819	)

(a) Hedging unsecured variable rate debt.

The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability. As of June 30, 2013, two interest rate swaps held an asset position and were included in other assets on the Company's consolidated balance sheets. The remaining swaps are included in other liabilities on the Company's consolidated balance sheets.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Concentration of Credit Risk

Concentrations of credit risk arise for the Company when multiple tenants of the Company are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that impact in a similar manner their ability to meet contractual obligations, including those to the Company. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. Management believes the current credit risk portfolio is reasonably well diversified and does not contain an unusual concentration of credit risk. No tenant accounted for 10% or more of the Company’s rents during the three and six-month periods ended June 30, 2013 and 2012. Conditions in the general economy and the global credit markets have had a significant adverse effect on numerous industries. The Company has tenants concentrated in various industries that may be experiencing adverse effects from the current economic conditions and the Company could be adversely affected if such tenants were to default under their leases.