Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value of Assets and Liabilities

Schedule of assets and liabilities measured at fair value

				Fair Value at Reporting Date Using
				Quoted Prices in					Significant
				Active Markets for		Significant Other			Unobservable
				Identical Assets		Observable Inputs			Inputs
Description	Total			(Level 1)		(Level 2)			(Level 3)
Recurring Fair Value Measurements:
Effective portion of interest rate swap contracts(1)	$	(12,613	)	$	—	$	(12,613	)	$	—
Non-Recurring Fair Value Measurements:
Properties held for sale(2)	$	494,713		$	—	$	—		$	494,713

(1) The fair value of our interest rate swap contracts is determined using the net discounted cash flows of the expected cash flows of each derivative based on the market based interest rate curve (level 2 inputs) and adjusted for our credit spread and the actual and estimated credit spreads of the counterparties (level 3 inputs).  Although we have determined that the majority of the inputs used to value our derivatives fall within level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and the counterparties.  As of September 30, 2013, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.  As a result, we have determined that our derivative valuations in their entirety are classified as level 2 inputs in the fair value hierarchy.

(2) As of September 30, 2013, we recorded a net loss on asset impairment totaling $223,192 for three of our CBD properties (four buildings) and 43 of our suburban properties (97 buildings) to reduce the aggregate carrying value of these properties from $717,905 to their estimated fair value less costs to sell of $494,713.  All of these properties were classified as held for sale as of September 30, 2013.  We used broker information, including recent purchase offers and comparable sales (level 3 inputs), in determining the fair value of these properties.  The valuation techniques and significant unobservable inputs used for our level 3 fair value measurements at September 30, 2013 were as follows:

Schedule of valuation techniques and significant unobservable inputs used for level 3 fair value measurements

Description	Fair Value at September 30, 2013		Valuation Techniques	Unobservable Inputs	Range
Properties held for sale for which we recognized impairment losses	$	36,373	Purchase Offers	N/A	N/A
Properties held for sale for which we recognized impairment losses	$	458,340	Discounted cash flows and comparable sales	Discount rate Exit capitalization rate Market rent growth rate	9% - 12% 8% - 10% 3%

Schedule of effects of interest rate derivatives on our consolidated statements of operations and consolidated statements of comprehensive (loss) income

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Balance at beginning of period	$	(12,791	)	$	(18,237	)	$	(16,624	)	$	(15,796	)
Amount of income (loss) recognized in cumulative other comprehensive (loss) income	(1,087		)	(782		)	274			(5,673		)
Amount of loss reclassified from cumulative other comprehensive (loss) income into interest expense	1,265			1,236			3,737			3,686
Unrealized gain (loss) on derivative instruments	178			454			4,011			(1,987		)
Balance at end of period	$	(12,613	)	$	(17,783	)	$	(12,613	)	$	(17,783	)

Fair value and carrying value of financial instruments

	September 30, 2013				December 31, 2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Senior notes and mortgage notes payable	$	2,206,157	$	2,314,308	$	2,932,951	$	3,181,522