Note 14 - Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Text Block]

14. Fair Value Measurements

All financial instruments of the Company are reflected in the accompanying Condensed Consolidated Balance Sheets at amounts which, in management’s estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are reflected.  The valuation method used to estimate fair value for fixed-rate and variable-rate debt and noncontrolling interests relating to mandatorily redeemable noncontrolling interests associated with finite-lived subsidiaries of the Company is based on discounted cash flow analyses, with assumptions that include credit spreads, market yield curves, trading activity, loan amounts and debt maturities.  The fair values for marketable securities are based on published, securities dealers’ estimated market values or comparable market sales.  Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The following are financial instruments for which the Company’s estimate of fair value differs from the carrying amounts (in thousands):

	September 30, 2012				December 31, 2011
	Carrying Amounts			Estimated Fair Value	Carrying Amounts		Estimated Fair Value
Marketable Securities (1)	$	35,811	$	36,117	$	33,540	$	33,908
Notes Payable (2)	$	3,159,943	$	3,387,913	$	2,983,886	$	3,136,728
Mortgages Payable (3)	$	1,015,313	$	1,082,627	$	1,085,371	$	1,166,116
Construction Loans Payable (3)	$	42,935	$	48,559	$	45,128	$	49,345
Mandatorily Redeemable Noncontrolling Interests (termination dates ranging from 2019 – 2027) (4)	$	-	$	-	$	2,654	$	5,044

(1)  As of September 30, 2012, $32.7 million of these assets’ estimated fair value were classified within Level 1 of the fair value hierarchy and the remaining $3.4 million were classified within Level 3 of the fair value hierarchy.

(2)  The Company determined that its valuation of these Notes payable was classified within Level 2 of the fair value hierarchy. 

(3)  The Company determined that its valuation of these liabilities was classified within Level 3 of the fair value hierarchy. 

(4)  The Company sold its investment in the consolidated joint ventures that included mandatorily redeemable noncontrolling interests during the nine months ended September 30, 2012.

The Company has certain financial instruments that must be measured under the FASB’s Fair Value Measurements and Disclosures guidance, including available for sale securities and derivatives. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of  September 30, 2012 and December 31, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

	Balance at September 30, 2012		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	32,725	$	32,725	$	-	$	-

	Balance at December 31, 2011		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	30,462	$	30,462	$	-	$	-
Liabilities:
Interest rate swaps	$	222	$	-	$	222	$	-

Assets measured at fair value on a non-recurring basis at September 30, 2012 and December 31, 2011 are as follows (in thousands):

	Balance at September 30, 2012		Level 1		Level 2		Level 3
Real estate	$	16,141	$	-	$	-	$	16,141

	Balance at December 31, 2011		Level 1		Level 2		Level 3
Real Estate	$	5,289	$	-	$	-	$	5,289
Other real estate investments (1)	$	9,041	$	-	$	9,041	$	-

(1)   Amount represents an investment in a mutual fund for which fair value was determined based on net asset value.

During the nine months ended September 30, 2012, the Company recognized impairment charges of $37.6 million ($15.2 million of which is included in discontinued operations) relating to adjustments to property carrying values. During the nine months ended September 30, 2011, the Company recognized impairment charges of $16.7 million ($8.9 million of which is included in discontinued operations) relating to adjustments to property carrying values, investment in other real estate investments and investment in real estate joint ventures. The Company’s estimated fair values relating to these impairment assessments were primarily based upon estimated sales prices from third party offers and comparable sales information. The Company does not have access to the unobservable inputs used by these third parties to determine these estimated fair values.  Based on these inputs the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.