Note 11 - Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

11. 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 disclosed.  The valuation method used to estimate fair value for fixed-rate and variable-rate debt 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 values, 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, 2015				December 31, 2014
	Carrying Amounts		Estimated Fair Value		Carrying Amounts		Estimated Fair Value
Marketable securities (1)	$	12,189	$	12,189	$	90,235	$	90,035
Notes payable (2)	$	3,852,640	$	3,940,295	$	3,171,742	$	3,313,936
Mortgages payable (3)	$	1,645,946	$	1,680,714	$	1,424,228	$	1,481,138

(1) As of September 30, 2015 and December 31, 2014, the Company determined that $10.5 million and $87.7 million, respectively, of the Marketable securities estimated fair value were classified within Level 1 of the fair value hierarchy and the remaining $1.7 million and $2.3 million, respectively, were classified within Level 3 of the fair value hierarchy.

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

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

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. 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 tables below present the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

	Balance at September 30, 2015		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	10,533	$	10,533	$	-	$	-
Liabilities:
Interest rate swaps (1)	$	1,879	$	-	$	1,879	$	-

	Balance at December 31, 2014		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	87,659	$	87,659	$	-	$	-
Liabilities:
Interest rate swaps (1)	$	1,404	$	-	$	1,404	$	-

(1) Included in Other liabilities on the Company’s Condensed Consolidated Balance Sheets

Assets measured at fair value on a non-recurring basis at September 30, 2015 and December 31, 2014, are as follows (in thousands): 

	Balance at September 30, 2015		Level 1		Level 2		Level 3
Real estate	$	23,838	$	-	$	-	$	23,838

	Balance at December 31, 2014		Level 1		Level 2		Level 3
Real estate	$	80,270	$	-	$	-	$	80,270

During the nine months ended September 30, 2015, the Company recognized impairment charges of $28.0 million of which $0.1 million, before noncontrolling interests and income taxes, is included in discontinued operations. These impairment charges consist of (i) $21.9 million related to adjustments to property carrying values, (ii) $5.3 million related to certain investments in other real estate investments and (iii) $0.8 million related to marketable debt securities investment. During the nine months ended September 30, 2014, the Company recognized impairment charges of $107.0 million of which $78.6 million, before noncontrolling interests and income taxes, is included in discontinued operations. These impairment charges consist of (i) $102.2 million related to adjustments to property carrying values and (ii) $4.8 million related to a cost method investment.

The Company’s estimated fair values, as they relate to property carrying values and investments in other real estate investments were primarily based upon estimated sales prices from third party offers based on signed contracts and appraisals or letters of intent for which the Company does not have access to the unobservable inputs used 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. (See Footnote 2 for additional discussion regarding impairment charges).