Note 14 - Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

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 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 estimated fair value differs from the carrying value (in thousands):

	September 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes payable, net (1) (3)	$	6,909,382	$	5,869,420	$	7,027,050	$	7,330,723
Mortgages payable, net (2) (3)	$	300,739	$	264,082	$	448,652	$	449,758

(1) The Company determined that the valuation of its senior unsecured notes were classified within Level 2 of the fair value hierarchy and its Credit Facility was classified within Level 3 of the fair value hierarchy. The estimated fair value amounts classified as Level 2, as of September 30, 2022 and December 31, 2021, were $5.7 billion and $7.3 billion, respectively. The estimated fair value amounts classified as Level 3, as of September 30, 2022, was $126.7 million.

(2)	The Company determined that its valuation of its mortgages payable were classified within Level 3 of the fair value hierarchy.
(3)	The Company determined the estimated fair value of the Credit Facility and mortgages payable using a discounted cash flow model using a rate that reflects the average yield of similar market participants.

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 table below presents the Company’s financial assets measured at fair value on a recurring basis at  September 30, 2022 and December 31, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

	Balance at September 30, 2022		Level 1		Level 2		Level 3
Marketable equity securities	$	999,094	$	999,094	$	-	$	-

	Balance at December 31, 2021		Level 1		Level 2		Level 3
Marketable equity securities	$	1,211,739	$	1,211,739	$	-	$	-

The table below presents assets measured at fair value on a non-recurring basis at December 31, 2021 (in thousands):

	Balance at December 31, 2021		Level 1		Level 2		Level 3
Other investments	$	9,834	$	-	$	-	$	9,834

During the nine months ended September 30, 2022, the Company recognized impairment charges related to adjustments to property carrying values of $21.8 million, before noncontrolling interests of $15.8 million. The Company’s estimated fair values of these assets were primarily based upon estimated sales prices from signed contracts or letters of intent from third-party offers, which were less than the carrying value of the assets. The Company does not have access to the unobservable inputs used to determine the estimated fair values of third-party offers. Based on these inputs, the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.