Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Fair Value Measurements

16. Fair Value Measurements

        In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses on items for which the fair value option has been elected reported in earnings. We did not adopt the elective fair market value option in our financial statements.

        The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and fair value of our financial instruments as of December 31, 2011 and 2010 assuming election of fair value for our financial assets and financial liabilities were as follows (in thousands):

	At December 31, 2011					At December 31, 2010
	Carrying Value		Fair Value			Carrying Value		Fair Value
Mortgage loans receivable	$	53,081	$	61,844	(1)	$	59,026	$	67,697	(1)
Marketable debt securities		6,485		6,500	(2)		6,478		6,695	(2)
Bonds payable		3,200		3,200	(3)		3,730		3,730	(3)
Bank borrowings		56,000		56,000	(3)		37,700		37,700	(3)
Senior unsecured notes		100,000		101,223	(4)		50,000		49,943	(4)

(1)

Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at December 31, 2011 and 2010 was 6.0% and 7.5%, respectively.

(2)

Our investment in marketable debt securities is classified as Level 2. The fair value is measured using quoted market rates based on most recent transactions from an independent third party source. The pricing of our marketable debt securities as of December 31, 2011 and 2010 was 100.0% and 103.0%, respectively.

(3)

Our bonds payable and bank borrowings are at a variable interest rate. The estimated fair value of our bonds payable approximated their carrying values at December 31, 2011 and 2010 based upon prevailing market interest rates for similar debt arrangements. At December 31, 2011, we had $56,000 outstanding under our Unsecured Credit Agreement and $154,000 was available for borrowing. In January 2012, we borrowed $4,000. After this borrowing we had $60,000 outstanding and $150,000 available for borrowing.

(4)

Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management's estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At December 31, 2011 and 2010, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.8% and 5.5%, respectively.