Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of carrying value and fair value of the entity's financial instruments

The carrying value and fair value of our financial instruments as of June 30, 2021 and December 31, 2020 assuming election of fair value for our financial assets and financial liabilities were as follows (in thousands):


	At June 30, 2021					At December 31, 2020
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Mortgage loans receivable, net of loan loss reserve	$	257,051	$	301,881	⁽¹⁾	$	257,251	$	299,751	⁽¹⁾
Notes receivable, net of loan loss reserve		13,730		13,403	⁽²⁾		14,465		13,893	⁽²⁾
Bank borrowings		65,900		65,900	⁽³⁾		89,900		89,900	⁽³⁾
Senior unsecured notes, net of debt issue costs		552,559		578,715	⁽⁴⁾		559,482		560,140	⁽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 June 30, 2021 and December 31, 2020 was 10.0%.

(2)

Our investments in notes receivable are classified as Level 3. 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 flows of the notes receivable at June 30, 2021 and December 31, 2020, were 6.0% and 6.6%, respectively.

(3)	Our bank borrowings bear interest at a variable interest rate. The estimated fair value of our bank borrowings approximated their carrying values at June 30, 2021 and December 31, 2020 based upon prevailing market interest rates for similar debt arrangements.

(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 June 30, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.00% for those maturing before year 2026 and 3.25% for those maturing at or beyond year 2026. At December 31, 2020, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.25% for those maturing before year 2026 and 3.50% for those maturing at or beyond year 2026.