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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value MeasurementsThe carrying amounts of restricted cash, certain components of other assets, accounts payable and accrued expenses, resident security deposits, and certain components of other liabilities approximate fair value due to the short maturity of these amounts. Our interest rate swap agreements, interest rate cap agreements, and investments in equity securities with a readily determinable fair value are recorded at fair value on a recurring basis within our condensed consolidated financial statements. The fair values of our interest rate caps and swaps, which are classified as Level 2 in the fair value hierarchy, are estimated using market values of instruments with similar attributes and maturities. See Note 8 for the details of the condensed consolidated balance sheet classification and the fair values for the interest rate caps and swaps. The fair values of our investments in equity securities with a readily determinable fair value are classified as Level 1 in the fair value hierarchy. For additional information related to our investments in equity securities as of September 30, 2023 and December 31, 2022, refer to Note 6.

Recurring Fair Value Measurements

The following table displays the carrying values and fair values of financial instruments as of September 30, 2023 and December 31, 2022:


		September 30, 2023				December 31, 2022
		Carrying Value		Fair Value		Carrying Value		Fair Value
Assets carried at historical cost on the condensed consolidated balance sheets:
Investments in debt securities(1)	Level 2	$	86,617	$	83,111	$	86,980	$	84,992

Liabilities carried at historical cost on the condensed consolidated balance sheets:
Unsecured Notes — public offering(2)	Level 1	$	3,029,281	$	2,546,147	$	2,238,066	$	1,798,658
Mortgage loans(3)	Level 2	1,638,792		1,550,094		1,653,724		1,588,550
Unsecured Notes — private placement(4)	Level 2	300,000		225,582		300,000		228,726
Secured Term Loan(5)	Level 3	403,129		348,818		403,363		356,557
Term Loan Facilities(6)	Level 3	3,225,000		3,228,291		3,225,000		3,233,677

(1)The carrying values of investments in debt securities are shown net of discount.

(2)The carrying value of the Unsecured Notes — public offering includes $20,719 and $11,934 of unamortized discount and excludes $23,979 and $18,534 of deferred financing costs as of September 30, 2023 and December 31, 2022, respectively.

(3)The carrying values of the mortgage loans include $1,320 and $1,584 of unamortized discount and exclude $6,819 and $7,929 of deferred financing costs as of September 30, 2023 and December 31, 2022, respectively.

(4)The carrying value of the Unsecured Notes — private placement excludes $1,220 and $1,347 of deferred financing costs as of September 30, 2023 and December 31, 2022, respectively.

(5)The carrying value of the Secured Term Loan excludes $1,669 and $1,833 of deferred financing costs as of September 30, 2023 and December 31, 2022, respectively.

(6)The carrying values of the Term Loan Facilities exclude $15,275 and $21,433 of deferred financing costs as of September 30, 2023 and December 31, 2022, respectively.

We value our Unsecured Notes — public offering using quoted market prices for each underlying issuance, a Level 1 price within the fair value hierarchy. The fair values of our investments in debt securities, Unsecured Notes — private placement, and mortgage loans, which are classified as Level 2 in the fair value hierarchy, are estimated based on market bid prices of comparable instruments at period end.

We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. Availability of secondary market activity and consistency of pricing from third-party sources impacts our ability to classify securities as Level 2 or Level 3.

The following table displays the significant unobservable inputs used to develop our Level 3 fair value measurements as of September 30, 2023:

Quantitative Information about Level 3 Fair Value Measurement(1)

Fair Value

Valuation Technique

Unobservable Input

Rate

Secured Term Loan

348,818

Discounted Cash Flow

Effective Rate

5.76%

Term Loan Facilities

3,228,291

Discounted Cash Flow

Effective Rate

5.00%

—

6.77%

(1)Our Level 3 fair value instruments require interest only payments.

Nonrecurring Fair Value Measurements

Our assets measured at fair value on a nonrecurring basis are those assets for which we have recorded impairments.

Single-Family Residential Properties

The single-family residential properties for which we have recorded impairments, measured at fair value on a nonrecurring basis, are summarized below:



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Investments in single-family residential properties, net held for sale (Level 3):
Pre-impairment amount	$	567	$	125	$	1,606	$	861
Total impairments	(83)		(101)		(342)		(238)
Fair value	$	484	$	24	$	1,264	$	623

We did not record any impairments for our investments in single-family residential properties, net held for use during the three and nine months ended September 30, 2023 and 2022. For additional information related to our single-family residential properties as of September 30, 2023 and December 31, 2022, refer to Note 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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