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Note 17 - Fair Value Disclosure of Financial Instruments | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | 17. Fair Value Disclosure of Financial Instruments: All financial instruments of the Company are reflected in the accompanying 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 and mortgage and other finance receivables 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. The fair value for embedded derivative liability is based on using the “with-and-without” method. 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):
|  | December 31, |
|  | 2023 |  |  | 2022 |
|  | Carrying Amounts |  |  | Estimated Fair Value |  |  | Carrying Amounts |  |  | Estimated Fair Value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage and other financing receivables (1) |  | $ | 130,745 |  |  | $ | 122,323 |  |  | $ | 87,359 |  |  | $ | 87,359 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Notes payable, net (2) |  | $ | 7,262,851 |  |  | $ | 6,671,450 |  |  | $ | 6,780,969 |  |  | $ | 5,837,401 |
Mortgages payable, net (3) |  | $ | 353,945 |  |  | $ | 329,955 |  |  | $ | 376,917 |  |  | $ | 311,659 |
| (1) | The Company determined that the valuation of its mortgage and other financing receivables were classified within Level 3 of the fair value hierarchy.
| (2) | The Company determined that the valuation of its senior unsecured notes were classified within Level 2 of the fair value hierarchy. The estimated fair value amounts classified as Level 2 as of December 31, 2023 and 2022, were $6.7 billion and $5.8 billion, respectively. The carrying value includes deferred financing costs of $65.0 million and $66.4 million as of December 31, 2023 and 2022, respectively.
| (3) | The Company determined that its valuation of its mortgages payable were classified within Level 3 of the fair value hierarchy. The carrying value includes deferred financing costs of $1.2 million and $1.7 million as of December 31, 2023 and 2022, respectively.
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 and embedded derivative liabilities. 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. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level of the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022, aggregated by the level of the fair value hierarchy within which those measurements fall (in thousands):
|  | Balance at December 31, 2023 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable equity securities |  | $ | 330,057 |  |  | $ | 330,057 |  |  | $ | - |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Embedded derivative liability |  | $ | 30,914 |  |  | $ | - |  |  | $ | - |  |  | $ | 30,914 |
|  | Balance at December 31, 2022 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable equity securities |  | $ | 597,732 |  |  | $ | 597,732 |  |  | $ | - |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Embedded derivative liability |  | $ | 56,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 56,000 |
The significant unobservable input (Level 3 inputs) used in measuring the Company’s embedded derivative liability, which is categorized with Level 3 of the fair value hierarchy, is the discount rate of 6.40% and 8.00% as of December 31, 2023 and 2022, respectively. The table below summarizes the change in the fair value of the embedded derivative liability for the year ended December 31, 2023 (in thousands):
|  |  | Fair Value of Embedded Derivative Liability |
Balance as of January 1, 2023 |  | $ | 56,000 |
Settlements |  |  | (22,446) |
Change in fair value (included in Other income, net) |  |  | (734) |
Change in fair value (included in Paid-in capital) |  |  | (1,906) |
Balance as of December 31, 2023 |  | $ | 30,914 |
Assets measured at fair value on a non-recurring basis at December 31, 2023 are as follows (in thousands):
|  | Balance at December 31, 2023 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Real estate |  | $ | 11,724 |  |  | $ | - |  |  | $ | - |  |  | $ | 11,724 |
During the year ended December 31, 2023, the Company recognized impairment charges related to adjustments to property carrying values of $14.0 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.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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