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Fair Value Disclosures | 6 Months Ended
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Jun. 30, 2024
Fair Value Disclosures [Abstract] |
Fair Value Disclosures | Fair Value Disclosures The Company has certain financial instruments that are required to be measured under the FASB’s Fair Value Measurement guidance. The Company currently does not have any non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. Derivative Financial Instruments The Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives also use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2024, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives and therefore, classified its derivatives as Level 2 within the fair value reporting hierarchy. The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 aggregated by the level in the fair value hierarchy within which those measurements are classified and by derivative type. Assets and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2024 and December 31, 2023 (Dollars in thousands)
Description |  | Quoted Prices in Active Markets for Identical Assets (Level I) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance at end of period
June 30, 2024 |  |  |  |  |  |  |  |
Cross-Currency Swaps (1) |  | $ | — |  |  | $ | 324 |  |  | $ | — |  |  | $ | 324 |
Currency Forward Agreements (1) |  | — |  |  | 1,067 |  |  | — |  |  | 1,067 |
Interest Rate Swap Agreements (1) |  | — |  |  | 1,074 |  |  | — |  |  | 1,074 |
December 31, 2023 |  |  |  |  |  |  |  |
Cross-Currency Swaps (1) |  | $ | — |  |  | $ | 384 |  |  | $ | — |  |  | $ | 384 |
Currency Forward Agreements (2) |  | — |  |  | (4,908) |  |  | — |  |  | (4,908) |
Interest Rate Swap Agreements (1) |  | — |  |  | 876 |  |  | — |  |  | 876 |
(1) Included in "Other assets" in the accompanying consolidated balance sheets. (2) Included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets. Non-recurring fair value measurements The table below presents the Company's assets measured at fair value on a non-recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements are classified. Assets Measured at Fair Value on a Non-Recurring Basis at June 30, 2024 and December 31, 2023 (Dollars in thousands)
Description | Quoted Prices in Active Markets for Identical Assets (Level I) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance at end of period
June 30, 2024 |  |  |  |  |  |  |
Real estate investments, net (1) | $ | — |  |  | $ | — |  |  | $ | 6,500 |  |  | $ | 6,500 |
December 31, 2023 |  |  |  |  |  |  |
Real estate investments, net (2) | $ | — |  |  | $ | — |  |  | $ | 39,150 |  |  | $ | 39,150 |
(1) As further discussed in Note 4, d uring the six months ended June 30, 2024, the Company recorded an impairment charge of $11.8 million related to real estate investments, net, on one property. Management estimated the fair value of this investment taking into account various factors, including an independent appraisal, shortened hold period and market conditions. The significant inputs and assumptions used in the real estate appraisal included land valued at approximately $475 thousand per acre less demolition costs of approximately $13.91 per square foot of building. These measurements were classified within Level 3 of the fair value hierarchy because many of the assumptions were not observable. (2) During the year ended December 31, 2023, the Company recorded an impairment charge of $67.4 million related to real estate investments, net, on 12 properties. Management estimated the fair values of these investments taking into account various factors including independent appraisals, shortened hold periods and market conditions. The significant inputs and assumptions used in the real estate appraisals included market rents ranging from $4.50 per square foot to $20.00 per square foot, discount rates ranging from 8.50% to 11.50% and terminal capitalization rates ranging from 7.75% to 10.25%. These measurements were classified within Level 3 of the fair value hierarchy because many of the assumptions were not observable. Fair Value of Financial Instruments The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instruments at June 30, 2024 and December 31, 2023: Mortgage notes receivable and related accrued interest receivable, net: The fair value of the Company’s mortgage notes and related accrued interest receivable, net, is estimated by discounting the future cash flows of each instrument using current market rates. At June 30, 2024, the Company had a carrying value of $593.1 million in fixed-rate mortgage notes receivable outstanding, including related accrued interest and allowance for credit losses, with a weighted average interest rate of approximately 8.82%. The fixed-rate mortgage notes bear interest at rates of 6.50% to 12.50%. Discounting the future cash flows for fixed-rate mortgage notes receivable using rates of 6.50% to 11.20%, management estimates the fair value of the fixed-rate mortgage notes receivable to be approximately $631.9 million with an estimated weighted average market rate of 7.94% at June 30, 2024. At December 31, 2023, the Company had a carrying value of $569.8 million in fixed-rate mortgage notes receivable outstanding, including related accrued interest and allowance for credit losses, with a weighted average interest rate of approximately 8.82%. The fixed-rate mortgage notes bear interest at rates of 6.99% to 12.32%. Discounting the future cash flows for fixed-rate mortgage notes receivable using rates of 7.15% to 10.25%, management estimates the fair value of the fixed-rate mortgage notes receivable to be $611.2 million with an estimated weighted average market rate of 7.84% at December 31, 2023. Derivative instruments: Derivative instruments are carried at their fair value. Debt instruments: The fair value of the Company's debt is estimated by discounting the future cash flo ws of each instrument using current market rates. At June 30, 2024, the Company had a carrying value of $25.0 million in variable-rate debt outstanding with an average interest rate of approximately 5.46%. The carrying value of the variable-rate debt outstanding approximated the fair value at June 30, 2024. At December 31, 2023, the Company had a carrying value of $25.0 million in variable-rate debt outstanding with an interest rate of approximately 5.48%. The carrying value of the variable-rate debt outstanding approximated the fair value at December 31, 2023. At both June 30, 2024 and December 31, 2023, the $25.0 million of variable-rate debt outstanding, discussed above, had been effectively converted to a fixed rate by an interest rate swap agreement. See Note 10 for additional information related to the Company's interest rate swap agreement. At June 30, 2024, the Company had a carrying value of $2.82 billion in fixed-rate long-term debt outstanding with a weighted average interest rate of approximately 4.34%. Discounting the future cash flows for fixed-rate debt using June 30, 2024 market rates of 6.07% to 6.55%, management estimates the fair value of the fixed rate debt to be approximately $2.63 billion with an estimated weighted average market rate of 6.30% at June 30, 2024. At December 31, 2023, the Company had a carrying value of $2.82 billion in fixed-rate long-term debt outstanding with a weighted average interest rate of approximately 4.34%. Discounting the future cash flows for fixed-rate debt using December 31, 2023 market rates of 6.46% to 6.70%, management estimates the fair value of the fixed rate debt to be approximately $2.58 billion with an estimated weighted average market rate of 6.60% at December 31, 2023.
Assets Measured At Fair Value On A Recurring Basis | The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 aggregated by the level in the fair value hierarchy within which those measurements are classified and by derivative type. Assets and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2024 and December 31, 2023 (Dollars in thousands)
Description |  | Quoted Prices in Active Markets for Identical Assets (Level I) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance at end of period
June 30, 2024 |  |  |  |  |  |  |  |
Cross-Currency Swaps (1) |  | $ | — |  |  | $ | 324 |  |  | $ | — |  |  | $ | 324 |
Currency Forward Agreements (1) |  | — |  |  | 1,067 |  |  | — |  |  | 1,067 |
Interest Rate Swap Agreements (1) |  | — |  |  | 1,074 |  |  | — |  |  | 1,074 |
December 31, 2023 |  |  |  |  |  |  |  |
Cross-Currency Swaps (1) |  | $ | — |  |  | $ | 384 |  |  | $ | — |  |  | $ | 384 |
Currency Forward Agreements (2) |  | — |  |  | (4,908) |  |  | — |  |  | (4,908) |
Interest Rate Swap Agreements (1) |  | — |  |  | 876 |  |  | — |  |  | 876 |
(1) Included in "Other assets" in the accompanying consolidated balance sheets. (2) Included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.
Fair Value Measurements, Nonrecurring [Table Text Block] | The table below presents the Company's assets measured at fair value on a non-recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements are classified. Assets Measured at Fair Value on a Non-Recurring Basis at June 30, 2024 and December 31, 2023 (Dollars in thousands)
Description | Quoted Prices in Active Markets for Identical Assets (Level I) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance at end of period
June 30, 2024 |  |  |  |  |  |  |
Real estate investments, net (1) | $ | — |  |  | $ | — |  |  | $ | 6,500 |  |  | $ | 6,500 |
December 31, 2023 |  |  |  |  |  |  |
Real estate investments, net (2) | $ | — |  |  | $ | — |  |  | $ | 39,150 |  |  | $ | 39,150 |

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 + Details
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- Definition Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 + Details
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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/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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