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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
Tier |  | Description
Level 1 |  | Observable inputs such as quoted prices in active markets
Level 2 |  | Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3 |  | Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions
Fair Value Measurements on a Recurring Basis The following table sets forth our assets and liabilities that are measured at fair value within the fair value hierarchy (in thousands):
|  |  |  | Level 1 |  | Level 2 |  | Level 3
|  |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities |  | Significant Observable Inputs |  | Significant Unobservable Inputs
|  | Total |  |  |
Fair value as of September 30, 2018: |  |  |  |  |  |  |  |
Asset: |  |  |  |  |  |  |  |
Interest rate swaps (prepaids and other assets) |  | $ | 9,440 |  |  | $ | — |  |  | $ | 9,440 |  |  | $ | — |
Total assets |  | $ | 9,440 |  |  | $ | — |  |  | $ | 9,440 |  |  | $ | — |
|  |  |  | Level 1 |  | Level 2 |  | Level 3
|  |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities |  | Significant Observable Inputs |  | Significant Unobservable Inputs
|  | Total |  |  |
Fair value as of December 31, 2017: |  |  |  |  |  |  |  |
Asset: |  |  |  |  |  |  |  |
Interest rate swaps (prepaids and other assets) |  | $ | 5,533 |  |  | $ | — |  |  | $ | 5,533 |  |  | $ | — |
Total assets |  | $ | 5,533 |  |  | $ | — |  |  | $ | 5,533 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Interest rate swaps (other liabilities) |  | $ | 188 |  |  | $ | — |  |  | $ | 188 |  |  | $ | — |
Total liabilities |  | $ | 188 |  |  | $ | — |  |  | $ | 188 |  |  | $ | — |
Fair values of interest rate swaps are approximated using Level 2 inputs based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well recognized financial principles including counterparty risks, credit spreads and interest rate projections, as well as reasonable estimates about relevant future market conditions. Fair Value Measurements on a Nonrecurring Basis The following table sets forth our assets that are measured at fair value on a nonrecurring basis within the fair value hierarchy (in thousands):
|  |  |  | Level 1 |  | Level 2 |  | Level 3
|  |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities |  | Significant Observable Inputs |  | Significant Unobservable Inputs
|  | Total |  |  |
Fair value as of September 30, 2018: |  |  |  |  |  |  |  |
Asset: |  |  |  |  |  |  |  |
Long-lived assets |  | $ | 50,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 50,000 |
During the third quarter 2018, we recorded a $49.7 million impairment charge in our consolidated statement of operations which equaled the excess of the our Jeffersonville outlet center carrying value over its estimated fair value. The estimated fair value is based on the income approach. The income approach involves discounting the estimated income stream and reversion (presumed sale) value of a property over an estimated holding period to a present value at a risk-adjusted rate. Discount rates and terminal capitalization rates utilized in this approach are derived from property-specific information, market transactions and other financial and industry data. The terminal capitalization rate and discount rate are significant unobservable inputs in determining the fair value. The terminal capitalization rate used in the calculation was 10% and the discount rate used was 10%. These inputs are classified under Level 3 in the fair value hierarchy above. Other Fair Value Disclosures The estimated fair value within the fair value hierarchy and recorded value of our debt consisting of senior unsecured notes, unsecured term loans, secured mortgages and unsecured lines of credit were as follows (in thousands):
|  | September 30, 2018 |  | December 31, 2017
Level 1 Quoted Prices in Active Markets for Identical Assets or Liabilities |  | $ | — |  |  | $ | — |
Level 2 Significant Observable Inputs |  | 1,086,988 |  |  | 1,139,064 |
Level 3 Significant Unobservable Inputs |  | 617,824 |  |  | 636,476 |
Total fair value of debt |  | $ | 1,704,812 |  |  | $ | 1,775,540 |
Recorded value of debt |  | $ | 1,747,660 |  |  | $ | 1,763,651 |
Our senior unsecured notes are publicly-traded which provides quoted market rates. However, due to the limited trading volume of these notes, we have classified these instruments as Level 2 in the hierarchy. Our other debt is classified as Level 3 given the unobservable inputs utilized in the valuation. Our unsecured term loan, unsecured lines of credit and variable interest rate mortgages are all LIBOR based instruments. When selecting the discount rates for purposes of estimating the fair value of these instruments, we evaluated the original credit spreads and do not believe that the use of them differs materially from current credit spreads for similar instruments and therefore the recorded values of these debt instruments is considered their fair value. The carrying values of cash and cash equivalents, receivables, accounts payable, accrued expenses and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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