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Disclosure About Fair Value of Financial Instruments | 6 Months Ended
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Jun. 30, 2022
Fair Value Disclosures [Abstract] |
Disclosure About Fair Value of Financial Instruments | Disclosure About Fair Value of Financial Instruments The following summarizes the levels of inputs that we use to measure fair value. Level 1. Quoted prices in active markets for identical assets or liabilities. Our Level 1 asset is our investment in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company’s Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Our Level 2 assets include the fair value of our mortgages and notes receivable. Our Level 2 liabilities include the fair value of our mortgages and notes payable and any interest rate swaps. The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of any interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments are considered in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented. Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Our Level 3 assets include any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or the terms of definitive sales contracts. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement. The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed at fair value within the fair value hierarchy:
|  |  |  | Level 1 |  | Level 2 |  | Level 3
|  | Total |  | Quoted Prices in Active Markets for Identical Assets or Liabilities |  | Significant Observable Inputs |  | Significant Unobservable Inputs
Fair Value at June 30, 2022: |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Mortgages and notes receivable, at fair value (1) |  | $ | 1,153 |  |  | $ | — |  |  | $ | 1,153 |  |  | $ | — |
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) |  | 2,500 |  |  | 2,500 |  |  | — |  |  | — |
Impaired real estate assets |  | 57,418 |  |  | — |  |  | — |  |  | 57,418 |
Total Assets |  | $ | 61,071 |  |  | $ | 2,500 |  |  | $ | 1,153 |  |  | $ | 57,418 |
Noncontrolling Interests in the Operating Partnership |  | $ | 84,583 |  |  | $ | 84,583 |  |  | $ | — |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Mortgages and notes payable, net, at fair value (1) |  | $ | 2,587,436 |  |  | $ | — |  |  | $ | 2,587,436 |  |  | $ | — |
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) |  | 2,500 |  |  | 2,500 |  |  | — |  |  | — |
Total Liabilities |  | $ | 2,589,936 |  |  | $ | 2,500 |  |  | $ | 2,587,436 |  |  | $ | — |
Fair Value at December 31, 2021: |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Mortgages and notes receivable, at fair value (1) |  | $ | 1,227 |  |  | $ | — |  |  | $ | 1,227 |  |  | $ | — |
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) |  | 2,866 |  |  | 2,866 |  |  | — |  |  | — |
Total Assets |  | $ | 4,093 |  |  | $ | 2,866 |  |  | $ | 1,227 |  |  | $ | — |
Noncontrolling Interests in the Operating Partnership |  | $ | 111,689 |  |  | $ | 111,689 |  |  | $ | — |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Mortgages and notes payable, net, at fair value (1) |  | $ | 2,907,492 |  |  | $ | — |  |  | $ | 2,907,492 |  |  | $ | — |
Interest rate swaps (in accounts payable, accrued expenses and other liabilities) |  | 60 |  |  | — |  |  | 60 |  |  | — |
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) |  | 2,866 |  |  | 2,866 |  |  | — |  |  | — |
Total Liabilities |  | $ | 2,910,418 |  |  | $ | 2,866 |  |  | $ | 2,907,552 |  |  | $ | — |
__________ (1) Amounts are not recorded at fair value on our Consolidated Balance Sheets at June 30, 2022 and December 31, 2021. The Level 3 impaired real estate assets as of June 30, 2022 reflected in the table above resulted from the shortened hold period assumptions for EQT Plaza as a result of our plan to exit the Pittsburgh market (see Note 15). The estimated fair value was calculated using broker opinions of value, which incorporate an income approach, as observable inputs were not available. Key assumptions used in the impairment calculation were estimated selling costs of 3.5% (including seller’s share of anticipated transfer taxes), the high end of an estimated discount rate ranging from 13.2% to 16.2% and an estimated terminal capitalization rate of 8.0%.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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