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Fair Value Disclosures
 6 Months Ended
Jun. 30, 2014
Fair Value Disclosures [Abstract]  
Fair Value Disclosures

6. Fair Value Disclosures

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:

 

  •   Level 1—Quoted prices for identical instruments in active markets

 

  •   Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date

 

  •   Level 3—Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date

Nonfinancial assets and liabilities include items such as inventory and long lived assets that are measured at fair value when acquired and resulting from impairment, if deemed necessary. During the six months ended June 30, 2014 and the year ended December 31, 2013, the Company did not record any fair value adjustments to those financial and nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

Fair Value of Financial Instruments

Financial instruments as of June 30, 2014 were comprised of the Facility and a secured seller financed loan. Financial instruments as of December 31, 2013 were comprised of unsecured and secured revolving credit facilities, secured acquisition and development loan agreements and secured construction loan agreements.

 

At June 30, 2014 and December 31, 2013, as required by ASC 820, Financial Instruments, the following presents net book values and estimated fair values of notes payable (in thousands):

 

        June 30, 2014         December 31, 2013   
     Hierarchy    Cost      Fair Value      Cost      Fair Value  

Notes payable

               

Unsecured revolving credit facility

    Level 2    $ 210,000       $ 210,000       $ —         $ —     

Secured revolving credit facilities

    Level 3      —           —           90,689         90,689   

Seller financed loans

    Level 3      17,128         17,128         —           —     

Acquisition and development loans

    Level 3      —           —           31,591         31,591   

Construction loans

    Level 3      —           —           15,832         15,832   
     

 

 

     

 

 

     

 

 

     

 

 

  

Total notes payable

       $ 227,128       $ 227,128       $ 138,112       $ 138,112   
     

 

 

     

 

 

     

 

 

     

 

 

  

The book value of our seller financed loans and unsecured revolving credit facility at June 30, 2014 approximated fair value due to the limited amount of time since we entered into the arrangements in May 2014 and June 2014, respectively. Estimated fair values of the outstanding secured revolving credit facilities, acquisition and development loans, and construction loans at December 31, 2013 were based on cash flow models discounted at market interest rates that considered underlying risks of the debt. Due to the short term nature of the secured revolving credit facilities, acquisition and development loans and construction loans, book value approximated fair value at December 31, 2013.