Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2018

The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of:


	December 31, 2018														December 31, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Derivative assets⁽¹⁾	$	—	$	16,687	$	—	$	16,687	$	—	$	12,586	$	—	$	12,586
Derivative liabilities⁽²⁾	$	—	$	—	$	—	$	—	$	—	$	265	$	—	$	265
Non-real estate investment⁽¹⁾⁽³⁾	$	—	$	2,713	$	—	$	2,713	$	—	$	—	$	—	$	—

_____________

1.Included in the prepaid expenses and other assets, net line item in the Consolidated Balance Sheets.

2.Included in the accounts payable, accrued liabilities and other line item on the Consolidated Balance Sheets.

3.Related to our investment in shares in a non-public company. Pursuant to our adoption of ASU 2016-01 during 2018, the Company marked the investment to fair value during the second quarter of 2018. The investment was not fair valued in 2017 and was accounted for under the cost method.

Other Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of fair value, using Level 1 inputs, because of the short-term nature of these instruments. Fair value for investment in U.S. Government securities are estimates based on Level 1 inputs. Fair values for debt are estimates based on rates currently prevailing for similar instruments of similar maturities using Level 2 inputs.

The table below represents the carrying value and fair value of the Company’s investment in securities and debt as of:


	December 31, 2018						December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets
U.S. Government securities	$	146,880	$	147,686	$	—	$	—
Liabilities
Unsecured debt⁽¹⁾⁽²⁾	$	2,274,352	$	2,227,265	$	1,974,278	$	1,960,560
Secured debt⁽¹⁾	$	365,381	$	354,109	$	464,311	$	458,441
In-substance defeased debt	$	138,223	$	135,894	$	—	$	—
Joint venture partner debt	$	66,136	$	66,136	$	—	$	—

_____________

1.Amounts represent debt excluding net deferred financing costs.

2.The $400.0 million registered senior notes were issued at a discount. The discount, net of amortization was $648 thousand and $722 thousand at December 31, 2018 and December 31, 2017, respectively, and is included within unsecured debt.

The following table summarizes the carrying value and fair value of our U.S. Government securities by the contractual maturity date:


	Carrying Value		Fair Value
Due in 1 year	$	6,175	$	6,187
Due in 1 year through 5 years	140,705		141,499
TOTAL	$	146,880	$	147,686