Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value of Assets and Liabilities

Assets and liabilities measured at fair value


			Quoted Prices in		Significant		Significant
			Active Markets for		Other		Unobservable
			Identical Assets		Observable Inputs		Inputs

Description	Total		(Level 1)		(Level 2)		(Level 3)

Assets held for sale(1)	$	12,924	$	—	$	12,924	$	—
Investments in available for sale securities(2)	$	22,393	$	22,393	$	—	$	—
Unsecured senior notes(3)	$	1,816,660	$	1,816,660	$	—	$	—
Secured debt(4)	$	726,242	$	—	$	—	$	726,242

⁽¹⁾

Assets held for sale consist of eight properties (11 buildings) that we expect to sell that are reported at fair value less costs to sell. We used offers to purchase these properties made by third parties or comparable sales transactions (Level 2 inputs) to determine the fair value of these properties. We have recorded cumulative impairments of approximately $13,500 to these properties in order to reduce their book value to fair value.

⁽²⁾

Our investments in available for sale securities include our 250,000 common shares of EQC and 4,235,000 common shares of Five Star. The fair values of these shares are based on quoted prices at September 30, 2014 in active markets (Level 1 inputs).

⁽³⁾

We estimate the fair values of our unsecured senior notes using an average of the bid and ask price of our outstanding six issuances of senior notes (Level 1 inputs) on or about September 30, 2014. The fair values of these senior note obligations exceed their aggregate book values of $1,743,272 by $73,387 because these notes were trading at premiums to their face amounts.

⁽⁴⁾

We estimate the fair values of our secured debt by using discounted cash flow analyses and currently prevailing market terms at September 30, 2014 (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.