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Fair Value of Assets and Liabilities | 9 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The following table presents certain of our assets that are measured at fair value at September 30, 2022 and December 31, 2021, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
|  | As of September 30, 2022 |  | As of December 31, 2021
Description |  | Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
Recurring Fair Value Measurements Assets: |  |  |  |  |  |  |  |
Investment in AlerisLife (Level 1) (1) |  | $ | 10,156 |  |  | $ | 10,156 |  |  | $ | 31,540 |  |  | $ | 31,540 |
Investment in unconsolidated joint venture (Level 3) (2) |  | $ | 108,395 |  |  | $ | 108,395 |  |  | $ | 215,127 |  |  | $ | 215,127 |
Investment in unconsolidated joint venture (Level 3) (3) |  | $ | 51,081 |  |  | $ | 51,081 |  |  | $ | — |  |  | $ | — |
(1)Our 10,691,658 shares of common stock of AlerisLife Inc., or AlerisLife, are included in other assets, net in our condensed consolidated balance sheets, and are reported at fair value, which is based upon quoted market prices on The Nasdaq Stock Market LLC, or Nasdaq, (Level 1 inputs). During the three months ended September 30, 2022 and 2021, we recorded unrealized losses of $2,674 and $14,755, respectively, and during the nine months ended September 30, 2022 and 2021, we recorded unrealized losses of $21,384 and $26,943, respectively, which are included in losses on equity securities, net in our condensed consolidated statements of comprehensive income (loss), to adjust the carrying value of our investment in AlerisLife common shares to their fair value. See Note 11 for further information about our investment in AlerisLife. (2)The 10% equity interest we own in the Seaport JV is included in investments in unconsolidated joint ventures in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are a discount rate of 5.58%, an exit capitalization rate of 5.25%, a holding period of approximately 10 years and market rents. The assumptions made in the fair value analysis are based on the location, type and nature of the property, and current and anticipated market conditions, which are derived from appraisers, industry publications and our experience. See Note 2 for further information regarding this joint venture. (3)The 20% equity interest we own in the LSMD JV is included in investments in unconsolidated joint ventures in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are discount rates of between 5.60% and 8.00%, exit capitalization rates of between 5.10% and 6.25%, holding periods of approximately 10 years and market rents. The assumptions we made in the fair value analysis are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers, industry publications and our experience. See Note 2 for further information regarding this joint venture. In addition to the assets described in the table above, our financial instruments at September 30, 2022 and December 31, 2021 included cash and cash equivalents, restricted cash, other assets, our revolving credit facility, senior unsecured notes, secured debt and finance leases and other unsecured obligations and liabilities. The fair values of these financial instruments approximated their carrying values in our condensed consolidated financial statements as of such dates, except as follows:
|  | As of September 30, 2022 |  | As of December 31, 2021
Description |  | Carrying Amount (1) |  | Estimated Fair Value |  | Carrying Amount (1) |  | Estimated Fair Value
Senior unsecured notes, 4.750% coupon rate, due 2024 |  | $ | 249,558 |  |  | $ | 215,470 |  |  | $ | 249,348 |  |  | $ | 257,695 |
Senior unsecured notes, 9.750% coupon rate, due 2025 |  | 495,274 |  |  | 452,305 |  |  | 987,903 |  |  | 1,081,990 |
Senior unsecured notes, 4.750% coupon rate, due 2028 |  | 493,154 |  |  | 315,000 |  |  | 492,199 |  |  | 491,480 |
Senior unsecured notes, 4.375% coupon rate, due 2031 |  | 492,771 |  |  | 323,750 |  |  | 492,127 |  |  | 480,763 |
Senior unsecured notes, 5.625% coupon rate, due 2042 |  | 342,469 |  |  | 165,620 |  |  | 342,183 |  |  | 309,260 |
Senior unsecured notes, 6.250% coupon rate, due 2046 |  | 243,267 |  |  | 114,100 |  |  | 243,051 |  |  | 226,500 |
Secured debts (2) |  | 40,936 |  |  | 39,171 |  |  | 69,713 |  |  | 71,963 |
|  | $ | 2,357,429 |  |  | $ | 1,625,416 |  |  | $ | 2,876,524 |  |  | $ | 2,919,651 |
(1)Includes unamortized net debt issuance costs, premiums and discounts. (2)We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition. We estimated the fair value of our two issuances of senior unsecured notes due 2042 and 2046 based on the closing price on Nasdaq (Level 1 input) as of September 30, 2022 and December 31, 2021, respectively. We estimated the fair values of our four issuances of senior unsecured notes due 2024, 2025, 2028 and 2031 using an average of the bid and ask price on Nasdaq on or about September 30, 2022 and December 31, 2021 (Level 2 inputs as defined in the fair value hierarchy under GAAP). We estimated the fair values of our secured debts by using discounted cash flows analyses and currently prevailing market terms as of the measurement date (Level 3 inputs as defined in the fair value hierarchy under GAAP). Because Level 3 inputs are unobservable, our estimated fair values may differ materially from the actual fair values.

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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 https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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