Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Assets Measured on a Nonrecurring Basis

The following table sets forth information regarding the Company's assets that are measured at fair value on a nonrecurring basis and related impairment charges for the six months ended June 30, 2019:



			Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss on Impairment
Long-lived assets	$	127,319	$	—	$	—	$	127,319	$	66,433

The following table sets forth information regarding the Company's assets that were measured at fair value on a nonrecurring basis and related impairment charges for the six months ended June 30, 2018:



			Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss on Impairment
Long-lived assets	$	34,000	$	—	$	—	$	34,000	$	70,044

Schedule of Impairment on Real Estate Properties

During the six months ended June 30, 2019, the Company recognized an impairment of real estate of $66,662 related to three malls and one community center.

Impairment Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Greenbrier Mall ⁽¹⁾

Chesapeake, VA

Mall

22,770

56,300

March/April

Honey Creek Mall ⁽²⁾

Terre Haute, IN

Mall

2,045

14,360

June

The Forum at Grandview ⁽³⁾

Madison, MS

All Other

8,582

31,559

June

EastGate Mall ⁽⁴⁾

Cincinnati, OH

Mall

33,265

25,100

January/March

Other adjustments ⁽⁵⁾

Various

Mall

(229

)

—

66,433

127,319

(1)

In accordance with the Company's quarterly impairment process, the Company wrote down the book value of the mall to its estimated fair value of $56,300. The mall has experienced a decline in cash flows due to store closures and rent reductions. Additionally, one anchor was vacant as of the date of impairment. Management determined the fair value of Greenbrier Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 11.0% and a discount rate 11.5%.


(2)	During the quarter ended March 31, 2019, the Company adjusted the book value of the mall to the net sales price of $14,360 based on a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The mall was sold in April 2019 and $(239) was recorded related to a true-up of closing costs. See Note 6 for additional information.


(3)	The Company adjusted the book value to the net sales price of $31,559 based on a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The property was classified as held for sale at June 30, 2019 and was sold in July 2019. See Note 6 for additional information.

(4)

In accordance with the Company's quarterly impairment process, the Company wrote down the book value of the mall to its estimated fair value of $25,100. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of EastGate Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 14.5% and a discount rate 15.0%.

(5)

Related to true-ups of estimated expenses to actual expenses for properties sold in prior periods.

During the six months ended June 30, 2018, the Company recognized an impairment of real estate of $70,044 related to two malls:



Impairment Date	Property	Location	Segment Classification	Loss on Impairment		Fair Value
March	Janesville Mall ⁽¹⁾	Janesville, WI	Malls	$	18,061	$	—	⁽²⁾
June	Cary Towne Center ⁽³⁾	Cary, NC	Malls	51,983		34,000
				$	70,044	$	34,000


(1)	The Company adjusted the book value of the mall to the net sales price of $17,640 in a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The mall was sold in July 2018. See Note 6 for additional information.


(2)	The long-lived asset was not included in the Company's condensed consolidated balance sheets at December 31, 2018 as the Company no longer had an interest in the property.

(3)

In June 2018, the Company was notified by IKEA that, as a result of a shift in its corporate strategy, it was terminating the contract to purchase land at the mall upon which it would develop and open a store. Under the terms of the interest-only non-recourse loan secured by the mall, the loan matures on the date the IKEA contract terminates if that date is prior to the scheduled maturity date of March 5, 2019. The Company engaged in conversations with the lender regarding a potential restructure of the loan. Based on the results of these conversations, the Company concluded that an impairment was required because it was unlikely to recover the asset's net carrying value through future cash flows. Management determined the fair value of Cary Towne Center using a discounted cash flow methodology. The discounted cash flow used assumptions including a 10-year holding period, a capitalization rate of 12.0% and a discount rate of 13%. See Note 8 for additional information.