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Combined Guarantor Subsidiaries - Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Condensed Financial Statements Captions [Line Items]

Schedule of Assets Measured at Fair Value on 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 years ended December 31, 2019 and 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
2019:
Long-lived assets	$	199,740	$	—	$	—	$	199,740	$	239,521
2018:
Long-lived assets	$	91,841	$	—	$	—	$	91,841	$	174,529

Schedule of Impairment on Real Estate Properties

During the year ended December 31, 2019, the Company recognized impairments of real estate of $ 239,521 related to six malls and one community center. The Properties were classified for segment reporting purposes as listed below (see section below for information on outparcels). See Note 12 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Greenbrier Mall ⁽¹⁾

Chesapeake, VA

Malls

22,770

56,300

March/April

Honey Creek Mall ⁽²⁾

Terre Haute, IN

Malls

2,045

—

June

The Forum at Grandview ⁽³⁾

Madison, MS

All Other

8,582

—

June

EastGate Mall ⁽⁴⁾

Cincinnati, OH

Malls

33,265

25,100

September

Mid Rivers Mall ⁽⁵⁾

St. Peters, MO

Malls

83,621

53,340

September

Laurel Park Place ⁽⁶⁾

Livonia, MI

Malls

52,067

26,000

December

Park Plaza Mall ⁽⁷⁾

Little Rock, AR

Malls

37,400

39,000

January/March

Other adjustments ⁽⁸⁾

Various

Malls

( 229

)

—

239,521

199,740

(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. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. 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 11.5% and a discount rate of 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. 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 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 had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. 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 of 15.0%.

(5)

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 $ 53,340. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Mid Rivers 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 12.5% and a discount rate of 13.25%.

(6)

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 $ 26,000. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Laurel Park Place 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 13.5% and a discount rate of 14.0%.

(7)

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 $ 39,000. The mall had experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Park Plaza 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 13.0% and a discount rate of 14.0%.

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

Long-lived Assets Measured at Fair Value in 2018

During the year ended December 31, 2018, the Company recognized impairments of real estate of $ 174,529 primarily related to five malls and undeveloped land. The Properties were classified for segment reporting purposes as listed below (see section below for information on outparcels). See Note 12 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Janesville Mall ⁽¹⁾

Janesville, WI

Malls

18,061

—

⁽²⁾

June/December

Cary Towne Center ⁽³⁾

Cary, NC

Malls

54,678

30,971

September

Vacant land ⁽⁴⁾

D'Iberville, MS

All Other

14,598

8,100

December

Acadiana Mall - Macy's & vacant land ⁽⁵⁾

Lafayette, LA

Malls/All Other

1,593

3,920

December

Eastland Mall ⁽⁶⁾

Bloomington, IL

Malls

36,525

26,450

December

Honey Creek Mall ⁽⁷⁾

Terre Haute, IN

Malls

48,640

16,400

December

Vacant land ⁽⁸⁾

Port Orange, FL

All Other

434

6,000

174,529

91,841

(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 for 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 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 matured on the date the IKEA contract terminated if that date was 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 holding period of ten years, a capitalization rate of 12.0% and a discount rate of 13%. In December 2018, the Company adjusted the book value of the property to the net sales price of $ 30,971 based on a signed contract with a third-party buyer. The property sold in January 2019. See Note 8 for information related to the mortgage loan.

(4)	In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of land to its estimated value of $ 8,100. The Company evaluated comparable land parcel transactions and determined that $ 8,100 was the land's estimated fair value.

(5)	The Company adjusted the book value of the anchor parcel and the vacant land to the net sales price of $ 3,920 in a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The property was sold in January 2019.

(6)

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 $ 26,450. The mall had experienced a deterioration in cash flows as a result of the downturn of the economy in its market area and four vacant anchors with no active prospects to replace these anchor stores. Management determined the fair value of Eastland Mall using a discounted cash flow methodology. The discount 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 15.0% and a discount rate of 17.0%.

(7)

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 $ 16,400. The mall had experienced a decline in cash flows due to store closures and rent reductions. Additionally, two anchors were vacant as of December 31, 2018, and a third anchor announced during the fourth quarter of 2018 that it would be closing during the first quarter of 2019. Management determined the fair value of Honey Creek 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 18.0% and a discount rate of 20.0%.

(8)	The Company adjusted the book value of the land contributed to a joint venture to its agreed upon fair value based on the joint venture agreement with its partner, Continental 425 Fund LLC. See Note 7 for more information.

Long-lived Assets Measured at Fair Value in 2017:

During the year ended December 31, 2017, the Company recognized impairments of real estate of $ 71,401 primarily related to two malls, a parcel project near an outlet center and one outparcel. The Properties were classified for segment reporting purposes as listed below (see section below for information on outparcels). See Note 12 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Vacant land ⁽¹⁾

Woodstock, GA

Malls

3,147

—

⁽²⁾

June

Acadiana Mall ⁽³⁾

Lafayette, LA

Malls

43,007

67,300

June / September

Prior period sales adjustments ⁽⁴⁾

Various

Malls/All Other

606

—

⁽²⁾

September

Hickory Point Mall ⁽⁵⁾

Forsyth, IL

Malls

24,525

14,050

71,285

81,350

(1)

The Company wrote down the book value of its interest in a consolidated joint venture that owned land adjacent to one of its outlet malls upon the divestiture of its interests to a fair value of $ 1,000. In conjunction with the divestiture and assignment of the Company's interests in this consolidated joint venture, the Company was relieved of its debt obligation by the joint venture partner.

(2)	The long-lived asset was not included in the Company's consolidated balance sheets at December 31, 2017 as the Company no longer had an interest in the property.

(3)

In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of the mall to its estimated fair value of $ 67,300. The mall had experienced declining tenant sales and cash flows as a result of the downturn of the economy in its market area and an anchor announced in the second quarter 2017 that it would close its store later in 2017. Management determined the fair value of Acadiana 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 15.5% and a discount rate of 15.75%.

(4)	Relates to true-ups of estimated expenses to actual expenses for properties sold in prior periods.

(5)

In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of the mall to its estimated fair value of $ 14,050. The mall had experienced decreased occupancy and cash flows as a result of the downturn of the economy in its market area. Management determined the fair value of Hickory Point 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 18.0% and a discount rate of 19.0%.

Guarantor Subsidiaries

Condensed Financial Statements Captions [Line Items]

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

The following table sets forth information regarding the Combined Guarantor Subsidiaries' assets that are measured at fair value on a nonrecurring basis and related impairment charges for the year ended December 31, 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

95,300

—

95,300

60,170

The following table sets forth information regarding the Combined Guarantor Subsidiaries' asset that is measured at fair value on a nonrecurring basis and related impairment charges for the year ended December 31, 2017:

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 asset

67,300

—

67,300

43,007

Schedule of Impairment on Real Estate Properties

During the year ended December 31, 2019, the Combined Guarantor Subsidiaries recognized an impairment of $ 60,170 related to two malls.

Impairment Date	Property	Location	Segment Classification	Loss on Impairment		Fair Value
March	Greenbrier Mall⁽¹⁾	Chesapeake, VA	Malls	$	22,770	$	56,300
December	Park Plaza Mall⁽²⁾	Little Rock, AR	Malls		37,400		39,000
				$	60,170	$	95,300

(1)

In accordance with the Combined Guarantor Subsidiaries' impairment process, the Combined Guarantor Subsidiaries wrote down the book value of the mall to its estimated fair value of $ 56,300. The mall has experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. 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)

In accordance with the Combined Guarantor Subsidiaries' impairment process, the Combined Guarantor Subsidiaries wrote down the book value of the mall to its estimated fair value of $ 39,000. The mall has experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Park Plaza 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 15.0% and a discount rate 14.0%.

During the year ended December 31, 2017, the Combined Guarantor Subsidiaries recognized an impairment of $ 43,007 related to one mall.

Impairment Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

June

Acadiana Mall⁽¹⁾

Lafayette, LA

Malls

43,007

67,300

(1)

In accordance with the Combined Guarantor Subsidiaries' impairment process, the Combined Guarantor Subsidiaries wrote down the book value of the mall to its estimated fair value of $ 67,300. The mall had experienced declining tenant sales and cash flows as a result of the downturn of the economy in its market area and an anchor announced in the second quarter of 2017 that it would close its store later in 2017. Management determined the fair value of Acadiana 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 15.5% and a discount rate 15.75%.