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Impairment Charges and Reserves | 3 Months Ended
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Mar. 31, 2017
Asset Impairment Charges [Abstract] |
Impairment Charges and Reserves |
10. | Impairment Charges and Reserves
The Company recorded impairment charges and reserves based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):
| Three Months |
| Ended March 31, |
| 2017 |  |  | 2016 |
Assets marketed for sale(A) | $ | 22.0 |  |  | $ | — |
Reserve of preferred equity interests(B) |  | 76.0 |  |  |  | — |
Total impairment charges | $ | 98.0 |  |  | $ | — |
(A) | Triggered by changes in asset hold-period assumptions and/or expected future cash flows.
(B) | In March 2017, the Company recorded an aggregate valuation allowance on its preferred equity interests in the BRE DDR Joint Ventures (Note 2).
Items Measured at Fair Value on a Non-Recurring Basis The Company is required to assess the fair value of certain impaired consolidated and unconsolidated joint venture investments. The valuation of impaired real estate assets and investments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset, as well as the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company considers multiple valuation techniques when measuring fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate. For operational real estate assets, the significant valuation assumptions included the capitalization rate used in the income capitalization valuation as well as the projected property net operating income. For projects under development or not at stabilization, the significant valuation assumptions included the discount rate, the timing and the estimated costs for the construction completion and project stabilization, projected net operating income and the exit capitalization rate. For the valuation of the preferred equity interests, the significant assumptions used in the discounted cash flow analysis included the discount rate, projected net operating income, the timing of the expected redemption and the exit capitalization rates. These valuations were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change. The following table presents information about the Company’s impairment charges on both financial and nonfinancial assets that were measured on a fair value basis for the three months ended March 31, 2017, and the year ended December 31, 2016. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions).
|  | Fair Value Measurements |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |  |  | Total Losses |
March 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used |  | $ | — |  |  | $ | — |  |  | $ | 14.8 |  |  | $ | 14.8 |  |  | $ | 22.0 |
Reserve of preferred equity interests |  |  | — |  |  |  | — |  |  |  | 319.3 |  |  |  | 319.3 |  |  |  | 76.0 |
December 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used |  |  | — |  |  |  | — |  |  |  | 438.2 |  |  |  | 438.2 |  |  |  | 110.9 |
The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value of non-recurring items (in millions, except price per square foot, which is in thousands):
|  | Quantitative Information about Level 3 Fair Value Measurements
|  | Fair Value at |  |  |  |  |  |  | Range
|  | March 31, |  |  | December 31, |  |  | Valuation |  | Unobservable |  |  |  |  |  |
Description |  | 2017 |  |  | 2016 |  |  | Technique |  | Inputs |  | 2017 |  |  | 2016
Impairment of consolidated assets |  | $ | — |  |  | $ | 13.4 |  |  | Indicative Bid(A)/ Contracted Price |  | Indicative Bid(A)/ Contracted Price |  | N/A |  |  | N/A
|  |  | — |  |  |  | 398.2 |  |  | Income Capitalization Approach(B)/ Sales Comparison Approach |  | Market Capitalization Rate |  | N/A |  |  | 7%–10%
|  |  |  |  |  |  |  |  |  |  |  | Price per Square Foot |  | N/A |  |  | $15–$31
|  |  | 14.8 |  |  |  | 26.6 |  |  | Indicative Bid(A) |  | Indicative Bid(A) |  | N/A |  |  | N/A
|  |  |  |  |  |  |  |  |  | Discounted Cash Flow |  | Discount Rate |  |  | 9% |  |  | 10%–11%
|  |  |  |  |  |  |  |  |  |  |  | Terminal Capitalization Rate |  |  | 10% |  |  | 10%–12%
Reserve of preferred equity interests |  |  | 319.3 |  |  |  | — |  |  | Discounted Cash Flow |  | Discount Rate |  | 8.3%–8.6% |  |  | N/A
|  |  |  |  |  |  |  |  |  |  |  | Terminal Capitalization Rate |  | 5.3%–10.3% |  |  | N/A
|  |  |  |  |  |  |  |  |  |  |  | NOI Growth Rate |  |  | 1% |  |  | N/A
(A) | Fair value measurements based upon indicative bids were developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness. The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values.
(B) | Vacant space in certain assets was valued based on a price per square foot.

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- Definition The entire disclosure for the details of the charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value. Disclosure may also include a description of the impaired asset and facts and circumstances leading to the impairment, amount of the impairment loss and where the loss is located in the income statement, method(s) for determining fair value, and the segment in which the impaired asset is reported. + References No definition available. + Details
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