XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Impairment Charges and Reserves | 9 Months Ended
--- | ---
Sep. 30, 2018
Asset Impairment Charges [Abstract] |
Impairment Charges and Reserves |
11. | 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 |  |  | Nine Months |
| Ended September 30, |  |  | Ended September 30, |
| 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Assets marketed for sale(A) | $ | 5.8 |  |  | $ | 8.5 |  |  | $ | 54.3 |  |  | $ | 49.5 |
Assets included in the spin-off of RVI(B) |  | 14.1 |  |  | — |  |  |  | 14.1 |  |  | — |
Undeveloped land | — |  |  |  | 1.8 |  |  | — |  |  |  | 10.9 |
Reserve (adjustment) of preferred equity interests(C) |  | 2.2 |  |  |  | (15.4 | ) |  |  | 4.5 |  |  |  | 60.6 |
Total impairment charges | $ | 22.1 |  |  | $ | (5.1 | ) |  | $ | 72.9 |  |  | $ | 121.0 |
(A) | The impairments recorded during the three and nine months ended September 30, 2018, primarily were triggered by indicative bids received and changes in market assumptions due to the disposition process. The impairments recorded during the three and nine months ended September 30, 2017, primarily were triggered by changes in asset hold-period assumptions and/or expected future cash flows.
(B) | Charge related to the spin-off of the RVI assets as a result of these assets being classified as held for sale on July 1, 2018, immediately prior to the spin-off.
(C) | As a result of an aggregate valuation allowance on its preferred equity interests in the BRE DDR Joint Ventures (Note 3).
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. For investments in unconsolidated joint ventures, the Company also considered the valuation of any underlying joint venture debt. These valuations were calculated based on market conditions and assumptions made by management at the time the valuation adjustments and impairments 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 nine months ended September 30, 2018. 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 |
September 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used |  | $ | — |  |  | $ | — |  |  | $ | 452.7 |  |  | $ | 452.7 |  |  | $ | 54.3 |
Assets included in the spin-off of RVI (A) |  |  | — |  |  |  | — |  |  |  | 624.6 |  |  |  | 624.6 |  |  |  | 14.1 |
Preferred equity interests |  |  | — |  |  |  | — |  |  |  | 199.3 |  |  |  | 199.3 |  |  |  | 4.5 |
| (A) | Fair value of assets held for sale is equal to fair market value less estimated costs to sell.
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):
|  | Quantitative Information about Level 3 Fair Value Measurements |
|  | Fair Value at |  |  |  |  |  |  | Range |
Description |  | September 30, 2018 |  |  | Valuation Technique |  | Unobservable Inputs |  | 2018 |
Impairment of consolidated assets |  | $ | 351.2 |  |  | Indicative Bid(A) |  | Indicative Bid(A) |  | N/A |
|  |  | 694.1 |  |  | Income Capitalization Approach |  | Market Capitalization Rate |  | 7.4% - 9.3% |
|  |  | 32.0 |  |  | Discounted Cash Flow |  | Discount Rate |  | 9.5% |
|  |  |  |  |  |  |  | Terminal Capitalization Rate |  | 10.5% |
Reserve of preferred equity interests |  |  | 199.3 |  |  | Discounted Cash Flow |  | Discount Rate |  | 8.2% - 8.9% |
|  |  |  |  |  |  |  | Terminal Capitalization Rate |  | 7.7% - 8.5% |
|  |  |  |  |  |  |  | NOI Growth Rate |  | 1% |
(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.

X
- References No definition available. + Details
Name: | us-gaap_AssetImpairmentChargesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_AssetImpairmentChargesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration