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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2014
Fair Value Measurements [Abstract] |
Fair Value Measurements | Note 5. Fair Value Measurements The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, certain other assets, accounts payable and accrued liabilities, and variable-rate debt approximate fair value due to their terms and/or short-term nature. The fair value of the Company’s investments and liabilities related to share-based compensation were determined to be Level 1 within the valuation hierarchy, and were based on independent values provided by financial institutions. The valuation of the liabilities for the Company’s interest rate swaps, which are measured on a recurring basis, were determined to be Level 2 within the valuation hierarchy, and were based on independent values provided by financial institutions. Such valuations were determined using widely accepted valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. The analyses reflect the contractual terms of the swaps, including the period to maturity, and user-observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded that, as of September 30, 2014, the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”. Nonfinancial assets and liabilities measured at fair value in the consolidated financial statements consist of real estate held for sale/conveyance, which are measured on a nonrecurring basis, have been determined to be (1) Level 2 within the valuation hierarchy, where applicable, based on the respective contracts of sale, adjusted for closing costs and expenses, or (2) Level 3 within the valuation hierarchy, where applicable, based on estimated sales prices, adjusted for closing costs and expenses, determined by discounted cash flow analyses, direct capitalization analyses or a sales comparison approach if no contracts had been concluded. The discounted cash flow and direct capitalization analyses include all estimated cash inflows and outflows over a specific holding period and, where applicable, any estimated debt premiums. These cash flows were comprised of unobservable inputs which included forecasted rental revenues and expenses based upon existing in-place leases, market conditions and expectations for growth. Capitalization rates and discount rates utilized in these analyses were based upon observable rates that the Company believed to be within a reasonable range of current market rates for the respective properties. The sales comparison approach was utilized for certain land values and include comparable sales that were completed in the selected market areas. The comparable sales utilized in these analyses were based upon observable per acre rates that the Company believed to be within a reasonable range of current market rates for the respective properties. Valuations were prepared using internally-developed valuation models. These valuations are reviewed and approved, during each reporting period, by a diverse group of management, as deemed necessary, including personnel from the acquisition, accounting, finance, operations, development and leasing departments, and the valuations are updated as appropriate. In addition, the Company may engage third party valuation experts to assist with the preparation of certain of its valuations. The following tables show the hierarchy for those assets measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, respectively:
|  | Assets/Liabilities Measured at Fair Value on a
|  | Recurring Basis
|  | September 30, 2014
Description |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Investments related to share- |  |  |  |  |  |  |  |
based compensation liabilities (a) | $ | 460,000 | $ | - | $ | - | $ | 460,000
Share-based compensation liabilities (b) | $ | 455,000 | $ | - | $ | - | $ | 455,000
Interest rate swaps liability (b) | $ | - | $ | 933,000 | $ | - | $ | 933,000
|  | December 31, 2013
Description |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Investments related to share- |  |  |  |  |  |  |  |
based compensation liabilities (a) | $ | 435,000 | $ | - | $ | - | $ | 435,000
Share-based compensation liabilities (b) | $ | 426,000 | $ | - | $ | - | $ | 426,000
Interest rate swaps liability (b) | $ | - | $ | 647,000 | $ | - | $ | 647,000
(a) Included in other assets and deferred charges, net in the accompanying consolidated balance sheets.
(b) Included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.
The fair value of the Company’s fixed rate mortgage loans were estimated using available market information and discounted cash flows analyses based on borrowing rates the Company believes it could obtain with similar terms and maturities. As of September 30, 2014 and December 31, 2013, the aggregate fair values of the Company’s fixed rate mortgage loans payable and mortgage loans payable – real estate held for sale/conveyance, which were determined to be Level 3 within the valuation hierarchy, were approximately $426.3 million and $495.1 million, respectively; the carrying values of such loans were $405.2 million and $481.1 million, respectively. The following tables show the hierarchy for those assets measured at fair value on a non-recurring basis as of September 30, 2014 and December 31, 2013, respectively:
|  | Assets Measured at Fair Value on a
|  | Non-Recurring Basis
|  | September 30, 2014
Description |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Real estate held for sale/conveyance | $ | - | $ | 17,709,000 | $ | 26,047,000 | $ | 43,756,000
|  | December 31, 2013
Description |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Real estate held for sale/conveyance | $ | - | $ | - | $ | 81,854,000 | $ | 81,854,000
The following table details the quantitative information regarding Level 3 assets measured at fair value on a non-recurring basis as of September 30, 2014:
Quantitative Information about Level 3 Fair Value Measurements
|  | Fair value at |  | Valuation |  | Unobservable |  | Range
Description |  | September 30, 2014 |  | Technique |  | inputs |  | (weighted average)
Real estate held for sale/conveyance: |  |  |  |  |  |  |  |
Operating retail real estate |  |  |  |  |  |  |  |
(two properties) |  | $ 22,854,000 |  | Discounted cash flow |  | Capitalization rates |  | 7.3% to 8.5% (7.9%)
|  |  |  |  |  | Discount rates |  | 7.8% to 9.0% (8.5%)
Single tenant property |  | 1,492,000 |  | Direct capitalization |  | Capitalization rate |  | 14.0%
Land (four parcels) |  | 1,701,000 |  | Sales comparison approach |  | Price per acre |  | $23,000 to $138,000 per acre
|  |  |  |  |  |  |  | ($40,000 per acre)
|  | $ 26,047,000 |  |  |  |  |  |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19190-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 + Details
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