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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2021
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 4. 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, approximate their 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 fair value of the Company’s fixed rate mortgage loan was estimated using available market information and discounted cash flow analyses based on borrowing rates the Company believes it could obtain with a similar term and maturity. As of September 30, 2021 and December 31, 2020, the fair value of the Company’s fixed rate mortgage loans payable, which were determined to be Level 3 within the valuation hierarchy, was $162.5 million and $47.0 million, respectively; the carrying value of such loan was $157.0 million and $45.4 million, respectively. As of September 30, 2021 and December 31, 2020, respectively, the aggregate fair values of the Company’s unsecured revolving credit facility and term loans approximated their carrying values. In addition, the fair value of the Company’s mortgage note receivable and finance lease obligation, which were determined to be Level 3 within the valuation hierarchy, approximated their carrying values as of September 30, 2021 and December 31, 2020, respectively. The valuations of the assets and 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 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, 2021, 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 use and real estate held for sale, which, if applicable, are measured on a nonrecurring basis, and 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, income capitalization analyses or a sales comparison approach if no contracts had been concluded. The discounted cash flow and income capitalization analyses include all estimated cash inflows and outflows over a specific holding period. These cash flows were composed 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 is utilized for certain land values and includes 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 believes to be within a reasonable range of current market rates for the respective properties. The following tables show the hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, respectively:
|  | September 30, 2021 |
Description |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Investments related to deferred |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
compensation liabilities (a) |  | $ | 906,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 906,000 |
Deferred compensation liabilities (b) |  | $ | 924,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 924,000 |
Interest rate swaps liability (b) |  | $ | — |  |  | $ | 11,830,000 |  |  | $ | — |  |  | $ | 11,830,000 |
|  | December 31, 2020 |
Description |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Investments related to deferred |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
compensation liabilities (a) |  | $ | 948,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 948,000 |
Deferred compensation liabilities (b) |  | $ | 952,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 952,000 |
Interest rate swaps liability (b) |  | $ | — |  |  | $ | 18,927,000 |  |  | $ | — |  |  | $ | 18,927,000 |
(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. |
In connection with the dual-track strategic alternatives process being pursued by the Company, it was determined that certain of the Company’s operating properties would be sold significantly prior to the end of their previously estimated hold periods. As of September 30, 2021, the Company tested the recoverability of real estate held for use and, as a result of the carrying amount of the assets not being deemed recoverable and exceeding their fair value as measured on an asset by asset basis, recorded $82.3 million in impairment charges. These charges are included in Impairment charges in the consolidated statement of operations. Such assets have an aggregate fair value of $247.4 million as of September 30, 2021. The fair value of the assets was determined to be Level 3 under the hierarchy and was measured at fair value on a nonrecurring basis using a direct capitalization approach, consisting of capitalization rates ranging from 6.0% to 8.8%, with a weighted average of 6.9%. As of September 30, 2021, real estate held for sale in the consolidated balance sheet consisted of one retail property, totaling $1.9 million, which was determined to be Level 3 assets under the hierarchy, and was measured at fair value less cost to sell on a nonrecurring basis using a direct capitalization approach, consisting of a capitalization rate of 9.1%. As of September 30, 2021, the Company recorded an impairment of $0.4 million, which is included in Impairment charges in the consolidated statement of operations.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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