Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of carrying value and estimated fair value of financial instruments

The following table presents the carrying value and estimated fair value of the Company’s financial instruments:



	June 30, 2018				December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Derivative asset	$	4,699	$	4,699	$	1,086	$	1,086
Financial liabilities:
Mortgages payable, net	$	274,267	$	279,680	$	287,068	$	298,635
Unsecured notes payable, net	$	696,055	$	670,042	$	695,748	$	693,823
Unsecured term loans, net	$	447,583	$	455,242	$	547,270	$	552,555
Unsecured revolving line of credit	$	126,000	$	126,000	$	216,000	$	216,222

Schedule of financial instruments measured at fair value on a recurring basis

The following table presents the Company’s financial instruments, which are measured at fair value on a recurring basis, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.



	Fair Value
	Level 1		Level 2		Level 3		Total
June 30, 2018
Derivative asset	$	—	$	4,699	$	—	$	4,699

December 31, 2017
Derivative asset	$	—	$	1,086	$	—	$	1,086

Schedule of assets measured at fair value on a nonrecurring basis

The Company did not remeasure any assets to fair value on a nonrecurring basis as of June 30, 2018. The following table presents the Company’s assets measured at fair value on a nonrecurring basis as of December 31, 2017, aggregated by the level within the fair value hierarchy in which those measurements fall. The table includes information related to properties remeasured to fair value as a result of impairment charges recorded during the year ended December 31, 2017, except for those properties sold prior to December 31, 2017. Methods and assumptions used to estimate the fair value of these assets are described after the table.



	Fair Value
	Level 1		Level 2			Level 3		Total		Provision for Impairment (a)
December 31, 2017
Investment properties	$	—	$	74,250	(b)	$	—	$	74,250	$	50,077


(a)	Excludes impairment charges recorded on investment properties sold prior to December 31, 2017.

(b)

Represents the fair value of the Company’s Schaumburg Towers and Home Depot Plaza investment properties. The estimated fair value of Schaumburg Towers was based on an expected sales price of $87,600 from a bona fide purchase offer, determined to be a Level 2 input, which contemplates historically deferred maintenance and capital requirements. The estimated fair value of $58,000 as of September 30, 2017, the date the asset was measured at fair value, reflects (i) capital expenditures expected to be incurred by the Company prior to sale and (ii) tenant-related costs expected to be credited to the buyer at close. The estimated fair value of Home Depot Plaza of $16,250 as of December 31, 2017, the date the asset was measured at fair value, was based upon the expected sales price for an executed sales contract and determined to be a Level 2 input.

Schedule of financial liabilities measured at fair value for disclosure purposes

The following table presents the Company’s financial liabilities, which are measured at fair value for disclosure purposes, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.



	Fair Value
	Level 1		Level 2		Level 3		Total
June 30, 2018
Mortgages payable, net	$	—	$	—	$	279,680	$	279,680
Unsecured notes payable, net	$	234,853	$	—	$	435,189	$	670,042
Unsecured term loans, net	$	—	$	—	$	455,242	$	455,242
Unsecured revolving line of credit	$	—	$	—	$	126,000	$	126,000

December 31, 2017
Mortgages payable, net	$	—	$	—	$	298,635	$	298,635
Unsecured notes payable, net	$	243,183	$	—	$	450,640	$	693,823
Unsecured term loans, net	$	—	$	—	$	552,555	$	552,555
Unsecured revolving line of credit	$	—	$	—	$	216,222	$	216,222