Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Measurements:

The Company had 14 real estate investment properties that were carried at fair value as of December 31, 2015, as a result of writing down the book values of these properties to their estimated fair values based on estimated discounted cash flows and residual values during 2015. Additionally, the Company had six investment properties that were classified as assets held for sale and carried at fair value as of December 31, 2015, based on estimated sales price less costs to sell. The Level 3 unobservable inputs used in determining the fair value of the real estate properties include, but are not limited to, appraisal information from an independent appraisal firm affiliated with the independent investment banking firm engaged as our valuation advisor, comparable sales transactions and other information from brokers and potential buyers, as applicable. The Company did not have any real estate investment properties that were carried at fair value as of December 31, 2016.

The Company’s derivative instrument is valued primarily based on inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, volatilities, and credit risks) and is classified as Level 2 in the fair value hierarchy. The valuation of derivative instrument also includes a credit value adjustment which is a Level 3 input. However, the impact of the assumption is not significant to its overall valuation calculation, and therefore the Company considers its derivative instrument to be classified as Level 2. The fair value of such derivative instrument is included in other liabilities in the accompanying consolidated balance sheets.

The following tables show the Company’s financial assets and liabilities carried at fair value as of December 31, 2016 and 2015, as follows (in thousands):



	Fair Value Measurement as of December 31, 2016		Level 1		Level 2		Level 3
Liabilities:
Derivative instrument	$	416	$	—	$	416	$	—



	Fair Value Measurement as of December 31, 2015		Level 1		Level 2		Level 3
Assets:
Real estate investment properties, net	$	184,061	$	—	$	—	$	184,061
Assets held for sale, net	40,588		—		—		40,588
	224,649		—		—		224,649
Liabilities:
Derivative instrument	$	618	$	—	$	618	$	—