Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

We disclose fair value information about all financial instruments, whether or not recognized in the condensed consolidated balance sheets, for which it is practicable to estimate fair value. Current accounting guidance requires the Company to disclose fair value information about all financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value.

The Company’s disclosures of estimated fair value of financial instruments at March 31, 2019 and December 31, 2018 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

The carrying amounts for cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and other accrued liabilities, accrued dividends and distributions, security deposits and prepaid rents approximate fair value because of the short-term nature of these instruments. As described in Note 15 "Derivative Instruments", the interest rate swaps are recorded at fair value.

We calculate the fair value of our secured debt, unsecured term loan and unsecured senior notes based on currently available market rates assuming the loans are outstanding through maturity and considering the collateral and other loan terms. In determining the current market rate for fixed rate debt, a market spread is added to the quoted yields on federal government treasury securities with similar maturity dates to our debt. The carrying value of our global revolving credit facilities approximate fair value, due to the variability of interest rates.

As of March 31, 2019 and December 31, 2018, the aggregate estimated fair value and carrying value of our global revolving credit facility, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):



	Categorization under the fair value hierarchy	As of March 31, 2019				As of December 31, 2018
	Categorization under the fair value hierarchy	Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value
Global revolving credit facility ⁽¹⁾⁽⁵⁾	Level 2	$	857,211	$	857,211	$	1,663,156	$	1,663,156
Unsecured term loans ⁽²⁾⁽⁶⁾	Level 2	811,654		811,654		1,183,121		1,183,121
Unsecured senior notes ^(3)(4)(7)	Level 2	8,879,673		8,569,195		7,684,368		7,629,679
Secured debt ⁽³⁾⁽⁸⁾	Level 2	105,769		105,745		706,086		705,924
		$	10,654,307	$	10,343,805	$	11,236,731	$	11,181,880


(1)	The carrying value of our global revolving credit facilities approximate estimated fair value, due to the variability of interest rates and the stability of our credit ratings.


(2)	The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(3)

Valuations for our unsecured senior notes and secured debt are determined based on the expected future payments discounted at risk-adjusted rates. The 2019 Notes, 3.400% 2020 Notes, 2021 Notes, 3.950% 2022 Notes, 3.625% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.750% 2025 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 2029 Notes and 2030 Notes are valued based on quoted market prices.


(4)	The carrying value of the 3.400% 2020 Notes, 2021 Notes, 3.625% 2022 Notes, 3.950% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 2029 Notes and 2030 Notes are net of discount of $11.5 million and $19.9 million in the aggregate as of March 31, 2019 and December 31, 2018, respectively.


(5)	The estimated fair value and carrying value are exclusive of deferred financing costs of $14.2 million and $15.4 million as of March 31, 2019 and December 31, 2018, respectively.


(6)	The estimated fair value and carrying value are exclusive of deferred financing costs of $3.9 million and $4.2 million as of March 31, 2019 and December 31, 2018, respectively.


(7)	The estimated fair value and carrying value are exclusive of deferred financing costs of $45.7 million and $40.6 million as of March 31, 2019 and December 31, 2018, respectively.


(8)	The estimated fair value and carrying value are exclusive of deferred financing costs of $0.3 million and $20.2 million as of March 31, 2019 and December 31, 2018, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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