Fair Values of Financial Instruments

12 Months Ended

Dec. 31, 2021

Fair Values of Financial Instruments [Abstract]

Fair Value Disclosures [Text Block]

Fair Values of Financial Instruments

Fair value is defined as the price at which an asset or liability is exchanged between market participants in an orderly transaction at the reporting date. The Company’s cash equivalents, notes receivable, accounts receivable and payables and accrued expenses all approximate fair value due to their short term nature.

The following tables provide estimated fair values of the Company’s financial instruments. The carrying values of the Company's real estate loans include accrued interest receivable from additional interest and are presented net of deferred loan fee revenue, where applicable.

	As of December 31, 2021
	Carrying value				Fair value measurements using fair value hierarchy
(In thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans	$	213,458	$	219,923	$	—	$	—	$	219,923
Notes receivable and line of credit receivable	9,011		9,011		—		—		9,011
	$	222,469	$	228,934	$	—	$	—	$	228,934
Financial Liabilities:
Mortgage notes payable	$	2,382,652	2,414,774		$	—	$	—	$	2,414,774
Revolving credit facility	—		—		—		—		—
	$	2,382,652	$	2,414,774	$	—	$	—	$	2,414,774

	As of December 31, 2020
	Carrying value				Fair value measurements using fair value hierarchy
(In thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans	$	302,423	$	315,074	$	—	$	—	$	315,074
Notes receivable and line of credit receivable	10,874		10,874		—		—		10,874
	$	313,297	$	325,948	$	—	$	—	$	325,948
Financial Liabilities:
Mortgage notes payable	$	2,640,705	$	2,666,471	$	—	$	—	$	2,666,471
Revolving line of credit	22,000		22,000		—		—		22,000
	$	2,662,705	$	2,688,471	$	—	$	—	$	2,688,471

The fair value of the real estate loans within the level 3 hierarchy are comprised of estimates of the fair value of the notes, which were developed utilizing a discounted cash flow model over the remaining terms of the notes until their maturity dates and utilizing discount rates believed to approximate the market risk factor for notes of similar type and duration. The fair values also contain a separately-calculated estimate of any applicable additional interest payment due the Company at the maturity date

of the loan, based on the outstanding loan balances at December 31, 2021, discounted to the reporting date utilizing a discount rate believed to be appropriate for multifamily development projects. The fair values of the fixed rate mortgages on the Company’s properties were developed using market quotes of the fixed rate yield index and spread for 4, 5, 6, 7, 10, 15, 25 and 35 year notes as of the reporting date. The present values of the cash flows were calculated using the original interest rate in place on the fixed rate mortgages and again at the current market rate. The difference between the two results was applied as a fair market adjustment to the carrying value of the mortgages.