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Fair Value of Assets and Liabilities (Tables)
 3 Months Ended
Mar. 31, 2016
Fair Value of Assets and Liabilities  
Schedule fair value of assets and liabilities measurement on recurring basis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value at Reporting Date Using

 

 

 

 

 

Quoted Prices in

 

 

 

Significant

 

 

 

 

 

Active Markets for

 

Significant Other

 

Unobservable

 

 

 

 

 

Identical Assets

 

Observable Inputs

 

Inputs

Description

 

Total

 

(Level 1)

 

(Level 2)

 

(Level 3)

Recurring Fair Value Measurements:

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in RMR Inc. (1)

 

$
39,687

 

$
39,687

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap (2)

 

$
(2,094)

 

$

 —

 

$
(2,094)

 

$

 —

(1)

Our 1,586,836 shares of class A common stock of The RMR Group Inc., or RMR Inc., which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $42,686. The unrealized loss of $2,999 for these shares as of March 31, 2016 is included in cumulative other comprehensive loss in our condensed consolidated balance sheets. We evaluated the decline in the fair value of the RMR Inc. shares and determined that based on the severity and duration of the decline, and our ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, we do not consider the investment to be other-than-temporarily impaired at March 31, 2016.

 

(2)

As discussed in Note 5, we have an interest rate swap agreement on a $41,000 mortgage note. This interest rate swap agreement is carried at fair value and is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is valued using Level 2 inputs. The fair value of this instrument is determined using interest rate pricing models. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimate presented in the table above is not necessarily indicative of the amount for which we could be liable upon extinguishment of the liability.
Schedule of carrying value and the estimated fair market value of mortgage notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At March 31, 2016

 

At December 31, 2015

 

 

Carrying

 

Estimated

 

Carrying

 

Estimated

 

    

Amount (1)

    

Fair Value

    

Amount (1)

    

Fair Value

Senior unsecured notes, due 2018 at 2.85%

 

$
347,772

 

$
349,316

 

$
347,448

 

$
353,063

Senior unsecured notes, due 2020 at 3.60%

 

$
395,043

 

$
400,378

 

$
394,712

 

$
402,984

Senior unsecured notes, due 2022 at 4.15%

 

$
294,694

 

$
297,438

 

$
294,471

 

$
293,373

Senior unsecured notes, due 2025 at 4.50%

 

$
389,660

 

$
378,802

 

$
389,394

 

$
386,000

Mortgage notes payable

 

$
246,283

 

$
247,643

 

$
246,473

 

$
242,435

 

(1)

Includes unamortized debt issuance costs, premiums and discounts.