Fair Value Measurements

9 Months Ended

Sep. 30, 2023

13.

Fair Value Measurements

Financial Assets Measured at Fair Value

The following table summarizes the fair value of our financial assets that are measured at fair value on our consolidated balance sheets as of the dates set forth below, based on their levels in the fair value hierarchy.


	As of September 30, 2023
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Real estate related fund investments	$	68,225	$	-	$	-	$	68,225
Interest rate swap assets (included in "other assets")		20,865		-		20,865		-
Interest rate cap assets (included in "other assets")		2,776		-		2,776		-
Total assets	$	91,866	$	-	$	23,641	$	68,225


	As of December 31, 2022
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Real estate related fund investments	$	105,369	$	-	$	-	$	105,369
Interest rate swap assets (included in "other assets")		32,681		-		32,681		-
Interest rate cap assets (included in "other assets")		6,123		-		6,123		-
Total assets	$	144,173	$	-	$	38,804	$	105,369

Real Estate Related Fund Investments

As of September 30, 2023, real estate related fund investments were comprised of investments in two mezzanine loans made by Fund X. These investments are measured at fair value on our consolidated balance sheet and are classified as Level 3. The primary unobservable input used in determining the fair value of one mezzanine loan is the credit spread over the base rate, which was 10.00% as of September 30, 2023. A significant increase or decrease in the credit spread would result in a significantly lower or higher fair value, respectively. The fair value of the other mezzanine loan investment is based on a negotiated transaction price.

The table below summarizes the changes in the fair value of real estate related fund investments that are classified as Level 3 for the three and nine months ended September 30, 2023.


	For the Three Months Ended		For the Nine Months Ended
(Amounts in thousands)	September 30, 2023		September 30, 2023
Beginning balance	$	66,606	$	105,369
Additional investments		1,591		9,631
Net realized losses		-		(1,224	)
Net unrealized gains (losses)		28		(45,551	)	(1)
Ending balance	$	68,225	$	68,225

(1)

Primarily represents an unrealized loss on a mezzanine loan investment based on a negotiated transaction price.

Financial Liabilities Not Measured at Fair Value

Financial liabilities not measured at fair value on our consolidated balance sheets consist of notes and mortgages payable, and the revolving credit facility. The following table summarizes the carrying amounts and fair value of these financial instruments as of the dates set forth below.


	As of September 30, 2023				As of December 31, 2022
(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Notes and mortgages payable	$	3,817,050	$	3,442,036	$	3,858,000	$	3,566,096
Revolving credit facility		-		-		-		-
Total liabilities	$	3,817,050	$	3,442,036	$	3,858,000	$	3,566,096

- 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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