Fair Value of Assets and Liabilities

12 Months Ended

Dec. 31, 2020

As of December 31, 2020 and 2019, we do not have any assets or liabilities measured at fair value.

Properties Held and Used

As part of our office repositioning strategy adopted by our Board of Trustees, and pursuant to our accounting policy, in 2018, we evaluated the recoverability of the carrying values of each of the real estate assets that comprised our portfolio and determined that due to the shortening of the expected periods of ownership as a result of the office repositioning strategy and current estimates of market value less estimated costs to sell, it was necessary to reduce the net book value of a portion of the real estate assets in our portfolio to their estimated fair values. We anticipated the potential disposition of certain properties prior to the end of their remaining useful lives. As a result, in the first quarter of 2018, we recorded an impairment charge related to 777 East Eisenhower Parkway and 97 Newberry Road of $12.1 million in accordance with our impairment analysis procedures. We determined this impairment based on independent third party broker information, which are level 3 inputs according to the fair value hierarchy established in ASC 820. We reduced the aggregate carrying value of these properties from $41.8 million to their estimated fair value less estimated costs to sell of $29.7 million. These properties were sold in 2018 (see Note 3 for additional information). We evaluated each of our properties and determined there were no additional valuation adjustments necessary at December 31, 2020 or 2019.

Financial Instruments

In addition to the assets described in the above table, our financial instruments include our cash and cash equivalents, restricted cash and mortgage note payable. At December 31, 2020 and 2019, the fair value of these additional financial instruments were not materially different from their carrying values, except as follows (in thousands):


	December 31, 2020				December 31, 2019
	Principal Balance		Fair Value		Principal Balance		Fair Value
Mortgage note payable	$	—	$	—	$	25,433	$	26,071

The fair value of our mortgage note payable was based on estimates using discounted cash flow analyses and currently prevailing interest rates adjusted by credit risk spreads (level 3 inputs).

Other financial instruments that potentially subject us to concentrations of credit risk consist principally of rents receivable. As of December 31, 2020, no single tenant of ours is responsible for more than 10% of our consolidated revenues.