Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Assets And Liabilities Measured On Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at September 30, 2012
Assets:
Investments in grantor trusts	$	16,480					$	16,480
Derivative instruments:
Interest rate contracts			$	10,852			10,852
Total	$	16,480	$	10,852	$	—	$	27,332
Liabilities:
Derivative instruments:
Interest rate contracts			$	827			$	827
Deferred compensation plan obligations	$	16,480					16,480
Total	$	16,480	$	827	$	—	$	17,307
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at December 31, 2011
Assets:
Investments in grantor trusts	$	14,693					$	14,693
Derivative instruments:
Interest rate contracts			$	10,816			10,816
Total	$	14,693	$	10,816	$	—	$	25,509
Liabilities:
Derivative instruments:
Interest rate contracts			$	674			$	674
Deferred compensation plan obligations	$	14,693					14,693
Total	$	14,693	$	674	$	—	$	15,367

Reconciliation Of Subordinate Tax Increment Revenue Bonds Using Significant Unobservable Inputs (Level 3)

A reconciliation of the outstanding balance of the subordinate tax increment revenue bonds using significant unobservable inputs (Level 3) is as follows (in thousands):



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Outstanding, January 1, 2011	$	10,700
Settlement of recalled bonds (1)	(10,700		)
Outstanding, December 31, 2011	$	—

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(1)	Settlement of recalled bonds represents the recall of previously issued subordinated tax increment revenue bonds that were available for sale and were replaced with held to maturity subordinated tax increment revenue bonds associated with the exchange transaction in April 2011.

Assets Measured On Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis at September 30, 2012, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Total Gains (Losses) (1)
Property (2)					$	13,906	$	13,906	$	(2,897	)
Property held for sale (3)			$	39,131	10,675		49,806		(4,801		)
Investment in real estate joint ventures and partnerships (4)			24,231				24,231		(6,608		)
Total	$	—	$	63,362	$	24,581	$	87,943	$	(14,306	)

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(1)	Total gains (losses) exclude impairments on disposed assets because they are no longer held by us.

(2)

In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount of $16.8 million was written down to a fair value of $13.9 million, resulting in a loss of $2.9 million, which was included in earnings for the nine month period. Management’s estimate of the fair value of these properties was determined using Level 3 inputs. See the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements table below.

(3)

Property held for sale with a carrying amount of $53.8 million was written down to a fair value of $49.8 million less costs to sell of $0.8 million, resulting in a loss of $4.8 million, which was included in discontinued operations in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine month period. Management’s estimate of the fair value of these properties was determined using bona fide purchase offers for the Level 2 inputs, and see the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements table below.

(4)

Our net investment in real estate joint ventures and partnerships with a carrying amount of $30.8 million was written down to a fair value of $24.2 million, resulting in a loss of $6.6 million, which was included in earnings for the nine month period. Management’s estimate of the fair value of this investment was determined using the weighted average of the bona fide purchase offers received for the Level 2 inputs.

Assets measured at fair value on a nonrecurring basis at December 31, 2011, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Total Gains (Losses) (1)
Property (2)			$	389	$	98,207	$	98,596	$	(36,907	)
Property held for sale (3)			43,657		1,500		45,157		(13,799		)
Investment in real estate joint ventures and partnerships (4)					6,311		6,311		(1,752		)
Subordinate tax increment revenue bonds (5)					26,723		26,723		(18,737		)
Total	$	—	$	44,046	$	132,741	$	176,787	$	(71,195	)

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(1)	Total gains (losses) are reflected throughout 2011 and exclude impairments on disposed assets because they are no longer held by us.

(2)

In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount of $135.5 million was written down to a fair value of $98.6 million, resulting in a loss of $36.9 million, which was included in earnings for the twelve month period. Management’s estimate of the fair value of these properties was determined using the expected sales price of an executed agreement for the Level 2 input and using third party broker valuations, bona fide purchase offers, cash flow models and discount rates ranging from 8% to 13% for the Level 3 inputs.

(3)

Property held for sale with a carrying amount of $57.0 million was written down to a fair value of $45.2 million less costs to sell of $2.0 million, resulting in a loss of $13.8 million, which was included in discontinued operations in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the twelve month period. Management’s estimate of the fair value of these properties was determined using the expected sales price of executed agreements for the Level 2 inputs and a cash flow model using a discount rate of 10% for the Level 3 input.

(4)

Our net investment in real estate joint ventures and partnerships with a carrying amount of $8.1 million was written down to a fair value of $6.3 million, resulting in a loss of $1.8 million, which was included in earnings for the twelve month period. Management’s estimate of the fair value of these investments was determined using the life and other terms of the investment, our partner’s financial condition, cash flow models and capitalization rates ranging from 7% to 9% for the Level 3 inputs.

(5)

A net credit loss on the exchange of bonds of $18.7 million was recognized upon the recall and replacement of our investment in tax increment revenue bonds by the Agency in April 2011. The exchange transaction resulted in us receiving approximately $16.5 million in cash proceeds and $57.7 million in new subordinated bonds replacing the face value of our $51.3 million of senior bonds and $22.4 million of subordinate bonds, which had been previously written down to a fair value of $10.7 million. The carrying value of the $57.7 million subordinated bonds received in the exchange were written down to their fair value of $26.7 million, of which a loss of $11.7 million was previously recognized in December 2010. The net credit loss resulted as management did not expect to recover the par value of the bonds based upon changes in terms of the bonds and future sales tax revenue projections of the development project through their maturity. Management’s estimates of the fair value of these investments were determined using third-party sales revenue projections, future growth rates ranging from 1% to 4% and inflation rates ranging from 1% to 2% for the Level 3 inputs.

Schedule Of Fair Value Of Notes Receivable From Real Estate Joint Ventures And Partnerships

Schedule of the fair value of our notes is as follows (in thousands):



	September 30, 2012		December 31, 2011
Carrying value	$	90,385	$	149,204
Fair value, using significant unobservable inputs (Level 3)	93,257		153,532

Schedule Of Fair Value Of Tax Increment Revenue Bonds

Schedule of the fair value of our tax increment revenue bonds is as follows (in thousands):



	September 30, 2012		December 31, 2011
Carrying value	$	26,505	$	26,505
Fair value, using significant unobservable inputs (Level 3)	26,505		26,505

Reconciliation Of The Credit Loss Recognized On Tax Increment Revenue Bonds

A reconciliation of the credit loss recognized on our tax increment revenue bonds at September 30, 2012 is as follows (in thousands):



	Credit Loss Recognized
Beginning balance, January 1, 2011	$	11,717
Additions	19,305
Ending balance, December 31, 2011	31,022
Additions	—
Ending Balance, September 30, 2012	$	31,022

Schedule Of Fair Value Of Debt

Schedule of the fair value of our debt is as follows (in thousands):



	September 30, 2012		December 31, 2011
Fixed-rate debt:
Carrying value	$	1,831,791	$	2,014,834
Fair value, using significant unobservable inputs (Level 3)	1,967,343		2,054,670
Variable-rate debt:
Carrying value	$	395,628	$	517,003
Fair value, using significant unobservable inputs (Level 3)	409,952		531,353

Quantitative Infromation About Level 3 Fair Value Measurements

The quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements as of September 30, 2012 reported in the above tables, is as follows:



Description	Fair Value at September 30, 2012		Valuation Technique	Unobservable Inputs	Range
Description	Fair Value at September 30, 2012		Valuation Technique	Unobservable Inputs	Minimum		Maximum
Property	$	13,906	Broker valuation estimate	Indicative bid (1)
			Bona fide purchase offers	Contract price (1)
			Discounted cash flows	Discount rate			10.0		%
				Capitalization rate	9.3	%	9.5		%
				Holding period (years)			1
				Expected future inflation rate (2)			3.0		%
				Market rent growth rate (2)			3.0		%
				Expense growth rate (2)			3.0		%
				Vacancy rate (2)			5.0		%
				Renewal rate (2)			75.0		%
				Average market rent rate (2)			$	10.52
				Average leasing cost per square foot (2)			$	16.50
Property held for sale	10,675		Broker valuation estimate	Indicative bid (1)
			Bona fide purchase offers	Contract price (1)
			Discounted cash flows	Discount rate			9.8		%
				Capitalization rate			10.5		%
				Holding period (years)			1
Notes receivable from real estate joint ventures and partnerships	93,257		Discounted cash flows	Discount rate			3.2		%
Tax increment revenue bonds	26,505		Discounted cash flows	Discount rate			7.5		%
				Expected future growth rate	1.0	%	4.0		%
				Expected future inflation rate	1.0	%	2.0		%
Fixed-rate debt	1,967,343		Discounted cash flows	Discount rate	1.2	%	6.0		%
Variable-rate debt	409,952		Discounted cash flows	Discount rate	1.4	%	5.0		%

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(1)	These fair values were developed by third parties, subject to our corroboration for reasonableness.


(2)	Only applies to one property valuation.

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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