Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Recurring Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013, 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 June 30, 2014
Assets:
Investments, mutual funds held in a grantor trust	$	19,093					$	19,093
Investments, mutual funds	8,291						8,291
Derivative instruments:
Interest rate contracts			$	4,761			4,761
Total	$	27,384	$	4,761	$	—	$	32,145
Liabilities:
Derivative instruments:
Interest rate contracts			$	420			$	420
Deferred compensation plan obligations	$	19,093					19,093
Total	$	19,093	$	420	$	—	$	19,513



	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, 2013
Assets:
Investments, mutual funds held in a grantor trust	$	18,583					$	18,583
Investments, mutual funds and time deposit	8,408		$	50,034			58,442
Derivative instruments:
Interest rate contracts			5,282				5,282
Total	$	26,991	$	55,316	$	—	$	82,307
Liabilities:
Derivative instruments:
Interest rate contracts			$	476			$	476
Deferred compensation plan obligations	$	18,583					18,583
Total	$	18,583	$	476	$	—	$	19,059

Nonrecurring Fair Value Measurements

Property Impairments

Property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any identifiable intangible assets, site costs and capitalized interest, may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. If we conclude that an impairment may have occurred, estimated fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.

No assets were measured at fair value on a nonrecurring basis at June 30, 2014. Assets measured at fair value on a nonrecurring basis at December 31, 2013, 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⁾			$	3,300	$	8,576	$	11,876	$	(2,358	)
Total	$	—	$	3,300	$	8,576	$	11,876	$	(2,358	)

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(1)	Total gains (losses) are reflected throughout 2013 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 $14.3 million was written down to a fair value of $11.9 million, resulting in a loss of $2.4 million, which was included in earnings for the period. Management’s estimate of the fair value of these properties was determined using bona fide purchase offer for the Level 2 inputs. See the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements table below.

Fair Value Disclosures

Unless otherwise described below, short-term financial instruments and receivables are carried at amounts which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.

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



	June 30, 2014						December 31, 2013
	Carrying Value		Fair Value Using Significant Other Observable Inputs (Level 2)		Fair Value Using Significant Unobservable Inputs (Level 3)		Carrying Value		Fair Value Using Significant Unobservable Inputs (Level 3)
Notes receivable from real estate joint ventures and partnerships	$	2,652			$	2,887	$	13,330	$	13,549
Tax increment revenue bonds ⁽¹⁾	25,392				25,392		25,850		25,850
Investments, held to maturity ⁽²⁾	1,000		$	997
Debt:
Fixed-rate debt	1,809,524				1,872,191		2,136,265		2,150,891
Variable-rate debt	263,941				272,474		163,579		172,349

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(1)	At June 30, 2014 and December 31, 2013, the credit loss balance on our tax increment revenue bonds was $31.0 million.


(2)	Investments held to maturity are recorded at cost and have a gross unrealized loss of $3 thousand as of June 30, 2014.

The quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements as of June 30, 2014 and December 31, 2013 reported in the above tables, is as follows:



Description	Fair Value at					Unobservable Inputs	Range
	June 30, 2014		December 31, 2013				Minimum				Maximum
	(in thousands)				Valuation Technique		2014		2013		2014		2013
Property			$	8,576	Broker valuation estimate	Indicative bid
					Bona fide purchase offers	Contract price
Notes receivable from real estate joint ventures and partnerships	$	2,887	13,549		Discounted cash flows	Discount rate					2.3	%	2.7	%
Tax increment revenue bonds	25,392		25,850		Discounted cash flows	Discount rate					7.5	%	7.5	%
						Expected future growth rate	1.0	%	1.0	%	2.0	%	2.0	%
						Expected future inflation rate	1.0	%	1.0	%	2.0	%	2.0	%
Fixed-rate debt	1,872,191		2,150,891		Discounted cash flows	Discount rate	1.1	%	1.3	%	7.6	%	7.4	%
Variable-rate debt	272,474		172,349		Discounted cash flows	Discount rate	.8	%	.8	%	5.0	%	5.0	%

- 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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