16.

Fair Value Disclosure of Financial Instruments:

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s estimation, based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are disclosed. The valuation method used to estimate fair value for fixed-rate and variable-rate debt is based on discounted cash flow analyses, with assumptions that include credit spreads, market yield curves, trading activity, loan amounts and debt maturities. The fair values for marketable securities are based on published values, securities dealers’ estimated market values or comparable market sales. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels

and

of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level

of the hierarchy).

The following are financial instruments for which the Company’s estimate of fair value differs from the carrying amounts (in thousands):

	December 31,
	201 6				201 5
	Carrying Amounts		Estimated Fair Value		Carrying Amounts		Estimated Fair Value

Marketable securities (1)	$	8,101	$	8,101	$	7,565	$	7,564
Notes payable (2)	$	3,927,251	$	3,890,797	$	3,761,328	$	3,820,205
Mortgages payable (3)	$	1,139,117	$	1,141,047	$	1,614,982	$	1,629,760

(1)

As of

December

31,

2016

and

2015,

the Company determined that

$6.5

million and

$5.9

million, respectively, of the Marketable securities estimated fair value were classified within Level

of the fair value hierarchy and the remaining

$1.6

million and

$1.7

million, respectively, were classified within Level

of the fair value hierarchy.

(2)

The Company determined that its valuation of the Senior Unsecured Notes and MTNs were classified within Level

of the fair value hierarchy and the Term Loan and Credit Facility were classified within Level

of the fair value hierarchy.

(3)

The Company determined that its valuation of these Mortgages payable was classified within Level

of the fair value hierarchy.

The Company has certain financial instruments that must be measured under the FASB’s Fair Value Measurements and Disclosures guidance, including available for sale securities. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The Company from time to time has used interest rate swaps to manage its interest rate risk. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Based on these inputs, the Company has determined that interest rate swap valuations are classified within Level

of the fair value hierarchy.

The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of

December

31,

2016

and

2015,

aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

	Balance at December 31, 201 6		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	6,502	$	6,502	$	-	$	-
Liabilities:
Interest rate swaps	$	975	$	-	$	975	$	-

	Balance at December 31, 201 5		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	5,909	$	5,909	$	-	$	-
Liabilities:
Interest rate swaps	$	1,426	$	-	$	1,426	$	-

Assets measured at fair value on a non-recurring basis at

December

31,

2016

and

2015

are as follows (in thousands):

	Balance at December 31, 201 6		Level 1		Level 2		Level 3

Real estate	$	117,930	$	-	$	-	$	117,930

	Balance at December 31, 201 5		Level 1		Level 2		Level 3

Real estate	$	52,439	$	-	$	-	$	52,439

During the year ended

December

31,

2016,

the Company recognized impairment charges related solely to adjustments to property carrying values of

$93.3

million. The Company’s estimated fair values were primarily based upon estimated sales prices from

third

party offers that were based on signed contracts, appraisals or letters of intent for which the Company does not have access to the unobservable inputs used to determine these estimated fair values. For the appraisals, the capitalization rates primarily range from

7.75%

9.00%

and discount rates primarily range from

9.25%

12.17%

which were utilized in the models based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for each respective investment. Based on these inputs the Company determined that its valuation of these investments was classified within Level

of the fair value hierarchy.

During the year ended

December

31,

2015,

the Company recognized impairment charges of

$45.5

million, of which

$0.1

million, before noncontrolling interests and income taxes, is included in discontinued operations. These impairment charges consist of (i)

$20.2

million related to adjustments to property carrying values, (ii)

$10.2

million related to the sale of operating properties, (iii)

$9.0

million related to a cost method investment, (iv)

$5.3

million related to certain investments in other real estate investments and (v)

$0.8

million related to marketable debt securities investments.

The Company’s estimated fair values for the year ended

December

31,

2015,

as it relates to property carrying values were primarily based upon (i) estimated sales prices from

third

party offers based on signed contracts or letters of intent (this method was used to determine

$5.7

million of the

$20.2

million in impairments recognized during the year ended

December

31,

2015),

for which the Company does not have access to the unobservable inputs used to determine these estimated fair values, (ii)

third

party appraisals (this method was used to determine

$8.9

million of the

$20.2

million in impairments recognized during the year ended

December

31,

2015)

and (iii) discounted cash flow models (this method was used to determine

$5.6

million of the

$20.2

million in impairments recognized during the year ended

December

31,

2015).

The discounted cash flow models include all estimated cash inflows and outflows over a specified holding period. These cash flows were comprised of unobservable inputs which include forecasted revenues and expenses based upon market conditions and expectations for growth. The capitalization rates primarily ranging from

8.25%

8.5%

and discount rates primarily ranging from

9.25%

9.75%

which were utilized in the models were based upon observable rates that the Company believes to be within a reasonable range of current market rates for each respective investment.

Based on these inputs the Company determined that its valuation of these investments was classified within Level

of the fair value hierarchy. The property carrying value impairment charges resulted from the Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions.