Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

11.Fair Value Measurements

(a)Disclosure of Fair Value of Financial Instruments

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except those instruments listed below:

	December 31,
	2024				2023
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Notes receivable	$	31,790		31,755	$	2,109		2,109
Financial liabilities:
Notes payable, net	$	4,343,700		4,141,096	$	4,001,949		3,763,152
Unsecured credit facilities (1)	$	65,000		65,000	$	152,000		152,000

(1)The carrying amounts approximated its fair values due to the variable nature of the terms.

The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of December 31, 2024 and 2023, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.

(b)Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis:

Securities

The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment (income) loss in the accompanying Consolidated Statements of Operations, and include unrealized gains of $4.5 million for the year ended December 31, 2024, unrealized gains of $4.2 million for the year ended December 31, 2023 and unrealized losses of $8.0 million for the year ended December 31, 2022.

Available-for-Sale Debt Securities

Available-for-sale debt securities consist of investments in corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.

Interest Rate Derivatives

The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:

	Fair Value Measurements as of December 31, 2024
(in thousands)	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities	$	39,419			39,419		—			—
Available-for-sale debt securities		12,401			—		12,401			—
Interest rate derivatives		12,781			—		12,781			—
Total	$	64,601			39,419		25,182			—
Liabilities:
Interest rate derivatives	$	(423	)		—		(423	)		—

	Fair Value Measurements as of December 31, 2023
(in thousands)	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities	$	37,039			37,039		—			—
Available-for-sale debt securities		14,953			—		14,953			—
Interest rate derivatives		14,213			—		14,213			—
Total	$	66,205			37,039		29,166			—
Liabilities:
Interest rate derivatives	$	(1,335	)		—		(1,335	)		—

The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a non-recurring basis:

	Fair Value Measurements as of December 31, 2024
(in thousands)	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Real estate assets	$	10,915		—		10,915		—		(12,974	)

During the year ended December 31, 2024, the Company recorded a $14.3 million Provision for impairment on two operating properties. One property was sold within the reporting period with a $1.3 million provision for impairment. The second property is classified as held and used, and was impaired as a result of management's change in expected hold period and the carrying value exceeded the estimated fair value. The estimated fair value was based on letters of intent from third-party offers for the property and is reflected in the table above within the Level 2 fair value hierarchy.

During the year ended December 31, 2023, there were no real estate assets measured at fair value on a nonrecurring basis.