Disclosure About Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

Disclosure About Fair Value of Financial Instruments

Disclosure About Fair Value of Financial Instruments

The following summarizes the levels of inputs that we use to measure fair value.

Level 1.  Quoted prices in active markets for identical assets or liabilities.

Our Level 1 asset is our investment in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company’s Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Our Level 2 assets include the fair value of our mortgages and notes receivable. Our Level 2 liabilities include the fair value of our mortgages and notes payable and any interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach, which uses contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of any interest rate swaps is determined using the market standard

methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments are considered in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our Level 3 assets include any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or the terms of definitive sales contracts. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.

The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed at fair value within the fair value hierarchy:

			Level 1		Level 2		Level 3
	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Fair Value as of September 30, 2025:
Assets:
Mortgages and notes receivable, at fair value (1)	$	6,211	$	—	$	6,211	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	1,682		1,682		—		—
Impaired real estate assets	19,600		—		—		19,600
Total Assets	$	27,493	$	1,682	$	6,211	$	19,600
Noncontrolling Interests in the Operating Partnership	$	65,042	$	65,042	$	—	$	—
Liabilities:
Mortgages and notes payable, net, at fair value (1)	$	3,307,978	$	—	$	3,307,978	$	—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	1,682		1,682		—		—
Total Liabilities	$	3,309,660	$	1,682	$	3,307,978	$	—

Fair Value as of December 31, 2024:
Assets:
Mortgages and notes receivable, at fair value (1)	$	11,064	$	—	$	11,064	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	2,295		2,295		—		—
Impaired real estate assets	26,740		—		—		26,740
Total Assets	$	40,099	$	2,295	$	11,064	$	26,740
Noncontrolling Interests in the Operating Partnership	$	65,791	$	65,791	$	—	$	—
Liabilities:
Mortgages and notes payable, net, at fair value (1)	$	3,097,323	$	—	$	3,097,323	$	—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	2,295		2,295		—		—
Total Liabilities	$	3,099,618	$	2,295	$	3,097,323	$	—

__________

(1)    Amounts are not recorded at fair value on our Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.

The Level 3 impaired real estate assets measured at a fair value of $19.6 million in the third quarter of 2025 consisted of two non-core, out-of-service assets at Century Center in Atlanta.

For one of the Century Center assets, the impairment resulted from a change in our assumptions about the use of the asset. During the third quarter of 2025, we determined that the highest and best use of this asset is residential and that the existing out-of-service office building will ultimately be demolished, either by us or an eventual buyer of the site. We estimated the fair value of this asset by using the sales comparison method, net of estimated demolition costs from construction bids received, as observable inputs were not available.

For the other Century Center asset, the impairment resulted from a decrease in our estimate of fair value based on the market approach, as observable inputs were not available.