Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.22.2.2
Fair Value Measurements
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company did not have any transfers within the fair value hierarchy during the periods presented. The Company’s Level 3 inputs are model-derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information. In evaluating the fair value information, judgment is required to interpret the market data used to develop the estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates.
The carrying amounts of cash and cash equivalents, restricted cash, tenant and other receivables, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities reasonably approximates fair value, in management’s judgment, because of their short-term nature.
Fair Value Measurements of Financial Instruments
The following table displays the carrying values and fair values of the Company’s financial instruments:
Successor
Predecessor
September 30, 2022 December 31, 2021
Carrying Value Fair Value Carrying Value Fair Value
Financial assets:
Interest rate derivative assets1, 2
Level 2 $ 116,797  $ 116,797  $ —  $ — 
Financial liabilities:
Interest rate derivative liability2, 3
Level 2 $ 47,804  $ 47,804  $ —  $ — 
Debt, net4
Level 3 $ 3,751,039  $ 3,774,620  $ 32,000  $ 32,000 
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1 Included within Prepaid expenses and other assets on the Consolidated Balance Sheets.
2 The fair value of the Company’s derivatives were determined by management, based on valuation information prepared by an independent third party. This model incorporates credit risk and changes in credit risk to determine a credit valuation adjustment. This model is based on the applicable forward SOFR curve as a reflection of the market’s current expectation of payments discounted at market factors.
3 Included within Accounts payable, accrued expenses and other liabilities on the Consolidated Balance Sheets.
4 The carrying values of the debt are shown net of deferred financing costs of $44,891 and $— as of September 30, 2022 and December 31, 2021, respectively. The Company estimates the fair value of its debt, net by discounting the future cash flows using rates and borrowing spreads currently available to the Company.
Fair Value Measurements on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis generally consist of real estate acquired, investments in unconsolidated joint ventures, and assets the Company expects to sell that were subject to impairment charges in connection with the Company’s change of intent to sell the investments and through its recoverability analysis. See Note 2 — Summary of Significant Accounting Policies for more information regarding the fair value measurement of the assets acquired and liabilities assumed in connection with the Merger. The Company estimates fair value based on expected sales prices in the market (Level 2) or by applying the income approach methodology using a discounted cash flow analysis (Level 3). During the periods presented, the Company did not record any impairment losses.