v3.25.1
Fair Value
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Includes other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions.
The following table presents the carrying value and approximate fair value of financial instruments at March 31, 2025 and December 31, 2024 (in thousands):
At March 31, 2025At December 31, 2024
Carrying ValueFair ValueCarrying ValueFair Value
Investments(1)
$5,258 $5,258 $5,000 $5,000 
Investments as cash equivalents(2)
$17,997 $17,987 $45,714 $45,714 
Notes due 2026(3)
$289,499 $285,015 $297,865 $289,077 
Construction loan(4)
$22,800 $29,241 $22,800 $28,245 
Notes receivable(5)
$16,786 $16,786 $16,786 $16,786 
(1)At March 31, 2025 and December 31, 2024 , investments consisting of short-term certificates of deposit with an original maturity at the time of purchase of greater than 90 days and less than one year are classified as held-to-maturity, stated at cost which approximates fair value using Level 2 inputs.
(2)Investments as cash equivalents include investments of obligations of the U.S. government with an original maturity at the time of purchase of 90 days or less are classified as held-to-maturity, stated at amortized cost and valued using Level 1 inputs. Investments as cash equivalents also include investments in a money market fund that invests 100% in U.S. government securities, which is stated at cost and valued using level 1 inputs.
(3)The fair value is determined based upon Level 2 inputs as the Notes due 2026 were not traded in an active market.
(4)The construction loan receivable is categorized as Level 3 and was valued using a yield analysis, which is typically performed for non-credit impaired loans. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. At each of March 31, 2025 and December 31, 2024, the expected market yield used to determine fair value was 16.25%. Changes in market yields may change the fair value of the construction loan. Generally, an increase in market yields may result in a decrease in the fair value of the construction loan. Due to the inherent uncertainty of determining the fair value of a loan that does not have a readily available market value, the fair value of the construction loan may fluctuate from period to period. Additionally, the fair value of the construction loan may differ significantly from the value that would have been used had a readily available market existed for such loan and may differ materially from the value that the Company may ultimately realize.
(5)Notes receivable relate to certain acquisitions of real estate which did not satisfy the requirements for sale-leaseback accounting (see Note 2 “Acquisition of Real Estate Properties” to our condensed consolidated financial statements for more information). The notes receivable are categorized as Level 3 and were also valued using a yield analysis. At March 31, 2025 and December 31, 2024, the weighted average expected market yields used to determine fair values were 21.6% and 20.6%, respectively.
The carrying amounts of cash equivalents, accounts payable, accrued expenses and other liabilities approximate their fair values.
Nonrecurring Fair Value Measurements
As of March 31, 2025, assets measured at fair value on a nonrecurring basis consist of one real estate asset for which we recorded an impairment and was written down to its estimated fair value. Our estimate of fair value was determined using the stated price within the purchase and sale agreement for this asset, net of estimated transaction costs, which is classified as Level 2 within the GAAP fair value hierarchy. As of March 31, 2025, the fair value of the real estate asset, net of estimated transaction costs, measured on a nonrecurring basis was $1.8 million. Refer to Note 2 "Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements" for further information on the impairment loss on real estate.