v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
We estimate the fair value of certain assets and liabilities using pricing models that rely on observable market information, including contractual terms, market prices, and interest rate yield curves. A three-level valuation hierarchy prioritizes observable and unobservable inputs used to measure fair value, as described below:
•Level 1 – Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
•Level 2 – Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.
•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.
Recurring Fair Value Measurements
The following table summarizes investments measured at fair value on a recurring basis, which are presented in other assets, net, and accrued liabilities and other in our condensed consolidated balance sheets (in thousands). See Note 10 for discussion regarding our derivative activity during the year.
As of June 30, 2025As of December 31, 2024
Total Fair ValueLevel 1Level 2Level 3Total Fair ValueLevel 1Level 2Level 3
Interest rate swaps - pay-fixed, receive-floating
$(14,179)$— $(14,179)$— $66 $— $66 $— 
Interest rate caps, net (1)
$812 $— $812 $— $5,262 $— $5,262 $— 
(1)Interest rate caps, net, as of June 30, 2025, is inclusive of $1.6 million of interest rate caps, offset partially by $0.8 million of sold interest rate caps.
Financial Assets and Liabilities Not Measured at Fair Value
We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximated their estimated fair value as of June 30, 2025 and December 31, 2024, due to their relatively short-term nature and high probability of realization. The carrying value of our variable-rate non-recourse property debt, which we classify as Level 2 in the GAAP fair value hierarchy, approximated fair value as of June 30, 2025 and December 31, 2024, as such debt bears interest at floating rates which approximate market rates.
We classify the fair value of our fixed-rate non-recourse property debt, seller financing notes receivable, and preferred equity investment within Level 2 of the GAAP fair value hierarchy, as summarized in the following table (in thousands):
As of June 30, 2025As of December 31, 2024
Carrying ValueFair ValueCarrying ValueFair Value
Fixed-rate non-recourse property debt$1,952,651 $1,864,400 $2,144,797 $1,963,083 
Seller financing note receivable, net (1)$33,731 $36,053 $33,151 $32,999 
Preferred equity investment (2)$24,462 $26,181 $23,872 $25,513 
(1) During the year ended December 31, 2022, we provided $40.0 million of seller financing as partial consideration for the sale of our New England portfolio. The contractual interest rate on the note is 4.5%. The difference between the stated rate and the market interest rate as of the date of sale resulted in a discount recorded of $8.5 million. The seller financing note and related discount are included in other assets, net in our condensed consolidated balance sheets.
(2) In conjunction with the Value-Add JV transaction, we received a preferred equity investment within the joint venture. The contractual interest rate on the preferred equity investment is 7.25%. The difference between the stated rate and the effective interest rate as of the date of the transaction resulted in a discount recorded of $5.9 million. The preferred equity investment and related discount are included in investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets.