9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of financial instruments at September 30, 2016, and December 31, 2015, are as follows (in thousands):

 

		2016								2015
		Carrying Amount				Fair Value				Carrying Amount				Fair Value
Cash and cash equivalents		$	29,834			$	29,834			$	56,087			$	56,087
Restricted cash			13,292				13,292				13,159				13,159
Notes payable, excluding deferred loan costs			876,726				864,595				777,116				724,769

The following methods and assumptions were used in estimating the Company’s fair value disclosures for financial instruments:

Cash and cash equivalents and Restricted cash: The carrying amounts reported in the Company’s Consolidated Balance Sheets for cash and cash equivalents and restricted cash approximate fair value, which represent level 1 inputs as defined in the accounting standards codification.

Notes payable: The fair value of notes payable is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent level 2 inputs as defined in the accounting standards codification.

The estimated fair value of these assets and liabilities could be affected by market changes and this effect could be material.