SPIRIT REALTY CAPITAL, INC. - 10-K filing on 2019-02-21

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table sets forth the Company’s financial liabilities that were accounted for at fair value on a recurring basis (in thousands):



			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
December 31, 2018
Derivatives:
Interest rate swaps financial liabilities	$	7,159	$	—	$	7,159	$	—
December 31, 2017
Derivatives:
Interest rate swaps financial liabilities	$	—	$	—	$	—	$	—

Schedule of Company's Assets Accounted for at Fair Value on a Nonrecurring Basis

The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of December 31, 2018 and 2017 (in thousands):



			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
December 31, 2018
Long-lived assets held and used	$	14,866	$	—	$	—	$	14,866
Long-lived assets held for sale	7,695		—		—		7,695

December 31, 2017
Long-lived assets held and used	$	28,312	$	—	$	—	$	28,312
Long-lived assets held for sale	42,142		—		—		42,142

Schedule of Weighted Average Sales Price Per Square Foot of Income Producing and Vacant Properties Used To Estimate Fair Value

For the years ended December 31, 2018 and 2017, we determined that eight and 18 long-lived assets held and used, respectively, were impaired. For three of the held and used properties impaired during the year ended December 31, 2018, the buildings were fully impaired due to our non-payment on the related ground leases.

For 17 of the held and used properties impaired during the year ended December 31, 2017, the Company estimated property fair value using price per square foot of comparable properties. The following table provides information about the price per square foot of comparable properties inputs used:



	December 31, 2018			December 31, 2017
Description	Range	Weighted Average	Square Footage	Range	Weighted Average		Square Footage
Long-lived assets held and used by asset type
Retail	—	—	—	$13.66 - $305.05	$	55.68	364,940
Industrial	—	—	—	$3.30 - $8.56	$	5.35	370,824
Office	—	—	—	$24.82 - $244.86	$	40.14	161,346

For the remaining five held and used property impaired during the year ended December 31, 2018 and one held and used properties impaired during the year ended December 31, 2017, the Company estimated property fair value using price per square foot of the listing price or a broker opinion of value. The following table provides information about the price per square foot of listing price and broker opinion of value inputs used:



	December 31, 2018				December 31, 2017
Description	Range	Weighted Average		Square Footage	Range	Weighted Average		Square Footage
Long-lived assets held and used by asset type
Retail	$185.42 - $638.72	$	507.11	27,302	$88.89	$	88.89	22,500
Office	$225.04	$	225.04	5,999	—	—		—

For the years ended December 31, 2018 and 2017, we determined that one and eight long-lived assets held for sale, respectively, were impaired. The Company estimated property fair value of held for sale properties using price per square foot from the signed purchase and sale agreements. The following table provides information about the price per square foot from signed purchase and sale agreements used:



	December 31, 2018				December 31, 2017
Description	Range	Weighted Average		Square Footage	Range	Weighted Average		Square Footage
Long-lived assets held for sale by asset type
Retail	$126.73	$	126.73	63,128	$55.30 - $346.23	$	230.52	150,376
Industrial	—	—		—	$24.02 - $54.21	$	37.09	223,747

Summary of Fair Value Information for Financial Instruments

The following table discloses fair value information for these financial instruments (in thousands):



	December 31, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net	$	47,044	$	48,740	$	79,967	$	82,886
Investment in Master Trust 2014	33,535		33,811		—		—
2015 Credit Facility, net	146,300		146,731		112,000		111,997
2015 Term Loan, net ⁽²⁾	419,560		424,670		—		—
Senior Unsecured Notes ⁽¹⁾	295,767		291,696		295,321		299,049
Convertible Notes, net ⁽¹⁾	729,814		740,330		715,881		761,440
Mortgages and notes payable, net ⁽¹⁾	463,196		487,548		2,516,478		2,657,599

⁽¹⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

⁽²⁾The carrying value of the debt instrument as of December 31, 2018 is net of unamortized deferred financing costs.