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10-K
MACERICH CO filed this Form 10-K on 02/23/2018
Entire Document
 
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
6. Property, net: (Continued)

The following table summarizes certain of the Company's assets that were measured on a nonrecurring basis as a result of impairment charges recorded for the years ended December 31, 2017, 2016 and 2015 as described above:
Years ended December, 31
 
Total Fair Value Measurement
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
2017
 
$
38,000

 
$

 
$
38,000

 
$

2016
 
$
86,100

 
$

 
$

 
$
86,100

2015
 
$
49,700

 
$

 
$
6,200

 
$
43,500

The fair value relating to impairments that were based on sales contracts were classified within Level 2 of the fair value hierarchy. The fair value relating to impairment assessments that were not based on sales contracts were based on a discounted cash flow model that included all cash inflows and outflows over a specific holding period. Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based upon market conditions and expectations for growth. Terminal capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed. Based upon these inputs, the Company determined that its valuations of properties using a discounted cash flow model are classified within Level 3 of the fair value hierarchy.
The following table sets forth quantitative information about the unobservable inputs of the Company’s Level 3 real estate recorded as of December 31, 2016 and 2015:
Unobservable Inputs
 
2016
 
2015
Terminal capitalization rate
 
7.0% - 10.0%
 
9.0%
Discount rate
 
8.0% - 15.0%
 
9.5%
Market rents per square foot
 
$2.00 - $20.00
 
$5.00 - $150.00
7. Tenant and Other Receivables, net:
Included in tenant and other receivables, net is an allowance for doubtful accounts of $2,786 and $1,991 at December 31, 2017 and 2016, respectively. Also included in tenant and other receivables, net are accrued percentage rents of $8,711 and $9,509 at December 31, 2017 and 2016, respectively, and a deferred rent receivable due to straight-line rent adjustments of $61,859 and $56,761 at December 31, 2017 and 2016, respectively.
On March 17, 2014, in connection with the sale of Lake Square Mall, a 559,000 square foot regional shopping center in Leesburg, Florida, the Company issued a note receivable for $6,500 that bore interest at an effective rate of 6.5% and was to mature on March 17, 2018 ("LSM Note A") and a note receivable for $3,103 that bore interest at 5.0% and was to mature on December 31, 2014 ("LSM Note B"). LSM Note A and LSM Note B were paid off on October 20, 2017 and September 2, 2014, respectively.

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