ALEXANDERS INCALX

ALEXANDERS INC Fair Value Disclosure

10-KFiled Feb 9, 20263 min read
FAIR VALUE MEASUREMENTS
ASC Topic 820, Fair Value Measurement (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities that are highly liquid and are actively traded in secondary markets; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available.  The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.  
 
Financial Assets and Liabilities Measured at Fair Value
 Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2025 consist of an interest rate cap, which is presented in the table below based on its level in the fair value hierarchy. There were no financial liabilities measured at fair value as of December 31, 2025. 
 
As of December 31, 2025
(Amounts in thousands)TotalLevel 1Level 2Level 3
Interest rate cap (included in other assets)$3 $— $3 $— 
Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2024 consist of interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy. There were no financial liabilities measured at fair value as of December 31, 2024.
 
As of December 31, 2024
(Amounts in thousands)TotalLevel 1Level 2Level 3
Interest rate derivatives (included in other assets)$4,487 $— $4,487 $— 
Interest Rate Derivatives
We recognize the fair value of all interest rate derivatives in “other assets” or “other liabilities” on our consolidated balance sheets and since all of our interest rate derivatives have been designated as cash flow hedges, changes in the fair value are recognized in other comprehensive income. The table below summarizes our interest rate derivatives, all of which hedge the interest rate risk attributable to the variable rate debt noted as of December 31, 2025 and 2024, respectively.
 Fair Value as of December 31,
As of December 31, 2025
(Amounts in thousands)20252024Notional AmountSwapped RateExpiration Date
Interest rate swap related to:
731 Lexington Avenue mortgage loan, retail condominium$— $4,117 N/AN/AN/A
Interest rate caps related to:
Rego Park II shopping center mortgage loan3 370 175,000 (1)12/26
Included in other assets$3 $4,487 
(1)
SOFR cap strike rate of 4.50%.
6. FAIR VALUE MEASUREMENTS - continued
Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents and mortgages payable. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities and are classified as Level 1. The fair value of our mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist, and is classified as Level 2. The table below summarizes the carrying amount and fair value of these financial instruments as of December 31, 2025 and 2024.
 
As of December 31, 2025
As of December 31, 2024
(Amounts in thousands)Carrying AmountFair
Value		Carrying AmountFair
Value
Assets:    
Cash equivalents$94,978 $94,978 $61,889 $61,889 
Liabilities:
Mortgages payable (excluding deferred debt issuance costs, net)$836,691 $783,004 $996,544 $967,941 
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About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

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