Real Estate Owned and Held-For-Sale

9 Months Ended

Sep. 30, 2017

Note 10 — Real Estate Owned and Held-For-Sale

Our real estate assets at both September 30, 2017 and December 31, 2016 were comprised of a hotel property and an office building.

Real Estate Owned

	September 30, 2017									December 31, 2016
	Hotel Property			Office Building			Total			Hotel Property			Office Building			Total

Land	$	3,293,651		$	4,509,000		$	7,802,651		$	3,293,651		$	4,509,000		$	7,802,651
Building and intangible assets	30,643,722			1,955,454			32,599,176			30,473,898			1,563,254			32,037,152
Less: Impairment loss	(13,307,354		)	—			(13,307,354		)	(11,200,000		)	—			(11,200,000		)
Less: Accumulated depreciation and amortization	(9,089,355		)	(650,398		)	(9,739,753		)	(8,658,737		)	(489,261		)	(9,147,998		)

Real estate owned, net	$	11,540,664		$	5,814,056		$	17,354,720		$	13,908,812		$	5,582,993		$	19,491,805

For the nine months ended September 30, 2017 and 2016, our remaining hotel property had a weighted average occupancy rate of 55% and 58%, respectively, a weighted average daily rate of $113 and $108, respectively, and weighted average revenue per available room of $62 and $63, respectively. The operation of a hotel property is seasonal with the majority of revenues earned in the first two quarters of the calendar year. During the second quarter of 2016, through site visits and discussion with market participants, we determined that the hotel property exhibited indicators of impairment and performed an impairment analysis. As a result of this impairment analysis, we recorded an impairment loss of $11.2 million. During the first half of 2017, we received additional market analyses, including discussions with market participants, which resulted in further impairments totaling $2.7 million.

Our office building was fully occupied by a single tenant until April 2017 when the lease expired. The building is currently vacant.

Our real estate assets had restricted cash balances due to escrow requirements totaling $0.7 million at both September 30, 2017 and December 31, 2016.

Real Estate Held-For-Sale

In 2016, we sold our three remaining multifamily properties and a hotel property for a total of $50.7 million and recognized a gain of $11.6 million. A portion of the sales proceeds were used to payoff the outstanding debt on the multifamily properties of $27.1 million.

The results of operations for properties classified as held-for-sale are summarized as follows:

	Nine Months Ended September 30, 2016

Revenue:
Property operating income	$	2,845,231
Expenses:
Property operating expenses	1,994,346
Depreciation	334,631

Net income	$	516,254

There were no properties classified as held-for-sale during the nine months ended September 30, 2017.