Commercial Mortgage Loans

12 Months Ended

Dec. 31, 2014

Mortgage Loans on Real Estate [Line Items]



Property Type	Location	Interest Rate		Final Extended Maturity Date	Periodic Payment Terms	Face amount of loans		Carrying amount of loans
Commercial mortgage loans
Hotel	Maryland	9.00	%	Apr -15		24,590		24,557
Condo Conversion	New York	9.67	%	Sept - 16	Interest only	33,846		33,961
Condo Construction	Maryland	10.50	%	Mar-17	Interest only	28,000		27,520
Vacation Home Portfolio	Various	7.50	%	Apr-19		100,046		99,086
Hotel	Pennsylvania	4.71	%	May-19	Interest only	34,000		33,842
Condo Construction	Maryland	10.75	%	Jun-17	Interest only	20,000		19,616
Multifamily	New York	4.41	%	Aug-19	Interest only	30,000		30,110
Mixed Use	Ohio	9.25	%	May-20		20,000		18,309
Condo Conversion	New York	3.75	%	Jun-16	Interest only	67,300		64,714
Multifamily	North Dakota	5.15	%	Nov-19		57,792		57,297
Vacation Home Portfolio	Various US cities	7.00	%	Nov-21	Interest only	50,000		49,508
Total commercial mortgage loans						465,574		458,520
Subordinate loans (1)
Office	Michigan	13.00	%	Jun - 20		8,813		8,813
Ski Resort	California	13.25	%	May - 17	Interest only	40,000		39,771
Mixed Use	North Carolina	11.10	%	Aug - 22	Interest only	6,525		6,525
Office Complex	Missouri	11.75	%	Oct - 22		9,711		9,711
Hotel Portfolio	Various US cities	11.07	%	Nov - 16		34,042		33,995
Condo Construction	New York	13.25	%	July - 18	Interest only	76,344		76,005
Multifamily Conversion	New York	10.23	%	Dec - 15	Interest only	14,608		14,703
Hotel Portfolio	Minnesota	11.00	%	Feb - 18		24,486		24,486
Warehouse Portfolio	Various US cities	11.50	%	May - 23	Interest only	32,000		32,000
Multifamily Conversion	New York	12.25	%	Feb - 15	Interest only	44,000		43,989
Office Condo	New York	11.25	%	Jul - 22	Interest only	14,000		13,596
Condo Conversion	New York	9.67	%	Sept - 16	Interest only	29,751		29,762
Mixed Use	Pennsylvania	9.42	%	Aug - 18	Interest only	22,500		22,473
Mixed Use	Various US cities	14.00	%	Dec - 18	Interest only	19,464		19,294
Mixed Use	England	9.25	%	Jan-15	Interest only	52,355		52,355
Healthcare Portfolio	Various US	9.43	%	Jun-19	Interest only	50,000		50,000
Hotel	New York	10.25	%	Jul-19	Interest only	20,000		19,870
Ski Resort	Montana	14.00	%	Sept-20	Interest only	15,000		14,861
Mixed Use	New York	10.66	%	Dec-19		50,000		48,973
Total subordinate loans						563,599		561,182
Total						$	1,029,173	$	1,019,702	⁽²⁾


(1)	Subject to prior liens.


(2)	The aggregate cost for federal income tax purposes is $1,019,702.

The following table summarizes the changes in the carrying amounts of mortgage loans during 2014 and 2013.

Reconciliation of Carrying Amount of Loans



	2014			2013
Balance at beginning of year	$	658,583		$	389,167
New loans	802,664			401,912
Sales	(4,950		)	—
Collections of principal	(299,551		)	(137,168		)
Discount accretion	4,316			4,672
Foreign currency loss	(4,095		)	—
Payment-in-kind	16,570			—
Exchange for CMBS (held-to-maturity)	(153,835		)	—
Balance at the close of year	$	1,019,702		$	658,583

Commercial mortgage loans [Member]

Mortgage Loans on Real Estate [Line Items]

Loans

Commercial Mortgage Loans

The Company’s commercial mortgage loan portfolio was comprised of the following at December 31, 2014:



Description	Date of Investment	Maturity Date	Original Face Amount		Current Face Amount		Carrying Value		Coupon		Property Size
Hotel - Silver Spring, MD (1)	Mar-10	Apr-15	$	26,000	$	24,590	$	24,557	Fixed		263 rooms
Condo Conversion – NY, NY (1)(2)	Aug-13	Sept-15	33,000		33,846		33,961		Floating		40,000 sq. ft.
Condo Construction - Potomac, MD (3)	Feb-14	Sept-16	28,000		28,000		27,520		Floating		50 units
Vacation Home Portfolio - Various	Apr-14	Apr-19	101,000		100,046		99,086		Fixed		229 properties
Hotel - Philadelphia, PA (1)(4)	May-14	May-17	34,000		34,000		33,842		Floating		301 rooms
Condo Construction - Bethesda, MD (5)	Jun-14	Dec-16	20,000		20,000		19,616		Floating		40 units
Multifamily - Brooklyn, NY (1)(6)	Jul-14	Aug-16	30,000		30,000		30,110		Floating		63 units
Mixed Use - Cincinnati, Ohio (7)	Nov-14	May-18	20,000		20,000		18,309		Floating		65 acres
Condo Conversion - NY, NY (1)(8)	Nov-14	Dec-15	67,300		67,300		64,714		Floating		86,000 sq. ft.
Multifamily - Williston, North Dakota (1)(4)	Nov-14	Nov-17	58,000		57,792		57,297		Floating		366 units/homes
Vacation Home Portfolio - Various U.S. (4)	Nov-14	Nov-19	50,000		50,000		49,508		Fixed		24 properties
Total/Weighted Average			$	467,300	$	465,574	$	458,520	6.84	%


(1)	At December 31, 2014, this loan was pledged to secure borrowings under the Company’s master repurchase facility entered into with JPMorgan Chase Bank, N.A. (the “JPMorgan Facility”). See Note 9 – Borrowings for a description of this facility.


(2)	This loan includes a one-year extension option subject to certain conditions and the payment of a fee.


(3)	This loan includes a six-month extension option subject to certain conditions and the payment of a fee. As of December 31, 2014, the Company had $52,000 of unfunded loan commitments related to this loan.


(4)	This loan includes two one-year extension options subject to certain conditions and the payment of a fee.


(5)	This loan includes a six-month extension option subject to certain conditions and the payment of a fee. As of December 31, 2014, the Company had $45,100 of unfunded loan commitments related to this loan.


(6)	This loan includes three one-year extension options subject to certain conditions and the payment of a fee for each extension. As of December 31, 2014, the Company had $4,500 of unfunded loan commitments related to this loan.


(7)	This loan includes two one-year extension options subject to certain conditions and the payment of a fee. As of December 31, 2014, the Company had $145,000 of unfunded loan commitments related to this loan.


(8)	This loan includes a six-month extension option subject to certain conditions and the payment of a fee.

During November 2014, the Company received the full repayment from a whole loan secured by an office condominium in New York City as well as a hotel in New York City.

During the fourth quarter of 2014, the Company received the full repayment from a whole loan secured by a condominium conversion project in New York City.

The Company’s commercial mortgage loan portfolio was comprised of the following as of December 31, 2013:



Description	Date of Investment	Maturity Date	Original Face Amount		Current Face Amount		Carrying Value		Coupon		Property Size
Hotel - NY, NY (1)	Jan-10	Feb-15	$	32,000	$	31,317	$	31,317	Fixed		151 rooms
Office Condo (Headquarters) - NY, NY (1)	Feb-10	Feb-15	28,000		27,169		27,169		Fixed		73,419 sq. ft.
Hotel - Silver Spring, MD (1)	Mar-10	Apr-15	26,000		24,947		24,785		Fixed		263 rooms
Condo Conversion – NY, NY (2)	Dec-12	Jan-15	45,000		45,000		44,867		Floating		119,000 sq. ft.
Condo Conversion – NY, NY (3)	Aug-13	Sept-15	33,000		33,167		32,961		Floating		40,000 sq. ft.
Total/Weighted Average			$	164,000	$	161,600	$	161,099	8.82	%


(1)	At December 31, 2013, this loan was pledged to secure borrowings under the JPMorgan Facility. See Note 9 – Borrowings for a description of this facility.


(2)	This loan includes two one-year extension options subject to certain conditions and the payment of a fee for each extension.


(3)	This loan includes a one-year extension option subject to certain conditions and the payment of a fee.

During March 2013, the Company consented to the transfer of the controlling ownership of the borrower under the Silver Spring, Maryland loan. In conjunction with its consent, the Company received a $280 fee, which will be recognized over the remaining life of the loan.

During September 2013, two senior sub-participation interests in a first mortgage loan which was secured by over 20 acres of land in South Boston, Massachusetts were repaid at par. The senior sub-participation interests were purchased at 78% of par (including a 3% brokerage fee).

The Company evaluates each loan for possible impairment on a quarterly basis. The Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations are sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such loan loss analyses are completed and reviewed by asset management and finance personnel, who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and discussions with market participants. An allowance for loan loss is established when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. The Company has determined that an allowance for loan losses was not necessary at December 31, 2014 and 2013.