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Fair Values
 9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Values
Fair Values
Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:
Level 1:    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2:    Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3:    Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
Certain of the Company's assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.
The following fair value hierarchy table summarizes the Company's assets and liabilities recorded at fair value on a recurring and non-recurring basis by the above categories ($ in thousands):
 
 
 
Fair Value Using
 
Total
 
Quoted market
prices in
active markets
(Level 1)
 
Significant other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
As of September 30, 2013
 
 
 
 
 
 
 
Recurring basis:
 
 
 
 
 
 
 
Derivative assets
$
10,091

 
$
—

 
$
10,091

 
$
—

Derivative liabilities
$
8,164

 
$
—

 
$
8,164

 
$
—

Non-recurring basis:
 
 
 
 
 
 
 
Impaired loan(1)
$
0

 
$
—

 
$
—

 
$
0

Impaired real estate(2)
$
39,204

 
$
—

 
$
—

 
$
39,204

As of December 31, 2012
 
 
 
 
 
 
 
Recurring basis:
 
 
 
 
 
 
 
Derivative liabilities
$
3,435

 
$
—

 
$
3,435

 
$
—

Non-recurring basis:
 
 
 
 
 
 
 
Impaired loans
$
57,201

 
$
—

 
$
—

 
$
57,201

Impaired real estate
$
31,597

 
$
—

 
$
7,649

 
$
23,948


Explanatory Note:
_______________________________________________________________________________
(1)
The Company impaired its junior position in a loan based upon the anticipated proceeds expected to be realized by the Company pursuant to the proposed terms of a restructuring of the loan.
(2)
The Company recorded the fair value of an impaired real estate asset using discounted cash flows based on discount rates with a range of 9.0% to 11.0% and average annual revenue growth with a range of 0.0% and 3.0%.
Fair values of financial instruments—The Company's estimated fair values of its loans receivable and other lending investments and debt obligations were $1.4 billion and $4.5 billion, respectively, as of September 30, 2013 and $1.9 billion and $4.9 billion, respectively, as of December 31, 2012. The Company determined that the significant inputs used to value its loans receivable and debt obligations fall within Level 3 of the fair value hierarchy. The carrying value of other financial instruments including cash and cash equivalents, restricted cash, accrued interest receivable and accounts payable, approximate the fair values of the instruments. Cash and cash equivalents and restricted cash values are considered Level 1 on the fair value hierarchy. The fair value of other financial instruments, including derivative assets and liabilities, are included in the fair value hierarchy table above.