Loans Receivable and Other Lending Investments, net (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of the Company's loans and other lending investments by class

The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):



	As of
Type of Investment	September 30, 2014			December 31, 2013
Senior mortgages	$	588,984		$	1,071,662
Subordinate mortgages	46,476			60,679
Corporate/Partnership loans	490,864			473,045
Total gross carrying value of loans	1,126,324			1,605,386
Reserves for loan losses	(119,907		)	(377,204		)
Total loans receivable, net	1,006,417			1,228,182
Other lending investments—securities	184,329			141,927
Total loans receivable and other lending investments, net(1)	$	1,190,746		$	1,370,109

Explanatory Note:

_______________________________________________________________________________


(1)	The Company's recorded investment in loans as of September 30, 2014 and December 31, 2013 also includes accrued interest of $6.5 million and $6.5 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's Consolidated Balance Sheets.

Schedule of changes in the Company's reserve for loan losses

Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Reserve for loan losses at beginning of period	$	137,904		$	479,826		$	377,204		$	524,499
Provision for (recovery of) loan losses(1)	(673		)	(9,834		)	(6,865		)	5,392
Charge-offs	(17,324		)	(89,985		)	(250,432		)	(149,884		)
Reserve for loan losses at end of period	$	119,907		$	380,007		$	119,907		$	380,007

Explanatory Note:

_______________________________________________________________________________


(1)	For the three and nine months ended September 30, 2014, the provision for loan losses includes recoveries of previously recorded loan loss reserves of $0.9 million and $8.5 million, respectively. For the three and nine months ended September 30, 2013, the provision for loan losses includes recoveries of previously recorded loan loss reserves of $44.1 million and $55.1 million, respectively.

Schedule of recorded investment in loans and associated reserve for loan losses

The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):



	Individually Evaluated for Impairment(1)			Collectively Evaluated for Impairment(2)			Loans Acquired with Deteriorated Credit Quality(3)		Total
As of September 30, 2014
Loans	$	211,811		$	921,033		$	—	$	1,132,844
Less: Reserve for loan losses	(89,107		)	(30,800		)	—		(119,907		)
Total	$	122,704		$	890,233		$	—	$	1,012,937
As of December 31, 2013
Loans	$	752,425		$	849,613		$	9,889	$	1,611,927
Less: Reserve for loan losses	(348,004		)	(29,200		)	—		(377,204		)
Total	$	404,421		$	820,413		$	9,889	$	1,234,723

Explanatory Notes:

_______________________________________________________________________________

(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs aggregating to a net discount of $0.2 million and a net premium of $0.5 million as of September 30, 2014 and December 31, 2013, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and therefore, the unamortized amounts associated with these loans are not currently being amortized into income.


(2)	The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs aggregating to a net discount of $8.3 million and $4.6 million as of September 30, 2014 and December 31, 2013, respectively.


(3)	The carrying value of the loan includes unamortized discounts, premiums, deferred fees and costs aggregating to a net premium of $0.4 million as of December 31, 2013. The loan had a cumulative principal balance of $10.2 million as of December 31, 2013. The loan was repaid during the nine months ended September 30, 2014.

Schedule of investment in performing loans, presented by class and by credit quality, as indicated by risk rating

The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):



	As of
	September 30, 2014			December 31, 2013
	Performing Loans		Weighted Average Risk Ratings	Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	411,280	2.50	$	591,145	2.50
Subordinate mortgages	47,019		2.89	61,364		3.37
Corporate/Partnership loans	494,584		3.83	438,831		3.88
Total	$	952,883	3.21	$	1,091,340	3.11

Schedule of recorded investment in loans, aged by payment status and presented by class

As of September 30, 2014, the Company's recorded investment in loans, aged by payment status and presented by class, were as follows ($ in thousands):



	Current		Less Than and Equal to 90 Days		Greater Than 90 Days(1)		Total Past Due		Total
Senior mortgages	$	444,704	$	—	$	146,537	$	146,537	$	591,241
Subordinate mortgages	47,019		—		—		—		47,019
Corporate/Partnership loans	494,584		—		—		—		494,584
Total	$	986,307	$	—	$	146,537	$	146,537	$	1,132,844

Explanatory Note:

_______________________________________________________________________________


(1)	As of September 30, 2014, the Company had 4 loans which were greater than 90 days delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from 5.0 to 6.0 years outstanding.

Schedule of recorded investment in impaired loans, presented by class

Impaired Loans—The Company's recorded investment in impaired loans, presented by class, were as follows ($ in thousands)(1):



	As of September 30, 2014							As of December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Senior mortgages	$	—	$	—	$	—		$	3,012	$	2,992	$	—
With an allowance recorded:
Senior mortgages	181,380		180,454		(86,975		)	650,337		645,463		(304,544		)
Corporate/Partnership loans	30,431		30,444		(2,132		)	99,076		99,067		(43,460		)
Subtotal	211,811		210,898		(89,107		)	749,413		744,530		(348,004		)
Total:
Senior mortgages	181,380		180,454		(86,975		)	653,349		648,455		(304,544		)
Corporate/Partnership loans	30,431		30,444		(2,132		)	99,076		99,067		(43,460		)
Total	$	211,811	$	210,898	$	(89,107	)	$	752,425	$	747,522	$	(348,004	)

Explanatory Note:

_______________________________________________________________________________

(1)

All of the Company's non-accrual loans are considered impaired and included in the table above. In addition, as of September 30, 2014 and December 31, 2013, certain loans modified through troubled debt restructurings with a recorded investment of $31.9 million and $231.8 million, respectively, are also included as impaired loans in accordance with GAAP although they are performing and on accrual status.

Schedule of average recorded investment in impaired loans and interest income recognized, presented by class

The Company's average recorded investment in impaired loans and interest income recognized, presented by class, were as follows ($ in thousands):



	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2014				2013				2014				2013
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Senior mortgages	$	40,635	$	1,234	$	13,622	$	166	$	44,574	$	1,922	$	38,508	$	9,223
Corporate/Partnership loans	—		—		10,044		349		—		—		10,077		789
Subtotal	40,635		1,234		23,666		515		44,574		1,922		48,585		10,012
With an allowance recorded:
Senior mortgages	192,513		18		749,367		444		385,277		140		830,225		1,399
Subordinate mortgages	—		—		27,068		—		—		—		40,478		—
Corporate/Partnership loans	34,330		40		82,290		83		63,948		157		72,308		240
Subtotal	226,843		58		858,725		527		449,225		297		943,011		1,639
Total:
Senior mortgages	233,148		1,252		762,989		610		429,851		2,062		868,733		10,622
Subordinate mortgages	—		—		27,068		—		—		—		40,478		—
Corporate/Partnership loans	34,330		40		92,334		432		63,948		157		82,385		1,029
Total	$	267,478	$	1,292	$	882,391	$	1,042	$	493,799	$	2,219	$	991,596	$	11,651

Schedule of troubled debt restructurings, presented by class

The recorded investment in these loans was impacted by the modifications as follows, presented by class ($ in thousands):



	For the Three Months Ended September 30, 2014					For the Nine Months Ended September 30, 2014
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Senior mortgages	1	$	7,040	$	7,040	1	$	7,040	$	7,040



	For the Three Months Ended September 30, 2013					For the Nine Months Ended September 30, 2013
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Senior mortgages	2	$	9,020	$	9,020	5	$	153,452	$	145,778

Marketable securities

As of September 30, 2014, other lending investments—securities includes the following ($ in thousands):



	Face Value		Amortized Cost Basis		Net Unrealized Gain (Loss)		Estimated Fair Value		Net Carrying Value
Available-for-Sale Securities
Municipal debt securities	$	1,020	$	1,020	$	115	$	1,135	$	1,135
Held-to-Maturity Securities
Corporate debt securities	175,506		183,194		—		183,194		183,194
Total	$	176,526	$	184,214	$	115	$	184,329	$	184,329