Loans Receivable and Other Lending Investments, net (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016			December 31, 2015
Senior mortgages	$	1,080,612		$	975,915
Corporate/Partnership loans	558,913			643,270
Subordinate mortgages	25,525			28,676
Total gross carrying value of loans	1,665,050			1,647,861
Reserves for loan losses	(95,416		)	(108,165		)
Total loans receivable, net	1,569,634			1,539,696
Other lending investments—securities	62,552			62,289
Total loans receivable and other lending investments, net	$	1,632,186		$	1,601,985

Schedule of changes in the Company's 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,
	2016			2015			2016			2015
Reserve for loan losses at beginning of period	$	110,371		$	121,934		$	108,165		$	98,490
(Recovery of) provision for loan losses⁽¹⁾	(14,955		)	7,500			(12,749		)	30,944
Charge-offs	—			(876		)	—			(876		)
Reserve for loan losses at end of period	$	95,416		$	128,558		$	95,416		$	128,558

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(1)	For the three and nine months ended September 30, 2016, the provision for loan losses includes recoveries of previously recorded asset-specific loan loss reserves of $11.7 million. For the three and nine months ended September 30, 2015, the provision for loan losses includes recoveries of previously recorded asset-specific loan loss reserves of $0.1 million and $0.6 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⁾			Total
As of September 30, 2016
Loans	$	296,700		$	1,376,190		$	1,672,890
Less: Reserve for loan losses	(74,216		)	(21,200		)	(95,416		)
Total⁽³⁾	$	222,484		$	1,354,990		$	1,577,474
As of December 31, 2015
Loans	$	132,492		$	1,524,347		$	1,656,839
Less: Reserve for loan losses	(72,165		)	(36,000		)	(108,165		)
Total⁽³⁾	$	60,327		$	1,488,347		$	1,548,674

_______________________________________________________________________________

(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.4 million and $0.2 million as of September 30, 2016 and December 31, 2015, 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. During the nine months ended September 30, 2016, the Company transferred a loan with a gross carrying value of $157.2 million to non-performing loans due to the initiation of bankruptcy proceedings related to the collateral, which resulted in the release of $11.6 million of the general reserve. The Company performed a valuation and recorded a specific reserve of $12.5 million.


(2)	The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.3 million and $8.2 million as of September 30, 2016 and December 31, 2015, respectively.

(3)

The Company's recorded investment in loans as of September 30, 2016 and December 31, 2015 includes accrued interest of $7.8 million and $9.0 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of September 30, 2016 and December 31, 2015, excludes $62.6 million and $62.3 million, respectively, of securities that are evaluated for impairment under ASC 320.

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, 2016			As of December 31, 2015
	Performing Loans		Weighted Average Risk Ratings	Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	957,681	2.78	$	853,595	2.96
Corporate/Partnership loans	404,493		2.25	641,713		3.37
Subordinate mortgages	14,016		3.00	29,039		3.64
Total	$	1,376,190	2.63	$	1,524,347	3.15

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

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
As of September 30, 2016
Senior mortgages	$	966,981	$	—	$	118,665	$	118,665	$	1,085,646
Corporate/Partnership loans	398,838		5,655		157,171		162,826		561,664
Subordinate mortgages	25,580		—		—		—		25,580
Total	$	1,391,399	$	5,655	$	275,836	$	281,491	$	1,672,890
As of December 31, 2015
Senior mortgages	$	864,099	$	—	$	116,250	$	116,250	$	980,349
Corporate/Partnership loans	647,451		—		—		—		647,451
Subordinate mortgages	29,039		—		—		—		29,039
Total	$	1,540,589	$	—	$	116,250	$	116,250	$	1,656,839

_______________________________________________________________________________

(1)

As of September 30, 2016, the Company had five 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 1.0 to 8.0 years outstanding. As of December 31, 2015, the Company had four 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 1.0 to 7.0 years outstanding.

Schedule of recorded investment in impaired loans, presented by class

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



	As of September 30, 2016							As of December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Subordinate mortgages	$	11,564	$	11,548	$	—		$	—	$	—	$	—
Subtotal	11,564		11,548		—			—		—		—
With an allowance recorded:
Senior mortgages	127,965		126,547		(61,745		)	126,754		125,776		(69,627		)
Corporate/Partnership loans	157,171		146,783		(12,471		)	5,738		5,738		(2,538		)
Subtotal	285,136		273,330		(74,216		)	132,492		131,514		(72,165		)
Total	$	296,700	$	284,878	$	(74,216	)	$	132,492	$	131,514	$	(72,165	)

____________________________________________________________


(1)	All of the Company's non-accrual loans are considered impaired and included in the table above.

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,
	2016				2015				2016				2015
	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	$	4,608	$	114	$	—	$	—	$	4,575	$	226	$	—	$	—
Subordinate mortgages	11,567		—		—		—		5,784		—		—		—
Subtotal	16,175		114		—		—		10,359		226		—		—
With an allowance recorded:
Senior mortgages	127,494		—		128,969		4		127,169		—		129,730		38
Corporate/Partnership loans	81,108		—		49,893		—		43,339		—		28,880		12
Subtotal	208,602		—		178,862		4		170,508		—		158,610		50
Total	$	224,777	$	114	$	178,862	$	4	$	180,867	$	226	$	158,610	$	50

Schedule of other lending investments - securities

Other lending investments—securities includes the following ($ in thousands):



	Face Value		Amortized Cost Basis		Net Unrealized Gain (Loss)		Estimated Fair Value		Net Carrying Value
As of September 30, 2016
Available-for-Sale Securities
Municipal debt securities	$	5,365	$	5,365	$	415	$	5,780	$	5,780
Held-to-Maturity Securities
Debt securities	57,061		56,772		—		57,090		56,772
Total	$	62,426	$	62,137	$	415	$	62,870	$	62,552
As of December 31, 2015
Available-for-Sale Securities
Municipal debt securities	$	1,010	$	1,010	$	151	$	1,161	$	1,161
Held-to-Maturity Securities
Debt securities	54,549		61,128		—		61,199		61,128
Total	$	55,559	$	62,138	$	151	$	62,360	$	62,289