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7. OPERATING SEGMENTS
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
OPERATING SEGMENTS

Our segments are based on our method of internal reporting which classifies our operations by property type.  Our property types are grouped into commercial, apartments, hotels, land and other operating segments.  Significant differences among the accounting policies of the operating segments as compared to the Consolidated Financial Statements principally involve the calculation and allocation of administrative and other expenses.  Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow.

 

Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate.

 

The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt.

 

Presented below is our reportable segments’ operating income for the three and six months ended June 30, 2014 and 2013, including segment assets and expenditures (dollars in thousands):

 

    Commercial                                
For the Three Months Ended June 30, 2014   Properties     Apartments     Hotels     Land     Other     Total  
Rental and other property revenues   $ 4,775     $ 16,055     $ -     $ -     $ 18     $ 20,848  
Property operating expenses     3,168       6,871       -       280       -       10,319  
Depreciation     1,758       2,741       -       -       (18 )     4,481  
Mortgage and loan interest     1,637       4,161       -       1,412       2,536       9,746  
Deferred borrowing costs amortization     8       104       -       46       185       343  
Interest income     -       -       -       -       6,041       6,041  
Gain on land sales     -       -       -       (159 )     -       (159 )
Segment operating income (loss)   $ (1,796 )   $ 2,178     $ -     $ (1,897 )   $ 3,356     $ 1,841  
Capital expenditures     1,862       99       -       159       -       2,120  
Real estate assets     131,193       372,674       -       167,293       -       671,160  
                                                 
Property Sales                                                
Sales price   $ 16,600     $ -     $ -     $ 717     $ -     $ 17,317  
Cost of sale     9,597       -       -       876       -       10,473  
Gain (loss) on sale   $ 7,003     $ -     $ -     $ (159 )   $ -     $ 6,844  
                                                 
                                                 
    Commercial                                          
For the Three Months Ended June 30, 2013   Properties     Apartments     Hotels     Land     Other     Total  
Rental and other property revenues   $ 5,121     $ 15,252     $ -     $ 22     $ 7     $ 20,402  
Property operating expenses     2,383       6,645       -       356       32       9,416  
Depreciation     1,669       2,701       -       -       (39 )     4,331  
Mortgage and loan interest     1,655       4,336       -       1,504       1,790       9,285  
Deferred borrowing costs amortizaion     21       (94 )     -       35       7       (31 )
Loan charges and prepayment penalties     -       -       -       -       180       180  
Interest income     -       -       -       -       3,512       3,512  
Segment operating income (loss)   $ (607 )   $ 1,664     $ -     $ (1,873 )   $ 1,549     $ 733  
Capital expenditures     2,236       79       -       -       -       2,315  
Real estate assets     138,990       383,068       -       210,095       -       732,153  
                                                 
Property Sales                                                
Sales price   $ 26,974     $ 24,822     $ -     $ -     $ -     $ 51,796  
Cost of sale     14,914       18,808       -       -       -       33,722  
Gain on sale   $ 12,060     $ 6,014     $ -     $ -     $ -     $ 18,074  

 

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

 

    For the Three Months Ended  
    June 30,  
    2014     2013  
Segment operating income   $ 1,841     $ 733  
Other non-segment items of income (expense)                
General and administrative     (3,196 )     (2,041 )
Net income fee to related party     (210 )     (48 )
Advisory fee to related party     (2,202 )     (2,487 )
Other income     232       149  
Provision on impairment of notes receivable and real estate assets     -       (800 )
Earnings from unconsolidated investees     (124 )     (25 )
Litigation settlement     (86 )     57  
Income tax benefit     2,035       5,217  
Net income (loss) from continuing operations   $ (1,710 )   $ 755  

 

 

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

 

    June 30,  
    2014     2013  
Segment assets   $ 671,160     $ 732,153  
Investments in unconsolidated investees     3,833       10,415  
Notes and interest receivable     138,014       103,690  
Other assets     109,218       212,355  
Total assets   $ 922,225     $ 1,058,613  

 

    Commercial                                
For the Six Months Ended June 30, 2014   Properties     Apartments     Hotels     Land     Other     Total  
Rental and other property revenues   $ 9,557     $ 31,736     $ -     $ -     $ 28     $ 41,321  
Property operating expenses     6,315       13,668       -       590       5       20,578  
Depreciation     3,571       5,435       -       (54 )     -       8,952  
Mortgage and loan interest     3,114       8,357       -       2,462       4,279       18,212  
Deferred borrowing costs amortization     21       992       -       81       188       1,282  
Loan charges and prepayment penalties     9       1,573       -       -       -       1,582  
Interest income     -       -       -       -       10,158       10,158  
Gain on land sales     -       -       -       594       -       594  
Segment operating income (loss)   $ (3,473 )   $ 1,711     $ -     $ (2,485 )   $ 5,714     $ 1,467  
Capital expenditures     2,992       99       -       151       -       3,242  
Real estate assets     131,193       372,674       -       167,293       -       671,160  
                                                 
Property Sales                                                
Sales price   $ 16,600     $ 23,131     $ -     $ 717     $ -     $ 40,448  
Cost of sale     9,597       17,077       -       123       -       26,797  
Gain on sale   $ 7,003     $ 6,054     $ -     $ 594     $ -     $ 13,651  
                                                 
                                                 
    Commercial                                          
For the Six Months Ended June 30, 2013   Properties     Apartments     Hotels     Land     Other     Total  
Rental and other property revenues   $ 10,384     $ 30,183     $ -     $ 56     $ 14     $ 40,637  
Property operating expenses     5,594       13,009       -       726       9       19,338  
Depreciation     2,777       5,401       -       -       (98 )     8,080  
Mortgage and loan interest     2,986       9,000       -       3,041       3,693       18,720  
Deferred borrowing costs amortizaion     43       2,247       -       97       42       2,429  
Loan charges and prepayment penalties     -       3,937       -       -       180       4,117  
Interest income     -       -       -       -       7,053       7,053  
Loss on land sales     -       -       -       (35 )     -       (35 )
Segment operating income (loss)   $ (1,016 )   $ (3,411 )   $ -     $ (3,843 )   $ 3,241     $ (5,029 )
Capital expenditures     2,913       110       -       281       -       3,304  
Real estate assets     138,990       383,068       -       210,095       -       732,153  
                                                 
Property Sales                                                
Sales price   $ 26,974     $ 50,122     $ -     $ 2,250     $ -     $ 79,346  
Cost of sale     14,914       36,881       -       2,285       -       54,080  
Gain (loss) on sale   $ 12,060     $ 13,241     $ -     $ (35 )   $ -     $ 25,266  

 

 

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

 

    For the Six Months Ended  
    June 30,  
    2014     2013  
Segment operating income (loss)   $ 1,467     $ (5,029 )
Other non-segment items of income (expense)                
General and administrative     (5,188 )     (4,053 )
Net income fee to related party     (700 )     (104 )
Advisory fee to related party     (4,445 )     (5,042 )
Other income     411       2,685  
Loss on sale of investments     -       (8 )
Provision on impairment of notes receivable and real estate assets     -       (800 )
Earnings from unconsolidated investees     (54 )     188  
Litigation settlement     3,752       12  
Income tax benefit     3,918       7,905  
Net loss from continuing operations   $ (839 )   $ (4,246 )

 

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

 

    June 30,  
    2014     2013  
Segment assets   $ 671,160     $ 732,153  
Investments in unconsolidated investees     3,833       10,415  
Notes and interest receivable     138,014       103,690  
Other assets     109,218       212,355  
Total assets   $ 922,225     $ 1,058,613