Investments in Real Estate

6 Months Ended

Jun. 30, 2012

Investments in Real Estate [Abstract]

INVESTMENTS IN REAL ESTATE

NOTE 5: INVESTMENTS IN REAL ESTATE

The table below summarizes our investments in real estate:

	As of June 30, 2012					As of December 31, 2011
	Book Value			Number of Properties		Book Value			Number of Properties
Multi-family real estate properties	$	594,928			33	$	591,915			33
Office real estate properties		270,724			11		251,303			10
Retail real estate properties		81,454			4		71,405			3
Parcels of land		47,059			10		46,251			10
Investment in real estate		994,165			58		960,874			56
Less: Accumulated depreciation and amortization		(83,037	)				(69,372	)
Investments in real estate, net	$	911,128				$	891,502

As of June 30, 2012, our investments in real estate of $994,165 are financed through $135,045 of mortgages held by third parties and $827,388 of mortgages held by our consolidated securitizations. Together, along with commercial real estate loans held by these securitizations, these mortgages serve as collateral for the CDO notes payable issued by our consolidated securitizations. All intercompany balances and interest charges are eliminated in consolidation.

Acquisitions:

During the six-month period ended June 30, 2012, we converted two loans with a carrying value of $24,871, relating to one office property and one retail property, to owned real estate. Upon conversion, we recorded the investment in real estate acquired including any related working capital at fair value of $27,400.

The following table summarizes the aggregate estimated fair value of the assets and liabilities associated with the two properties acquired during the six-month period ended June 30, 2012, on the respective date of each conversion, for the real estate accounted for under FASB ASC Topic 805.

Description	Estimated Fair Value
Assets acquired:
Investments in real estate	$	27,400
Cash and cash equivalents		524
Restricted cash		454
Other assets		1
Total assets acquired		28,379
Liabilities assumed:
Accounts payable and accrued expenses		317
Other liabilities		328
Total liabilities assumed		645
Estimated fair value of net assets acquired	$	27,734

The following table summarizes the consideration transferred to acquire the real estate properties and the amounts of identified assets acquired and liabilities assumed at the respective conversion date:

Description	Estimated Fair Value
Fair value of consideration transferred:
Commercial real estate loans	$	27,400
Other considerations		334
Total fair value of consideration transferred	$	27,734

During the six-month period ended June 30, 2012, these investments contributed revenue of $644 and a net income allocable to common shares of $346. During the six-month period ended June 30, 2012, we did not incur any third-party acquisition-related costs.

Our consolidated unaudited pro forma information, after including the acquisition of real estate properties, is presented below as if the acquisition occurred on January 1, 2011. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods:

Description	For the Six-Month Period Ended June 30, 2012			For the Six-Month Period Ended June 30, 2011
Total revenue, as reported	$	110,592		$	117,142
Pro forma revenue		112,444			119,568
Net income (loss) allocable to common shares, as reported		(113,970	)		(14,331	)
Pro forma net income (loss) allocable to common shares		(113,277	)		(13,581	)

We have not yet completed the process of estimating the fair value of assets acquired and liabilities assumed. Accordingly, our preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as we complete the process. In accordance with FASB ASC Topic 805, changes, if any, to the preliminary estimates and allocation will be reported in our financial statements retrospectively.

Dispositions:

During the six-month period ended June 30, 2012, we did not dispose of any real estate properties.