12. FAIR VALUES

Assets Recorded at Fair Value

The following table summarizes our assets measured at fair value on a recurring basis ($ in thousands):


	Level 1		Level 2		Level 3		Fair Value⁽¹⁾
March 31, 2015
Other assets, at fair value⁽¹⁾	$	—	$	1,712	$	49,967	$	51,679
December 31, 2014
Other assets, at fair value⁽¹⁾	$	—	$	2,648	$	47,507	$	50,155

(1)	Other assets include loans, securities, equity investments, and other receivables carried at fair value, as well as derivative financial instruments.

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):


	Three Months Ended March 31,
	2015			2014
January 1,	$	47,507		$	54,461
Proceeds from investments		(15,038	)		(113	)
Adjustments to fair value included in earnings
Unrealized gain (loss) on investments at fair value		17,498			(1,331	)

March 31,	$	49,967		$	53,017

Our other assets include loans, securities, equity investments, and other receivables that are carried at fair value. The following describes the key assumptions used in arriving at the fair value of each of these assets as of March 31, 2015 and December 31, 2014.

Securities: As of March 31, 2015, our securities, which had a book value of $9.9 million, were valued by obtaining assessments from third-party dealers.

Loans: As of March 31, 2015, we had one loan with a fair value of $4.0 million and as of December 31, 2014, we had two loans with an aggregate fair value of $19.0 million. The discount rate used to value the remaining loan was 15% as of both March 31, 2015 and December 31, 2014. The discount rate used to value the loan that was outstanding as of December 31, 2014, but that repaid during 2015, was 7% as of December 31, 2014. A 100 bp discount rate increase would result in a decrease in fair value of 0.9% and 0.5% as of March 31, 2015 and December 31, 2014, respectively.

Equity investments and other receivables: As of March 31, 2015, equity investments and other receivables, which had an aggregate book value of $36.1 million, were generally valued by discounting expected cash flows.

There were no material liabilities recorded at fair value as of March 31, 2015 or December 31, 2014. Refer to Note 2 for further discussion regarding fair value measurement.

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The following table details the carrying amount, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):


	March 31, 2015						December 31, 2014
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	18,474	$	18,474	$	18,474	$	51,810	$	51,810	$	51,810
Restricted cash		26,890		26,890		26,890		11,591		11,591		11,591
Loans receivable, net		4,943,383		4,977,468		4,977,468		4,428,500		4,462,897		4,462,897
Financial liabilities
Revolving repurchase facilities		2,241,630		2,241,630		2,241,630		2,040,783		2,040,783		2,040,783
Asset-specific repurchase agreements		407,203		407,203		407,203		324,553		324,553		324,553
Loan participations sold		708,845		708,845		708,845		499,433		499,433		499,433
Convertible notes, net		162,460		172,500		180,852		161,853		172,500		181,341

Estimates of fair value for cash, cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.