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REAL ESTATE LOANS RECEIVABLE (Tables)
 9 Months Ended
Sep. 30, 2012
Receivables [Abstract]  
Schedule of Real Estate Loans Receivable
As of September 30, 2012, the Company, through wholly owned subsidiaries, had invested in two real estate loans receivable as set forth below (in thousands):
Loan Name
     Location of Related Property or Collateral
 
Date Acquired/ Originated
 
Property Type
 
Loan Type
 
Outstanding Principal Balance (1)
 
Book Value (2)
 
Contractual Interest Rate (3)
 
Annualized Effective Interest Rate (3)
 
Maturity Date
 
1180 Raymond First Mortgage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Newark, New Jersey
 
03/14/2012
 
Multifamily
 
Non-Performing Mortgage (4)
 
$
55,583

 
$
35,666

 
(4) 
 
(4) 
 
06/01/2018
(4) 
Ponte Palmero First Mortgage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cameron Park, California
 
09/13/2012
 
Retirement Community
 
Mortgage
 
35,865

 
35,368

 
One-Month LIBOR + 10.00% (5)
 
13.2%
 
10/01/2015
 
 
 
 
 
 
 
 
 
$
91,448

 
$
71,034

 
 
 
 
 
 
 
_____________________
(1) Outstanding principal balance as of September 30, 2012 represents original principal balance outstanding under the loan, increased for any subsequent fundings, including interest income deferred until maturity.
(2) Book value of the real estate loans receivable represents outstanding principal balance adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs.
(3) Contractual interest rates are the stated interest rates on the face of the loans. Annualized effective interest rates are calculated as the actual interest income recognized in 2012, using the interest method, divided by the average amortized cost basis of the investment. The annualized effective interest rates and contractual interest rates presented are as of September 30, 2012.
(4) Upon acquisition, the Company did not expect the non-performing mortgage to perform in accordance with its contractual terms, including the repayment of the principal amount outstanding under the loan, the payment of interest at the stated amount on the face of the note or the repayment of the loan upon its maturity date. Accordingly, the Company did not record any interest income relating to this loan during the three months and nine months ended September 30, 2012 and the Company placed the loan on non-accrual status.
(5) As of September 30, 2012, the Ponte Palmero First Mortgage bears interest at a floating rate of 1,000 basis points over one-month LIBOR, but at no point shall the interest rate be less than 11.0%. See “— Recent Transactions - Origination of Ponte Palmero First Mortgage.”
Schedule of Activity Related to Real Estate Loans Receivable
The following summarizes the activity related to the real estate loans receivable for the nine months ended September 30, 2012 (in thousands):
Face value of real estate loans receivable acquired and originated
$
107,083

Discount on purchase price of real estate loans receivable acquired
(28,933
)
Closing costs and origination fees on purchase and origination of real estate loans receivable
305

Early payoff of Primera Court First Mortgage
(7,545
)
Deferred interest receivable and interest accretion
115

Accretion of closing costs and origination fees on real estate loans receivable, net
9

Real estate loans receivable - September 30, 2012
$
71,034
Schedule of Interest Income from Real Estate Loans Receivable
For the three and nine months ended September 30, 2012 and 2011, interest income from real estate loans receivable consisted of the following (in thousands):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
2012
 
2011
Contractual interest income
 
$
196

 
$
32

 
$
196

 
$
311

Interest accretion
 
26

 
—

 
26

 
—

Accretion of closing costs and origination fees, net
 
9

 
—

 
9

 
—

Interest income from real estate loans receivable
 
$
231

 
$
32

 
$
231

 
$
311