REAL ESTATE LOANS RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of Real Estate Loans Receivable

As of March 31, 2013 and December 31, 2012, the Company, through wholly owned subsidiaries, had invested in or originated three 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 as of March 31, 2013 ⁽¹⁾

Book Value as of March 31, 2013 ⁽²⁾

Book Value as of December 31, 2012 ⁽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

35,690

35,678

⁽⁴⁾

06/01/2018

⁽⁴⁾

Ponte Palmero First Mortgage

Cameron Park, California

09/13/2012

Retirement Community

Mortgage

36,743

37,129

36,228

One-Month LIBOR + 10.00% ⁽⁵⁾

15.7%

10/01/2015

University House First Mortgage

New York, New York

03/20/2013

Student Housing Facility

Mortgage

22,000

21,593

—

11.0%

13.0%

04/01/2014

114,326

94,412

71,906

_____________________

⁽¹⁾Outstanding principal balance as of March 31, 2013 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 2013, using the interest method annualized (if applicable) and divided by the average amortized cost basis of the investment. The annualized effective interest rates and contractual interest rates presented are as of March 31, 2013.

⁽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 ended March 31, 2013 and 2012 and the Company placed the loan on non-accrual status.

⁽⁵⁾Under the terms of the Ponte Palmero First Mortgage, the loan bears interest as follows: a floating rate of 1,000 basis points over one-month LIBOR during the first 12 months of the term of the loan, but at no point shall the interest rate be less than 11.0%; a floating rate of 1,200 basis points over one-month LIBOR during the 13th through 24th months of the term of the loan, but at no point shall the interest rate be less than 13.0%; a floating rate of 1,700 basis points over one-month LIBOR, during the 25th through 36th months of the term of the loan, but at no point shall the interest rate be less than 18.0%. The borrower is required to make monthly interest payments equal to a base interest rate of 500 basis points over one-month LIBOR, but at no point shall the base interest rate be less than 6.0%. The outstanding principal balance, accrued interest and the deferred interest, which shall accrue monthly but may not be compounded, are due at maturity. During the three months ended March 31, 2013, the Company recognized $1.4 million of interest income from its investment in the Ponte Palmero First Mortgage Loan, including $0.4 million of the contractual interest that is deferred until maturity.

Schedule of Activity Related to Real Estate Loans Receivable

The following summarizes the activity related to the real estate loans receivable for the three months ended March 31, 2013 (in thousands):



Real estate loans receivable - December 31, 2012	$	71,906
Face value of real estate loan receivable originated	22,000
Closing costs and origination fees on origination of real estate loan receivable	(406		)
Deferred interest receivable and interest accretion	856
Accretion of closing costs and origination fees on real estate loans receivable, net	56
Real estate loans receivable - March 31, 2013	$	94,412

Schedule of Interest Income from Real Estate Loans Receivable

For the three months ended March 31, 2013 and 2012, interest income from real estate loans receivable consisted of the following (in thousands):



	Three Months Ended March 31,
	2013		2012
Contractual interest income	$	1,064	$	—
Interest accretion	409		—
Accretion of closing costs and origination fees, net	56		—
Interest income from real estate loans receivable	$	1,529	$	—