REAL ESTATE LOAN RECEIVABLE

6 Months Ended

Jun. 30, 2015

As of June 30, 2015, the Company owned one real estate loan receivable that it had originated. The information for that real estate loan receivable as of June 30, 2015 and December 31, 2014 is set forth below (in thousands):

Loan Name

Location of Related Property or

Collateral

Date Originated

Property Type

Loan Type

Outstanding Principal Balance as of June 30, 2015 ⁽¹⁾

Book Value as of June 30, 2015 ⁽²⁾

Book Value as of December 31, 2014 ⁽²⁾

Contractual Interest Rate ⁽³⁾

Annualized Effective Interest Rate ⁽³⁾

Maturity Date

University House First Mortgage

New York, New York

3/20/2013

Student Housing

Mortgage

27,850

27,422

11.0%

14.2%

06/30/2015

_____________________

⁽¹⁾Outstanding principal balance as of June 30, 2015 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 loan receivable represents outstanding principal balance adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs and additional interest accretion.

⁽³⁾Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method annualized (if applicable) and divided by the average amortized cost basis of the investment. The annualized effective interest rate and contractual interest rate presented are as of June 30, 2015.

On June 30, 2015, the University House First Mortgage matured without repayment. As a result, on July 1, 2015, the Company provided noticed to the borrower of default and may commence foreclosure proceedings on, or otherwise take title to, the property securing the University House First Mortgage. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. The Company considers the collectibility or recoverability of the loan’s principal balance in determining whether to recognize income on impaired loans. With respect to the University House First Mortgage, the Company will continue to recognize interest income on an accrual basis, including the default interest rate of 16%, as the Company believes the recoverability of the outstanding principal balance and unpaid accrued interest is probable. The Company did not record a provision for loan loss reserves during the six months ended June 30, 2015 or 2014.

The following summarizes the activity related to the real estate loan receivable for the six months ended June 30, 2015 (in thousands):



Real estate loan receivable - December 31, 2014	$	27,422
Accretion of closing costs and origination fees on real estate loan receivable, net	428
Real estate loan receivable - June 30, 2015	$	27,850

For the three and six months ended June 30, 2015 and 2014, interest income from the real estate loan receivable consisted of the following (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Contractual interest income	$	774	$	612	$	1,540	$	1,217
Accretion of closing costs, origination fees and extension fees, net	219		105		428		212
Interest income from real estate loan receivable	$	993	$	717	$	1,968	$	1,429