SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company presently operates in two reportable business segments based on its investment types: real estate and real estate-related. Under the real estate segment, the Company has invested in office properties. Under the real estate-related segment, the Company has originated a mortgage loan. All revenues earned from the Company’s two reporting segments were from external customers and there were no intersegment sales or transfers. The Company does not allocate corporate-level accounts to its reporting segments. Corporate-level accounts include corporate general and administrative expenses, non-operating interest income, non-operating interest expense and other corporate-level expenses. The accounting policies of the segments are consistent with those described in Note 2, “Summary of Significant Accounting Policies.”

The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its real estate segment as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees and provision for bad debt) less interest expense. The Company defines NOI for its real estate-related segment as interest income less loan servicing costs and asset management fees. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, real estate acquisition fees and expenses and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments and to make decisions about resource allocations. The Company believes that net income is the GAAP measure that is most directly comparable to NOI; however, NOI should not be considered as an alternative to net income as the primary indicator of operating performance, as it excludes the items described above. Additionally, NOI as defined above may not be comparable to other REITs or companies as their definitions of NOI may differ from the Company’s definition.

The following table summarizes total revenues and NOI for each reportable segment for the years ended     December 31, 2013, 2012 and 2011 (in thousands):

	Years Ended December 31,
	2013		2012		2011
Revenues:
Real estate segment	$	79,341	$	26,394	$	2,117
Real estate-related segment	1,082		889		395
Total segment revenues	$	80,423	$	27,283	$	2,512
Interest Expense:
Real estate segment	$	9,609	$	3,465	$	300
Real estate-related segment	—		—		—
Total segment interest expense	9,609		3,465		300
Corporate-level	142		103		—
Total interest expense	$	9,751	$	3,568	$	300
NOI:
Real estate segment	$	30,181	$	10,795	$	967
Real estate-related segment	976		802		332
Total NOI	$	31,157	$	11,597	$	1,299

The following table summarizes total assets and total liabilities for each reportable segment as of December 31, 2013 and 2012 (in thousands):

	December 31,
	2013		2012
Assets:
Real estate segment	$	1,273,231	$	317,133
Real estate-related segment	17,339		13,811
Total segment assets	1,290,570		330,944
Corporate-level (1)	20,824		18,440
Total assets	$	1,311,394	$	349,384
Liabilities:
Real estate segment	$	792,029	$	135,082
Real estate-related segment	—		2
Total segment liabilities	792,029		135,084
Corporate-level (2)	4,134		2,275
Total liabilities	$	796,163	$	137,359

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⁽¹⁾ Total corporate-level assets consisted primarily of proceeds from the Offering being held in the form of cash and cash equivalents of approximately $19.8 million and $18.2 million as of December 31, 2013 and 2012, respectively.

⁽²⁾ As of December 31, 2013 and 2012, corporate-level liabilities consisted primarily of distributions payable and accruals for general and administrative expenses.

The following table reconciles the Company’s net loss to its NOI for the years ended December 31, 2013, 2012 and 2011 (in thousands):

	Years Ended December 31,
	2013			2012			2011
Net loss	$	(21,637	)	$	(7,682	)	$	(2,440	)
Other interest income	(62		)	(28		)	(15		)
Real estate acquisition fees to affiliates	9,423			2,296			836
Real estate acquisition fees and expenses	5,677			1,069			432
General and administrative expenses	2,234			1,974			1,386
Depreciation and amortization	35,380			13,865			1,100
Corporate-level interest expense	142			103			—
NOI	$	31,157		$	11,597		$	1,299