Investment Securities, at Fair Value

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities, at Fair Value

Note 8 — Investment Securities, at Fair Value

Investment securities are considered available-for-sale and, therefore, increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income (loss) as a component of equity on the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired at which time the losses are reclassified to expense.

The following tables detail the unrealized gains and losses on investment securities as of September 30, 2014 and December 31, 2013 (in thousands):

	September 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
CMBS		56,908		2,169		—		59,077
Total	$	56,908	$	2,169	$	—	$	59,077

	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments in real estate fund	$	1,589	$	—	$	(105	)	$	1,484
CMBS		60,452		498		(367	)		60,583
Total	$	62,041	$	498	$	(472	)	$	62,067

CMBS

In connection with the Cole Merger, the Company acquired 15 CMBS with an estimated aggregate fair value of $151.2 million as of the Cole Acquisition Date. On September 29, 2014, the Company sold the 15 CMBS acquired in the Cole Merger for proceeds of $158.0 million, and recorded a gain of $6.2 million which is included in Gain (loss) on sale of investments in the accompanying consolidated statements of operations. In connection with the sale, the Company settled the outstanding repurchase agreements that were secured by a portion of the CMBS. See Note 13 — Other Debt for further discussion. As of September 30, 2014, the Company owned 10 CMBS with an estimated aggregate fair value of $59.1 million. As of December 31, 2013, the Company owned 10 CMBS with an estimated aggregate fair value of $60.6 million.

The scheduled maturity of the Company’s CMBS as of September 30, 2014 is as follows (in thousands):

	September 30, 2014
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years		1,075		1,104
Due after five years through 10 years		38,144		39,696
Due after 10 years		17,689		18,277
	$	56,908	$	59,077

Investment in Real Estate Fund

Prior to September 30, 2014, the Company had investments in a real estate fund that is sponsored by an affiliate of the Former Manager of the Company and which invests primarily in equity securities of other publicly traded REITs. This investment was accounted for under the equity method of accounting because the Company had significant influence but not control. During the three months ended September 30, 2014, the Company sold the investments and recorded a gain on the sale of the securities of approximately $178,000, which is included in the Gain (loss) on sale of investments in the accompanying consolidated statements of operations.