Investment Securities, at Fair Value

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities, at Fair Value

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 June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments in real estate fund	$	1,621	$	270	$	—		$	1,891
CMBS	208,584		8,775		(46		)	217,313
Total	$	210,205	$	9,045	$	(46	)	$	219,204

	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. As of June 30, 2014, the Company owned 25 CMBS with an estimated aggregate fair value of $217.3 million. As of June 30, 2014, certain of these securities were pledged as collateral under repurchase agreements (the “Repurchase Agreements”), as discussed in Note 12 — Other Debt. As of December 31, 2013, the Company owned 10 CMBS with an estimated aggregate fair value of $60.6 million.

As of June 30, 2014, the fair value of one CMBS was below its amortized cost by approximately $46,000. The Company evaluated each of the securities for other-than-temporary impairment at June 30, 2014, and determined that no other-than-temporary impairment charges on its securities were appropriate. The Company believes that none of the unrealized losses on investment securities are other-than-temporary because management expects the Company will receive all contractual principal and interest related to these investments. In addition, the Company is not required, and does not intend, to sell these securities.

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

	June 30, 2014
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	1,202		1,237
Due after five years through ten years	178,922		186,042
Due after ten years	28,460		30,034
	$	208,584	$	217,313

Investment in Real Estate Fund

As of June 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 is accounted for under the equity method of accounting because the Company has significant influence but not control.