Loans Held for Investment

12 Months Ended

Dec. 31, 2015

Unsecured Note Reserve

During the three months ended December 31, 2015, the Company assessed the collectability of an unsecured note held with an affiliate of the Former Manager after December’s debt service payment was not paid. The Company assessed the liquidity of the borrower, the lien position of the note and the other obligations of the borrower. Based on the analysis, the Company concluded that it was unlikely that the unsecured note will be repaid and recorded a reserve for loan loss equal to the $15.3 million carrying value of the note for the three months ended December 31, 2015.

Mortgage Notes Receivable

As of December 31, 2015, the Company owned 10 mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 13.7 years. The following table details the mortgage notes receivable as of December 31, 2015 (dollar amounts in thousands):



Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	26,115	$	24,238	5.6	%	–	7.2%	March 2016	–	January 2033

The Company’s mortgage notes receivable are comprised primarily of fully-amortizing or nearly fully-amortizing first mortgage loans. The Company has one mortgage note receivable where the Company does not receive monthly payments of principal and interest but rather the interest is capitalized into the outstanding balance that is due at maturity. The mortgage notes receivable are primarily on commercial real estate, each leased to a single tenant. Therefore, the Company’s monitoring of the credit quality of its mortgage notes receivable is focused primarily on an analysis of the tenant, including review of tenant quality and ratings, trends in the tenant’s industry and general economic conditions and an analysis of measures of collateral coverage, such as an estimate of the loan-to-value ratio (principal amount outstanding divided by the estimated value of the property) and its remaining term until maturity.

The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to December 31, 2015 (in thousands):



	Outstanding Balance
Due within one year	$	1,307
Due after one year through five years	5,339
Due after five years through 10 years	6,632
Due after 10 years⁽¹⁾	16,668
Total	$	29,946

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(1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to December 31, 2015.