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Loans Receivable (Tables)
 9 Months Ended
Sep. 30, 2014
Receivables [Abstract]  
Summary of Trust's Loans Receivable

The following table summarizes the Trust’s loans receivable at September 30, 2014 and December 31, 2013 (in thousands):

 

                Carrying Amount (1)      Contractual
Maturity 
Date		  

Description

   

Loan Position

    Stated 
Interest Rate at
September 30, 2014		     September 30,
2014		      December 31,
2013		     

Playa Vista / Water’s Edge

    Mezzanine      LIBOR + 15.75 %(3),(4)    $ 34,337       $ 10,327         1/23/15   

Churchill (2)

    Whole Loan      LIBOR + 3.75 %      —           683         6/01/15   

Rockwell

    Mezzanine      12.0 %      —           —           5/01/16   

Pinnacle II

    B-Note      6.31 %      5,001         4,648         9/06/16   

Popiu Shopping Village

    B-Note      6.62 %      2,812         2,058         1/6/17   

Edens Center and Norridge Commons

    Mezzanine      LIBOR + 12 %(3)      17,652         —           3/09/17   

Mentor Building

    Whole Loan      10.0 %      2,512         2,512         9/10/17   

1515 Market

    Whole Loan      —          —           —              (5) 

Hotel Wales

    Whole Loan      —          —           20,101            (6) 

Legacy Orchard

    Corporate Loan      —          —           9,750            (6) 

San Marbeya

    Whole Loan      —          —           28,546            (6) 

500-512 7th Ave

    B-Note      —          —           10,250            (6) 

Wellington Tower

    Mezzanine      —          —           2,991            (6) 

Queensridge

    Whole Loan      —          —           2,942            (7) 

The Shops at Wailea

    B-Note      —          —           6,292            (7) 
       

 

 

     

 

 

     
        $ 62,314       $ 101,100      
       

 

 

     

 

 

     

 

(1) The carrying amount at September 30, 2014 represents the estimated amount expected to be collected on disposition of the loan. The carrying amount at December 31, 2013 represents the loan balance under the going concern basis of accounting.
(2) The Trust determined that this loan receivable is a variable interest in a VIE primarily based on the fact that the underlying entity does not have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support. The Trust does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance and is not required to consolidate the underlying entity.
(3) LIBOR floor of 0.5%.
(4) Carrying amount includes the additional portion of the loan acquired July 7, 2014. See Note 7 – Acquisition and Disposition Activity for details on the purchase.
(5) This loan was in maturity default at the time of acquisition. The loan was modified on February 1, 2013. The Trust consolidates the operations of the borrower entity and the loan receivable is eliminated in consolidation.
(6) These loans were sold to an independent third party in February 2014. See Note 7 - Acquisition and Disposition Activity for details on the sale.
(7) The loan was satisfied during the nine months ended September 30, 2014.
Activity Related to Loans Receivable

Activity related to loans receivable is as follows (in thousands):

 

     Nine Months Ended
September 30, 2014		  

Balance at January 1, 2014

    $ 101,100   

Purchase and advances

      35,992   

Interest (received) accrued, net

      (81 ) 

Repayments/sale proceeds/forgiveness

      (81,739 ) 

Loan discount accretion

      2,086   

Discount accretion received in cash

      (5,865 ) 

Liquidation adjustment

      6,071   

Change in liquidation value

      4,750   
  

 

 

  

Balance at September 30, 2014

    $ 62,314   
  

 

 

  

Interest, Dividend and Discount Accretion Income

The following table summarizes the Trust’s interest, dividend and discount accretion income for the one and seven months ended July 31, 2014 and the three and nine months ended September 30, 2013 (in thousands):

 

     One Month
Ended		      Three Months
Ended		      Seven Months
Ended		      Nine Months
Ended		  
     July 31, 2014      September 30, 2013      July 31, 2014      September 30, 2013  

Interest on loan assets

    $ 899       $ 3,011       $ 5,770       $ 10,912   

Exit fee/prepayment penalty

      —           —           1,787         —     

Accretion of loan discount

      495         806         2,086         2,283   

Interest and dividends on REIT securities

      —           100         —           350   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total interest, dividends, and discount accretion

    $ 1,394       $ 3,917       $ 9,643       $ 13,545   
  

 

 

     

 

 

     

 

 

     

 

 

  

 
Loans Receivable by Internal Credit Rating

The table below summarizes the Trust’s loans receivable by internal credit rating at September 30, 2014 and December 31, 2013 (in thousands, except for number of loans):

 

     September 30, 2014      December 31, 2013  

Internal Credit Quality

    Number of
Loans		      Liquidation Value
of Loans
Receivable		      Number
of Loans		      Carrying Value
of Loans
Receivable		  

Greater than zero

      5       $ 27,977         11       $ 90,773   

Equal to zero

      1         34,337         1         10,327   

Less than zero

      1         —           1         —     
  

 

 

     

 

 

     

 

 

     

 

 

  
     7       $ 62,314         13       $ 101,100