Commercial Mortgage Residual Interests

12 Months Ended

Dec. 31, 2017

Commercial Mortgage Residual Interests [Abstract]

Commercial Mortgage Residual Interests

Commercial Mortgage Residual Interests:

As of December 31, 2015, NNN held the commercial mortgage residual interests (“Residuals”) from seven loan securitizations. In 2016, the loan servicer of five of the securitizations exercised its clean-up call option. These clean-up calls allowed the servicers to purchase all of the trusts’ assets, thereby terminating future cash distributions payable to NNN as the holder of these residual interests. During the years ended December 31, 2016 and 2015, NNN recorded an other than temporary valuation impairment of $6,830,000 and $531,000, respectively, as a reduction of earnings from operations. The other than temporary valuation impairment recorded during the year ended December 31, 2016 related to the execution of the clean-up call option on the five securitizations, as well as the fair value adjustment on the remaining two securitizations. As of December 31, 2017 and 2016, the remaining two Residuals are recorded at a fair value of $36,000 and included in Other Assets on the Consolidated Balance Sheets. There was no other than temporary valuation impairment recorded during the year ended December 31, 2017.