SEGMENT DISCLOSURE

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT DISCLOSURE

15. SEGMENT DISCLOSURE

The Company’s reportable segments during the three months ended March 31, 2021 and 2020 consist of two types of commercial real estate properties, namely, office and hotel, as well as a segment for the Company’s lending business. Management internally evaluates the operating performance and financial results of the segments based on net operating income. The Company also has certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments. The reportable segments are accounted for on the same basis of accounting as described in the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2021.

For the Company’s real estate segments, the Company defines net operating income (loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes. For the Company’s lending segment, the Company defines net operating income as interest income net of interest expense and general overhead expenses.

The net operating income (loss) of the Company’s segments for the three months ended March 31, 2021 and 2020 is as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Office:
Revenues	$	13,527	$	14,897
Property expenses:
Operating	5,655		6,046
General and administrative	85		98
Total property expenses	5,740		6,144
Segment net operating income—office	7,787		8,753
Hotel:
Revenues	1,878		8,253
Property expenses:
Operating	2,635		6,469
General and administrative	50		13
Total property expenses	2,685		6,482
Segment net operating (loss) income—hotel	(807)		1,771
Lending:
Revenues	3,474		2,384
Lending expenses:
Interest expense	191		291
Expense reimbursements to related parties—lending segment	731		682
General and administrative	446		400
Total lending expenses	1,368		1,373
Segment net operating income—lending	2,106		1,011
Total segment net operating income	$	9,086	$	11,535

A reconciliation of segment net operating income to net income attributable to the Company for the three months ended March 31, 2021 and 2020 is as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Total segment net operating income	$	9,086	$	11,535
Interest and other income	—		1
Asset management and other fees to related parties	(2,259)		(2,645)
Expense reimbursements to related parties—corporate	(605)		(812)
Interest expense	(2,441)		(2,876)
General and administrative	(2,041)		(1,223)
Depreciation and amortization	(5,037)		(5,258)
Loss before provision for income taxes	(3,297)		(1,278)
(Provision) benefit for income taxes	(374)		22
Net loss	(3,671)		(1,256)
Net loss (income) attributable to noncontrolling interests	1		(4)
Net loss attributable to the Company	$	(3,670)	$	(1,260)

The condensed assets for each of the segments as of March 31, 2021 and December 31, 2020, along with capital expenditures and loan originations for the three months ended March 31, 2021 and 2020, are as follows (in thousands):

	March 31, 2021		December 31, 2020
Condensed assets:
Office	$	462,547	$	472,544
Hotel	100,902		100,285
Lending	101,242		94,626
Non-segment assets	21,192		18,162
Total assets	$	685,883	$	685,617

	Three Months Ended March 31,
	2021		2020
Capital expenditures (1):
Office	$	292	$	4,534
Hotel	28		294
Total capital expenditures	320		4,828
Loan originations	25,593		11,844
Total capital expenditures and loan originations	$	25,913	$	16,672

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(1)Represents additions and improvements to real estate investments, excluding acquisitions. Includes the activity for dispositions through their respective disposition dates.