SEGMENT DISCLOSURE

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT DISCLOSURE

16. SEGMENT DISCLOSURE

The Company’s reportable segments during the years ended December 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 Note 2.

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 years ended December 31, 2021 and 2020 is as follows:

	Year Ended December 31,
	2021		2020
	(in thousands)
Office:
Revenues	$	53,289	$	55,468
Property expenses:
Operating	23,431		23,485
General and administrative	347		490
Total property expenses	23,778		23,975
Segment net operating income—office	29,511		31,493
Hotel:
Revenues	17,849		13,314
Property expenses:
Operating	15,841		14,059
General and administrative	128		64
Total property expenses	15,969		14,123
Segment net operating income (loss)—hotel	1,880		(809)
Lending:
Revenues	19,787		8,322
Lending expenses:
Interest expense	408		868
Expense reimbursements to related parties—lending segment	1,921		3,491
General and administrative	1,788		2,006
Total lending expenses	4,117		6,365
Segment net operating income—lending	15,670		1,957
Total segment net operating income	$	47,061	$	32,641

A reconciliation of the Company’s segment net operating income to net income attributable to the Company for the years ended December 31, 2021 and 2020 is as follows: 

	Year Ended December 31,
	2021		2020
	(in thousands)
Total segment net operating income	$	47,061	$	32,641
Interest and other income	1		104
Asset management and other fees to related parties	(9,030)		(9,793)
Expense reimbursements to related parties—corporate	(2,050)		(2,243)
Interest expense	(9,005)		(10,547)
General and administrative	(4,581)		(4,212)
Transaction costs	(143)		—
Depreciation and amortization	(20,112)		(21,406)
Loss on early extinguishment of debt	—		(281)
Impairment of real estate	—		—
Gain on sale of real estate	—		—
Income before provision for income taxes	2,141		(15,737)
(Provision) benefit for income taxes	(2,992)		722
Net (loss) income	(851)		(15,015)
Net loss (income) attributable to noncontrolling interests	1		(1)
Net (loss) income attributable to the Company	$	(850)	$	(15,016)

The condensed assets for each of the segments as of December 31, 2021 and 2020, along with capital expenditures and loan originations for the years ended December 31, 2021 and 2020 are as follows:

	December 31,
	2021		2020
	(in thousands)
Condensed assets:
Office	$	449,843	$	472,544
Hotel	101,308		100,285
Lending	96,729		94,626
Non-segment assets	12,986		18,162
Total assets	$	660,866	$	685,617

	Year Ended December 31,
	2021		2020
	(in thousands)
Capital expenditures (1) and loan originations:
Office	$	5,714	$	8,514
Hotel	193		821
Total capital expenditures	5,907		9,335
Loan originations	133,290		53,524
Total capital expenditures and loan originations	$	139,197	$	62,859

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