SEGMENT DISCLOSURE

6 Months Ended

Jun. 30, 2015

SEGMENT DISCLOSURE

SEGMENT DISCLOSURE

16. SEGMENT DISCLOSURE

        In accordance with ASC Topic 280,Segment Reporting, our reportable segments consist of three types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for our lending operations, which is held for sale as of June 30, 2015. Management internally evaluates the operating performance and financial results of the segments based on net operating income. We also have 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 our audited consolidated financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 16, 2015.

        We evaluate the performance of our real estate segments based on net operating income, which is defined as rental and other property income and tenant reimbursements less property and related expenses, and excludes nonproperty income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, and transaction costs.

        The net operating income of our reportable segments is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in thousands)
Office:
Revenues	$	47,084	$	45,181	$	93,699	$	88,455
Property expenses:
Operating		20,060		17,933		39,451		35,586
General and administrative		113		76		426		392
Total property expenses		20,173		18,009		39,877		35,978
Segment net operating income—office		26,911		27,172		53,822		52,477
Hotel:
Revenues		15,822		14,798		31,541		29,137
Property expenses:
Operating		9,987		9,923		20,664		19,769
General and administrative		38		36		79		73
Total property expenses		10,025		9,959		20,743		19,842
Segment net operating income—hotel		5,797		4,839		10,798		9,295
Multifamily:
Revenues		4,013		5,208		8,918		10,192
Property expenses:
Operating		2,938		2,583		5,579		4,670
General and administrative		90		54		173		79
Total property expenses		3,028		2,637		5,752		4,749
Segment net operating income—multifamily		985		2,571		3,166		5,443
Total segment net operating income	$	33,693	$	34,582	$	67,786	$	67,215

        A reconciliation of segment net operating income to net income is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Total segment net operating income	$	33,693		$	34,582		$	67,786		$	67,215
Interest		(5,586	)		(4,565	)		(10,989	)		(8,602	)
General and administrative		(1,714	)		(2,191	)		(3,869	)		(2,587	)
Asset management fees and other fees to related parties		(7,456	)		(6,338	)		(14,665	)		(12,075	)
Transaction costs		(373	)		(32	)		(801	)		(500	)
Depreciation and amortization		(17,566	)		(17,286	)		(36,694	)		(33,915	)
Bargain purchase gain		—			—			—			4,918
Income from continuing operations		998			4,170			768			14,454
Discontinued operations
Income from operations of assets held for sale		3,984			4,344			6,946			5,277
Net income from discontinued operations		3,984			4,344			6,946			5,277
Net income		4,982			8,514			7,714			19,731
Net income attributable to noncontrolling interests		(6	)		(115	)		(6	)		(113	)
Net income attributable to stockholders	$	4,976		$	8,399		$	7,708		$	19,618

        The condensed assets for each of the segments as of June 30, 2015 and December 31, 2014, along with capital expenditures and loan originations for the six months ended June 30, 2015 and 2014, are as follows:

	June 30, 2015		December 31, 2014
	(in thousands)
Condensed assets:
Office	$	1,517,155	$	1,534,610
Hotel		177,284		174,679
Multifamily		170,241		171,226
Lending assets held for sale		217,418		208,799
Non-segment assets		8,690		5,368
Total assets	$	2,090,788	$	2,094,682

	Six Months Ended June 30,
	2015		2014
	(in thousands)
Capital expenditures(1):
Office	$	14,200	$	11,428
Hotel		738		721
Multifamily		882		429
Total capital expenditures		15,820		12,578
Loan originations included in assets held for sale		41,121		25,191
Total capital expenditures and loan originations	$	56,941	$	37,769

(1)           Represents additions and improvements to real estate investments, excluding acquisitions.