SEGMENT DISCLOSURE

3 Months Ended

Mar. 31, 2016

SEGMENT DISCLOSURE

SEGMENT DISCLOSURE

17. 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 properties, as well as a segment for our lending operations, which is held for sale as of March 31, 2016 and 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, 2015 included in our Annual Report on Form 10-K filed with the SEC on March 15, 2016.

        We evaluate the performance of our real estate segments based on net operating income, which is defined as rental and other property income and expense 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 included in continuing operations for the three months ended March 31, 2016 and 2015 is as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Office:
Revenues	$	46,049	$	46,615
Property expenses:
Operating		18,487		19,391
General and administrative		354		313
Total property expenses		18,841		19,704
Segment net operating income—office		27,208		26,911
Hotel:
Revenues		15,283		15,719
Property expenses:
Operating		9,955		10,677
General and administrative		87		41
Total property expenses		10,042		10,718
Segment net operating income—hotel		5,241		5,001
Multifamily:
Revenues		5,058		4,905
Property expenses:
Operating		2,836		2,641
General and administrative		258		83
Total property expenses		3,094		2,724
Segment net operating income—multifamily		1,964		2,181
Total segment net operating income	$	34,413	$	34,093

        A reconciliation of segment net operating income to net income for the three months ended March 31, 2016 and 2015 is as follows:

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Total segment net operating income	$	34,413		$	34,093
Interest expense		(6,626	)		(5,403	)
General and administrative		(1,064	)		(2,155	)
Asset management and other fees to related parties		(7,701	)		(7,209	)
Transaction costs		(149	)		(428	)
Depreciation and amortization		(18,058	)		(19,128	)
Gain on sale of real estate		24,739			—
Income (loss) from continuing operations		25,554			(230	)
Discontinued operations
Income from operations of assets held for sale		1,429			2,962
Net income from discontinued operations		1,429			2,962
Net income		26,983			2,732
Net income attributable to noncontrolling interests		(3	)		—
Net income attributable to stockholders	$	26,980		$	2,732

        The condensed assets for each of the segments as of March 31, 2016 and December 31, 2015, along with capital expenditures and loan originations for the three months ended March 31, 2016 and 2015, are as follows:

	March 31, 2016		December 31, 2015
	(in thousands)
Condensed assets:
Office	$	1,534,059	$	1,520,339
Hotel		163,072		176,735
Multifamily		170,213		171,429
Lending assets held for sale		150,927		128,992
Non-segment assets		87,938		94,565
Total assets	$	2,106,209	$	2,092,060

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Capital expenditures(1):
Office	$	6,653	$	4,164
Hotel		150		457
Multifamily		131		130
Total capital expenditures		6,934		4,751
Loan originations included in assets held for sale		33,777		27,403
Total capital expenditures and loan originations	$	40,711	$	32,154

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