Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Ares Commercial Real Estate Corp | |
Entity Central Index Key | 1,529,377 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 28,582,690 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents ($8 related to consolidated VIEs as of December 31, 2016) | $ 5,723 | $ 47,270 |
Restricted cash | 379 | 375 |
Loans held for investment ($341,158 and $21,514 related to consolidated VIEs, respectively) | 1,641,435 | 1,313,937 |
Other assets ($857 and $203 of interest receivable related to consolidated VIEs, respectively) | 15,033 | 12,121 |
Total assets | 1,662,570 | 1,373,703 |
LIABILITIES | ||
Secured funding agreements | 809,737 | 780,713 |
Secured term loan | 151,112 | 149,878 |
Collateralized loan obligation securitization debt (consolidated VIE) | 270,759 | 0 |
Due to affiliate | 2,625 | 2,699 |
Dividends payable | 7,718 | 7,406 |
Other liabilities ($352 of interest payable related to consolidated VIEs as of June 30, 2017) | 3,637 | 3,334 |
Total liabilities | 1,245,588 | 944,030 |
Commitments and contingencies (Note 5) | ||
EQUITY | ||
Common stock, par value $0.01 per share, 450,000,000 shares authorized at June 30, 2017 and December 31, 2016, and 28,582,690 and 28,482,756 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 283 | 283 |
Additional paid-in capital | 420,251 | 420,056 |
Accumulated deficit | (3,552) | (1,310) |
Total stockholders' equity | 416,982 | 419,029 |
Non-controlling interests in consolidated VIEs | 0 | 10,644 |
Total equity | 416,982 | 429,673 |
Total liabilities and equity | $ 1,662,570 | $ 1,373,703 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Cash and cash equivalents related to consolidated VIE | $ 0 | $ 8 |
Loans held for investment related to consolidated VIE | 341,158 | 21,514 |
Other assets, interest receivable related to consolidated VIE | 857 | 203 |
Other liabilities, interest payable related to consolidated VIE | $ 352 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 28,582,690 | 28,482,756 |
Common stock, shares outstanding | 28,582,690 | 28,482,756 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net interest margin: | ||||
Interest income from loans held for investment | $ 22,643 | $ 18,929 | $ 43,770 | $ 37,679 |
Interest expense | (12,232) | (8,415) | (23,020) | (16,940) |
Net interest margin | 10,411 | 10,514 | 20,750 | 20,739 |
Expenses: | ||||
Management and incentive fees to affiliate | 1,654 | 1,338 | 3,466 | 2,690 |
Professional fees | 428 | 535 | 819 | 1,025 |
General and administrative expenses | 640 | 686 | 1,282 | 1,409 |
General and administrative expenses reimbursed to affiliate | 949 | 660 | 1,897 | 1,557 |
Total expenses | 3,671 | 3,219 | 7,464 | 6,681 |
Income from continuing operations before income taxes | 6,740 | 7,295 | 13,286 | 14,058 |
Income tax expense, including excise tax | 27 | 3 | 95 | 7 |
Net income from continuing operations | 6,713 | 7,292 | 13,191 | 14,051 |
Net income from operations of discontinued operations, net of income taxes | 0 | 2,689 | 0 | 2,355 |
Net income attributable to ACRE | 6,713 | 9,981 | 13,191 | 16,406 |
Less: Net income attributable to non-controlling interests | 0 | (1,288) | (25) | (2,577) |
Net income attributable to common stockholders | $ 6,713 | $ 8,693 | $ 13,166 | $ 13,829 |
Basic earnings per common share: | ||||
Continuing operations (in dollars per share) | $ 0.24 | $ 0.21 | $ 0.46 | $ 0.40 |
Discontinued operations held for sale (in dollars per share) | 0 | 0.09 | 0 | 0.08 |
Net income per common share (in dollars per share) | 0.24 | 0.31 | 0.46 | 0.49 |
Diluted earnings per common share: | ||||
Continuing operations (in dollars per share) | 0.24 | 0.21 | 0.46 | 0.40 |
Discontinued operations held for sale (in dollars per share) | 0 | 0.09 | 0 | 0.08 |
Net income per common share (in dollars per share) | $ 0.24 | $ 0.31 | $ 0.46 | $ 0.48 |
Weighted average number of common shares outstanding: | ||||
Basic weighted average shares of common stock outstanding (in shares) | 28,475,853 | 28,428,703 | 28,472,356 | 28,479,015 |
Diluted weighted average shares of common stock outstanding (in shares) | 28,546,624 | 28,495,833 | 28,514,867 | 28,548,944 |
Dividends declared per share of common stock (in dollars per share) | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Non-Controlling Interests |
Beginning Balance at Dec. 31, 2016 | $ 429,673 | $ 283 | $ 420,056 | $ (1,310) | $ 419,029 | $ 10,644 |
Beginning Balance (in shares) at Dec. 31, 2016 | 28,482,756 | 28,482,756 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 99,934 | |||||
Stock‑based compensation | $ 195 | 195 | 195 | |||
Net income | 13,191 | 13,166 | 13,166 | 25 | ||
Dividends declared | (15,408) | (15,408) | (15,408) | |||
Contributions from non-controlling interests | 12 | 12 | ||||
Distributions to non-controlling interests | (10,681) | (10,681) | ||||
Ending Balance at Jun. 30, 2017 | $ 416,982 | $ 283 | $ 420,251 | $ (3,552) | $ 416,982 | $ 0 |
Ending Balance (in shares) at Jun. 30, 2017 | 28,582,690 | 28,582,690 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | ||
Net income | $ 13,191 | $ 16,406 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities (inclusive of amounts related to discontinued operations): | ||
Amortization of deferred financing costs | 3,923 | 3,150 |
Change in mortgage banking activities | 0 | (6,444) |
Change in fair value of mortgage servicing rights | 0 | 3,895 |
Accretion of deferred loan origination fees and costs | (2,640) | (2,013) |
Provision for loss sharing | 0 | (289) |
Originations of mortgage loans held for sale | 0 | (282,625) |
Sale of mortgage loans held for sale to third parties | 0 | 261,499 |
Stock-based compensation | 195 | 269 |
Depreciation expense | 0 | 112 |
Deferred tax expense | 0 | 682 |
Changes in operating assets and liabilities: | ||
Restricted cash | (4) | 1,350 |
Other assets | (1,702) | 39,681 |
Due to affiliate | (74) | (135) |
Other liabilities | 151 | (2,118) |
Net cash provided by (used in) operating activities | 13,040 | 33,420 |
Investing activities: | ||
Issuance of and fundings on loans held for investment | (421,833) | (196,108) |
Principal repayment of loans held for investment | 92,266 | 229,447 |
Receipt of origination fees | 4,709 | 610 |
Purchases of other assets | 0 | (352) |
Net cash provided by (used in) investing activities | (324,858) | 33,597 |
Financing activities: | ||
Proceeds from secured funding agreements | 376,115 | 438,721 |
Repayments of secured funding agreements | (347,091) | (359,702) |
Payment of secured funding costs | (5,914) | (1,458) |
Proceeds from issuance of debt of consolidated VIEs | 272,927 | 0 |
Repayments of debt of consolidated VIEs | 0 | (150,281) |
Proceeds from warehouse lines of credit | 0 | 332,703 |
Repayments of warehouse lines of credit | 0 | (311,078) |
Repurchase of common stock | 0 | (1,436) |
Dividends paid | (15,097) | (14,582) |
Contributions from non-controlling interests | 12 | 4 |
Distributions to non-controlling interests | (10,681) | (2,592) |
Net cash provided by (used in) financing activities | 270,271 | (69,701) |
Change in cash and cash equivalents | (41,547) | (2,684) |
Cash and cash equivalents of continuing operations, beginning of period | 47,270 | 5,066 |
Cash and cash equivalents of discontinued operations, beginning of period | 0 | 3,929 |
Cash and cash equivalents, end of period | 5,723 | 6,311 |
Cash and cash equivalents of continuing operations, end of period | 5,723 | 5,309 |
Cash and cash equivalents of discontinued operations, end of period | $ 0 | $ 1,002 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Commercial Real Estate Corporation (together with its consolidated subsidiaries, the “Company” or “ACRE”) is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. Through Ares Commercial Real Estate Management LLC (“ACREM” or the Company’s “Manager”), a Securities and Exchange Commission (“SEC”) registered investment adviser and a subsidiary of Ares Management, L.P. (NYSE: ARES) (“Ares Management”), a publicly traded, leading global alternative asset manager, it has investment professionals strategically located across the United States and Europe who directly source new loan opportunities for the Company with owners, operators and sponsors of commercial real estate (“CRE”) properties. The Company was formed and commenced operations in late 2011. The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in May 2012. The Company is externally managed by its Manager, pursuant to the terms of a management agreement (the “Management Agreement”). The Company is primarily focused on directly originating and managing a diversified portfolio of CRE debt-related investments for the Company’s own account. The Company’s target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investments, including commercial mortgage backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. On June 28, 2016, the Company entered into a Purchase and Sale Agreement (as amended, the “Agreement”) with Barings Real Estate Advisers LLC (formerly known as Cornerstone Real Estate Advisers LLC), a Delaware limited liability company (the “Buyer”), to sell ACRE Capital Holdings LLC (“TRS Holdings”), the holding company that owned the Company’s mortgage banking subsidiary, ACRE Capital LLC (“ACRE Capital”). Under the terms and subject to the conditions set forth in the Agreement, on September 30, 2016, the Buyer purchased from the Company all of the outstanding common units of TRS Holdings (the “ACRE Capital Sale”). ACRE Capital primarily originated, sold and serviced multifamily and senior-living related loans under programs offered by government-sponsored enterprises and by government agencies. Under the terms of the Agreement, the Buyer paid approximately $93 million in cash as consideration for the ACRE Capital Sale. The Company has elected and qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2012. The Company generally will not be subject to U.S. federal income taxes on its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to the extent that it annually distributes all of its REIT taxable income to stockholders and complies with various other requirements as a REIT. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and the related management's discussion and analysis of financial condition and results of operations included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. Refer to the Company’s Annual Report on Form 10-K for a description of the Company’s recurring accounting policies. The Company has included disclosure below regarding basis of presentation and other accounting policies that (i) are required to be disclosed quarterly or (ii) the Company views as critical as of the date of this report. Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. Interim financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2017 . Discontinued Operations As discussed in Note 1 included in these consolidated financial statements, the Company completed the ACRE Capital Sale on September 30, 2016. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-20, Presentation of Financial Statements - Discontinued Operations , defines the criteria required for a disposal transaction to qualify for reporting as a discontinued operation. The Company determined that the ACRE Capital Sale met the criteria for discontinued operations. As a result, the operating results of ACRE Capital, which formerly comprised the Mortgage Banking segment, are presented separately in the Company’s consolidated financial statements as discontinued operations for the three and six months ended June 30, 2016 . The operating results of discontinued operations are included in the line item “Net income from operations of discontinued operations, net of income taxes” in the consolidated statements of operations for the three and six months ended June 30, 2016 . Summarized financial information for the discontinued Mortgage Banking segment is shown in Note 13 included in these consolidated financial statements. Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 12 included in these consolidated financial statements for further discussion of the Company’s VIEs. Reclassifications The Company presents, in discontinued operations, the results of operations that have been disposed of for which the disposition represents a strategic shift that has or will have a significant effect on the Company's operations and financial results. As a result of this presentation, retroactive reclassifications that change prior period numbers have been made. See Notes 1 and 13 included in these consolidated financial statements for further discussion of the sale of the Mortgage Banking segment. Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired. Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, the Company will record an allowance to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate. Each loan classified as held for investment is evaluated for impairment on a quarterly basis. Loans are collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. As of June 30, 2017 and December 31, 2016 , the Company did not recognize any impairment charges with respect to its loans held for investment. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Preferred equity investments, which are subordinate to any loans but senior to common equity, are accounted for as loans held for investment and are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired, and are included within loans held for investment in the Company’s consolidated balance sheets. The Company accretes or amortizes any discounts or premiums over the life of the related loan held for investment utilizing the effective interest method. Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the terms of the respective debt instrument. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements) are included within other assets and both (ii) the Secured Term Loan (defined in Note 4 included in these consolidated financial statements) and (iii) debt securitizations are included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. Revenue Recognition Interest income from loans held for investment is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income from loans held for investment over the initial loan term as a yield adjustment using the effective interest method. A reconciliation of the Company's interest income from loans held for investment, excluding non-controlling interests, to the Company's interest income from loans held for investment as included within its consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 is as follows ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Interest income from loans held for investment, excluding non-controlling interests $ 22,643 $ 17,640 $ 43,735 $ 35,101 Interest income from non-controlling interest investment held by third parties — 1,289 35 2,578 Interest income from loans held for investment $ 22,643 $ 18,929 $ 43,770 $ 37,679 Net Interest Margin and Interest Expense Net interest margin within the consolidated statements of operations serves to measure the performance of the Company's loans held for investment as compared to its use of debt leverage. The Company includes interest income from its loans held for investment and interest expense related to its Secured Funding Agreements, securitizations debt and the Secured Term Loan (individually defined in Note 4 included in these consolidated financial statements) in net interest margin. For the three and six months ended June 30, 2017 and 2016 , interest expense is comprised of the following ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Secured funding agreements and securitizations debt $ 8,855 $ 6,657 $ 16,323 $ 13,425 Secured term loan 3,377 1,758 6,697 3,515 Interest expense $ 12,232 $ 8,415 $ 23,020 $ 16,940 Comprehensive Income For the three and six months ended June 30, 2017 and 2016 , comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) . Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations , which clarifies the guidance in ASU No. 2014-09 and has the same effective date as the original standard. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , an update on identifying performance obligations and accounting for licenses of intellectual property. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which includes amendments for enhanced clarification of the guidance. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Revenue from Contracts with Customers (Topic 606) , the amendments in this update are of a similar nature to the items typically addressed in the technical corrections and improvements project. Additionally, in February 2017, the FASB issued ASU No. 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , an update on clarifying that a financial asset is within the scope of Subtopic 610-20 if it is deemed an “in-substance non-financial asset.” The application of this guidance is not expected to have a material impact on the Company’s consolidated financial statements, primarily because the majority of the Company’s revenue is accounted for under FASB ASC Topic 310, Receivables , which is scoped out of this standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted after December 15, 2018, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues and clarifies that in the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) . The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The adoption of this ASU will impact the presentation of the statement of cash flows, as well as require additional footnote disclosure to reconcile the balance sheet to the revised cash flow statement presentation. |
LOANS HELD FOR INVESTMENT
LOANS HELD FOR INVESTMENT | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
LOANS HELD FOR INVESTMENT | LOANS HELD FOR INVESTMENT As of June 30, 2017 , the Company’s portfolio totaled 38 loans held for investment, excluding 50 loans that were repaid or sold since inception. The aggregate originated commitment under these loans at closing was approximately $1.8 billion and outstanding principal was $1.7 billion as of June 30, 2017 . During the six months ended June 30, 2017 , the Company funded approximately $421.8 million of outstanding principal and received repayments of $81.7 million of outstanding principal, excluding non-controlling interests held by third parties, as described in more detail in the tables below. Such investments are referred to herein as the Company’s “investment portfolio.” As of June 30, 2017 , 89.0% of the Company’s loans have London Interbank Offered Rates (“LIBOR”) floors, with a weighted average floor of 0.56% , calculated based on loans with LIBOR floors. References to LIBOR or “L” are to 30-day LIBOR (unless otherwise specifically stated). The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of June 30, 2017 and December 31, 2016 ($ in thousands): As of June 30, 2017 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,529,155 $ 1,538,370 4.8 % 6.0 % 1.9 Subordinated debt and preferred equity investments 112,280 113,392 10.7 % 11.8 % 3.2 Total loans held for investment portfolio $ 1,641,435 $ 1,651,762 5.2 % 6.4 % 2.0 As of December 31, 2016 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,181,569 $ 1,188,425 4.7 % 5.7 % 1.8 Subordinated debt and preferred equity investments 121,828 123,230 10.7 % 11.5 % 4.1 Total loans held for investment portfolio (excluding non-controlling interests held by third parties) (4) $ 1,303,397 $ 1,311,655 5.2 % 6.3 % 2.0 _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Minimum Loan Borrowing Spread is equal to (a) for floating rate loans, the margin above the applicable index rate (e.g., LIBOR) plus floors, if any, on such applicable index rates, and (b) for fixed rate loans, the applicable interest rate. (3) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premium or discount) and assumes no dispositions, early prepayments or defaults. The Total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2017 and December 31, 2016 as weighted by the Outstanding Principal balance of each loan. (4) The table above as of December 31, 2016 excludes non-controlling interests held by third parties. A reconciliation of the Carrying Amount of loans held for investment portfolio, excluding non-controlling interests held by third parties, to the Carrying Amount of loans held for investment, as included within the Company’s consolidated balance sheets, is presented below. A reconciliation of the Company’s loans held for investment portfolio, excluding non-controlling interests held by third parties, to the Company’s loans held for investment as included within its consolidated balance sheets is as follows ($ in thousands): As of December 31, 2016 Carrying Amount Outstanding Principal Total loans held for investment portfolio (excluding non-controlling interests held by third parties) $ 1,303,397 $ 1,311,655 Non-controlling interest investment held by third parties 10,540 10,540 Loans held for investment $ 1,313,937 $ 1,322,195 As of June 30, 2017 , there were no non-controlling interests held by third parties. A more detailed listing of the Company’s investment portfolio based on information available as of June 30, 2017 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Various (5) Diversified $159.2 $158.4 L+4.35% 6.5% Oct 2018 (5) I/O Office TX 95.3 94.2 L+3.60% 5.3% July 2020 I/O Multifamily FL 89.7 89.3 L+4.75% 6.5% Sep 2019 I/O Various (6) Diversified 82.3 81.9 L+4.75% 6.9% Oct 2018 (6) I/O Retail IL 75.9 75.9 L+4.00% 5.6% Aug 2017 I/O Mixed-use NY 65.6 65.3 L+4.16% 5.8% Apr 2019 I/O Office TX 63.9 63.4 L+4.30% 6.4% Dec 2018 I/O Office CA 57.7 57.3 L+4.40% 6.2% Aug 2019 I/O Hotel CA 56.0 55.7 L+4.75% 6.7% Feb 2019 I/O Office IL 55.4 54.9 L+3.99% 5.7% Aug 2019 I/O Multifamily FL 53.7 53.3 L+3.65% 5.3% Mar 2021 I/O Office CO 53.4 52.7 L+4.15% 5.8% June 2021 I/O Office NJ 48.4 47.8 L+4.65% 6.5% July 2020 I/O Multifamily FL 45.4 45.2 L+4.75% 6.5% Sep 2019 I/O Student Housing CA 41.8 41.3 L+3.95% 5.7% July 2020 I/O Healthcare NY 41.6 41.6 L+5.00% 6.2% Dec 2017 I/O Hotel NY 37.3 37.2 L+4.75% 6.4% June 2018 I/O Hotel MI 35.2 35.2 L+4.15% 5.5% July 2018 (7) I/O Multifamily MN 34.1 33.9 L+4.75% 6.5% Oct 2019 I/O Industrial OH 32.4 32.4 L+4.20% 5.7% May 2018 P/I (8) Office OR 31.4 31.3 L+3.75% 5.4% Oct 2018 I/O Multifamily NY 31.4 31.1 L+4.55% 6.3% Feb 2019 I/O Retail IL 30.8 30.8 L+3.25% 4.9% Sep 2018 I/O Multifamily NY 29.4 29.3 L+3.75% 5.4% Oct 2017 I/O Multifamily TX 26.1 26.0 L+3.80% 5.2% Jan 2019 I/O Multifamily CA 25.0 24.8 L+3.85% 5.6% July 2020 I/O Student Housing AL 24.1 23.9 L+4.45% 6.2% Feb 2020 I/O Multifamily FL 21.4 21.2 L+4.25% 6.1% Feb 2019 I/O Multifamily CA 20.9 20.7 L+3.90% 5.5% Mar 2021 I/O Office CO 19.6 19.6 L+3.95% 5.6% Dec 2017 I/O Office PA 19.6 19.4 L+4.70% 6.4% Mar 2020 I/O Office FL 18.4 18.2 L+4.30% 6.1% Apr 2020 I/O Multifamily NY 16.0 15.9 L+3.85% 5.4% Nov 2017 I/O Subordinated Debt and Preferred Equity Investments: Multifamily GA/FL 38.8 38.6 L+11.85% (9) 13.3% June 2021 I/O Multifamily NY 33.3 33.2 L+8.07% 9.5% Jan 2019 I/O Office NJ 17.0 16.3 12.00% 12.8% Jan 2026 I/O (8) Office GA 14.3 14.3 9.50% 9.5% Aug 2017 I/O Office TX 10.0 9.9 14.00% 15.2% Dec 2018 I/O Total/Weighted Average $1,651.8 $1,641.4 6.4% _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premium or discount) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of June 30, 2017 or the LIBOR floor, as applicable. The Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2017 as weighted by the Outstanding Principal balance of each loan. (3) Certain loans are subject to contractual extension options that vary between one and two 12 -month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) The senior mortgage loan is collateralized by a portfolio of self-storage, retail and office properties. The total principal balance of the senior mortgage loan is $159.2 million as of June 30, 2017 , of which $122.2 million is allocable to the self-storage properties and $37.0 million is allocable to the retail and office properties (which amount with respect to the retail and office properties, among other payments, is due prior to the October 2018 stated maturity date). (6) The senior mortgage loan is collateralized by a portfolio of self-storage properties and one retail property. The total principal balance of the senior mortgage loan is $82.3 million as of June 30, 2017 , of which $70.2 million is allocable to the self-storage properties and $12.1 million is allocable to the retail property (which amount with respect to the retail property, among other payments, is due prior to the October 2018 stated maturity date). (7) In April 2017, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Michigan loan to July 2018. (8) In May 2017, amortization began on the senior Ohio loan, which had an outstanding principal balance of $32.4 million as of June 30, 2017 . In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $ 17.0 million as of June 30, 2017 . The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. (9) The preferred return is L+ 11.85% with 2.00% as payment-in-kind (“PIK”), to the extent cash flow is not available. There is no capped dollar amount on accrued PIK. The Company has made, and may continue to make, modifications to loans. Loan terms that may be modified include interest rates, required prepayments, asset release prices, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and will be determined on a case by case basis. For the six months ended June 30, 2017 , the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2016 $ 1,313,937 Initial funding 412,321 Origination fees and discounts, net of costs (4,709 ) Additional funding 9,512 Amortizing payments (102 ) Loan payoffs (92,164 ) Origination fee accretion 2,640 Balance at June 30, 2017 $ 1,641,435 No imp airment charges have been recognized during the three and six months ended June 30, 2017 and 2016 . |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Financing Agreements The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the BAML Facility, the CNB Facility, the MetLife Facility, the UBS Facility and the U.S. Bank Facility (individually defined below and collectively, the “Secured Funding Agreements”) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of June 30, 2017 and December 31, 2016 , the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): June 30, 2017 December 31, 2016 Outstanding Balance Total Outstanding Balance Total Wells Fargo Facility $ 334,295 $ 500,000 (1) $ 218,064 $ 325,000 Citibank Facility 204,943 250,000 (2) 302,240 250,000 (2) BAML Facility 72,928 125,000 77,679 125,000 CNB Facility — 50,000 — 50,000 MetLife Facility 53,130 180,000 53,130 180,000 UBS Facility 14,720 140,000 71,360 140,000 U.S. Bank Facility 129,721 185,989 (3) 58,240 125,000 Secured Term Loan 155,000 155,000 155,000 155,000 Total $ 964,737 $ 1,585,989 $ 935,713 $ 1,350,000 ______________________________________________________________________________ (1) In May 2017, the Company amended the Wells Fargo Facility (as defined below) to increase the facility’s commitment amount from $325.0 million to $500.0 million . (2) The Citibank Facility (as defined below) has an accordion feature that provides for an increase in the $250.0 million commitment amount with respect to approved assets, as determined by Citibank, N.A. in its sole discretion. (3) In June 2017, the Company amended the U.S. Bank Facility (as defined below) to increase the facility’s commitment amount from $125.0 million to $186.0 million . Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements. Wells Fargo Facility The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $500.0 million . Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In May 2017, the Company amended the Wells Fargo Facility to increase the facility’s commitment amount from $325.0 million to $500.0 million and extend the initial maturity date to December 14, 2018. The initial maturity date of the Wells Fargo Facility is subject to two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2020. Advances under the Wells Fargo Facility accrue interest at a per annum rate equal to the sum of (i) one-month LIBOR plus (ii) a pricing margin range of 1.75% to 2.35% . The Company incurs a non-utilization fee of 25 basis points on the daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility is utilized. For the three and six months ended June 30, 2017 , the Company incurred a non-utilization fee of $83 thousand and $92 thousand , respectively. For the three and six months ended June 30, 2016 , the Company incurred a non-utilization fee of $80 thousand and $146 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. Citibank Facility The Company is party to a $250.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. The Citibank Facility has an accordion feature that provides for an increase in the $250.0 million commitment amount with respect to approved assets, as determined by Citibank in its sole discretion. The initial maturity date of the Citibank Facility is December 10, 2018, subject to three 12 -month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if all three were exercised, would extend the maturity date of the Citibank Facility to December 8, 2021. Advances under the Citibank Facility accrue interest at a per annum rate equal to one-month LIBOR plus a pricing margin range of 2.25% to 2.50% , subject to certain exceptions. Advances applicable to assets funded under the Citibank Facility prior to December 8, 2016 accrue interest at a per annum rate equal to one-month LIBOR plus a pricing margin range of 2.00% to 2.50% . The Company incurs a non-utilization fee of 25 basis points on the daily available balance of the Citibank Facility. For the three and six months ended June 30, 2017 , the Company incurred a non-utilization fee of $62 thousand and $82 thousand , respectively. For the three and six months ended June 30, 2016 , the Company incurred a non-utilization fee of $25 thousand and $93 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. BAML Facility The Company is party to a $125.0 million Bridge Loan Warehousing Credit and Security Agreement with Bank of America, N.A. (“Bank of America”) (the “BAML Facility”). Under the BAML Facility, the Company may obtain advances secured by eligible commercial mortgage loans collateralized by multifamily properties. Bank of America may approve the loans on which advances are made under the BAML Facility in its sole discretion. In May 2017, the Company amended the BAML Facility to extend the period during which the Company may request individual loans under the facility to May 24, 2018. Individual advances under the BAML Facility generally have a two -year maturity, subject to one 12 -month extension at the Company’s option upon the satisfaction of certain conditions and applicable extension fees being paid. In addition, in May 2017, the final maturity date of individual loans under the BAML Facility was extended to May 25, 2021. Advances under the BAML Facility accrue interest at a per annum rate equal to one-month LIBOR plus a spread ranging from 2.25% to 2.75% depending upon the type of asset securing such advance. The Company incurs a non-utilization fee of 12.5 basis points on the average daily available balance of the BAML Facility to the extent less than 50% of the BAML Facility is utilized. For the three and six months ended June 30, 2017 , the Company incurred a non-utilization fee of $22 thousand and $31 thousand , respectively. For the three and six months ended June 30, 2016 , the Company incurred a non-utilization fee of $16 thousand and $32 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. CNB Facility The Company is party to a $50.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. The initial maturity date of the CNB Facility is March 11, 2018. The Company has two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the CNB Facility to March 10, 2020. Advances under the CNB Facility accrue interest at a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12 -month interest period plus 3.00% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50% , or one month LIBOR plus 1.00% ) plus 1.25% ; provided that in no event shall the interest rate be less than 3.00% . Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue unused line fees at the rate of 0.375% per annum. For the three and six months ended June 30, 2017 , the Company incurred a non-utilization fee of $47 thousand and $94 thousand , respectively. For the three and six months ended June 30, 2016 , the Company incurred a non-utilization fee of $2 thousand and $45 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. MetLife Facility The Company and certain of its subsidiaries are party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. The initial maturity date of the MetLife Facility is August 12, 2017. The Company has two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the MetLife Facility to August 12, 2019. Advances under the MetLife Facility accrue interest at a per annum rate of one-month LIBOR plus 2.35% . The Company will pay MetLife, if applicable, an annual make-whole fee equal to the amount by which the aggregate price differential paid over the term of the MetLife Facility is less than the defined minimum price differential, unless certain conditions are met. UBS Facility The Company and certain of its subsidiaries are party to a $140.0 million revolving master repurchase facility with UBS Real Estate Securities Inc. (“UBS”) (the “UBS Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans and, under certain circumstances, other assets meeting defined eligibility criteria that are approved by UBS in its sole discretion. The maturity date of the UBS Facility is October 21, 2018, subject to annual extensions in UBS’ sole discretion. The price differential (or interest rate) on the UBS Facility is one-month LIBOR plus (a) 1.88% per annum, for assets that are subject to an advance for one year or less, (b) 2.08% per annum, for assets that are subject to an advance in excess of one year but less than two years and (c) 2.28% per annum, for assets that are subject to an advance for greater than two years; in each case, excluding amortization of commitment and exit fees. Upon termination of the UBS Facility, the Company will pay UBS, if applicable, the amount by which the aggregate price differential paid over the term of the UBS Facility is less than the defined minimum price differential and an exit fee, in each case, unless certain conditions are met. U.S. Bank Facility The Company and certain of its subsidiaries are party to a $186.0 million master repurchase and securities contract with U.S. Bank National Association (“U.S. Bank”) (the “U.S. Bank Facility”). Pursuant to the U.S. Bank Facility, the Company is permitted to sell, and later repurchase, eligible commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing, manufactured housing or self-storage properties. U.S. Bank may approve the mortgage loans that are subject to the U.S. Bank Facility in its sole discretion. In June 2017, the Company amended the U.S. Bank Facility to increase the facility’s commitment amount from $125.0 million to $186.0 million and extend the initial maturity date to July 31, 2020. The initial maturity date of the U.S. Bank Facility is subject to two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which if both were exercised, would extend the maturity date of the U.S. Bank Facility to July 31, 2022. Advances under the U.S. Bank Facility generally accrue interest at a per annum rate equal to one-month LIBOR plus a spread of 2.25% , unless otherwise agreed between U.S. Bank and the Company, depending upon the mortgage loan sold to U.S. Bank in the applicable transaction. The Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the U.S. Bank Facility to the extent less than 50% of the U.S. Bank Facility is utilized. For the three and six months ended June 30, 2017 , the Company incurred a non-utilization fee of $42 thousand and $83 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. For the three and six months ended June 30, 2016 , the Company did not incur a non-utilization fee. Secured Term Loan The Company and certain of its subsidiaries are party to a $155.0 million Credit and Guaranty Agreement with Highbridge Principal Strategies, LLC, as administrative agent, and DBD Credit Funding LLC, as collateral agent (the “Secured Term Loan”). The Company made an initial draw of $75.0 million on December 9, 2015, the closing date. The Company drew the remaining $80.0 million of the Secured Term Loan on September 9, 2016. The Secured Term Loan bears interest at a rate of LIBOR plus 6.0% with a LIBOR floor of 1.0% on drawn amounts. The Secured Term Loan has a maturity date of December 9, 2018. The Company was subject to a monthly non-utilization fee equal to 1.0% per annum on the unused commitment amount during the nine -month commitment period following the closing date for which the $80.0 million of the Secured Term Loan was not utilized. For the three and six months ended June 30, 2017 , the Company did not incur a non-utilization fee. For the three and six months ended June 30, 2016 , the Company incurred a non-utilization fee of $202 thousand and $404 thousand , respectively. The non-utilization fee is included in interest expense within the consolidated statements of operations. The total original issue discount on the Secured Term Loan draws was $ 2.3 million , which represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. The estimated effective interest rate of the Secured Term Loan, which is equal to LIBOR (subject to a floor of 1.0% ) plus the stated rate of 6.0% plus the accretion of the original issue discount and associated costs, was 8.5% for the three and six months ended June 30, 2017 and 2016 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES As of June 30, 2017 and December 31, 2016 , the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of June 30, 2017 December 31, 2016 Total commitments $ 1,749,283 $ 1,380,805 Less: funded commitments (1,651,762 ) (1,311,655 ) Total unfunded commitments $ 97,521 $ 69,150 The Company from time to time may be party to litigation relating to claims arising in the normal course of business. As of June 30, 2017 , the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Stock Buyback Program In May 2015, the Company announced that the Company’s board of directors authorized the Company to repurchase up to $ 20.0 million of the Company’s outstanding common stock over a period of one year (the “Stock Buyback Program”). In February 2016, the Company’s board of directors increased the size of the existing $ 20.0 million Stock Buyback Program to $ 30.0 million and extended the Stock Buyback Program through March 31, 2017, which was not extended. Common Stock There were no shares issued in public or private offerings for the three and six months ended June 30, 2017 . See “Equity Incentive Plan” below for shares issued under the plan. Equity Incentive Plan On April 23, 2012, the Company adopted an equity incentive plan (the “2012 Equity Incentive Plan”). Pursuant to the 2012 Equity Incentive Plan, the Company may grant awards consisting of restricted shares of the Company’s common stock, restricted stock units and/or other equity-based awards to the Company’s outside directors, employees, officers, ACREM and other eligible awardees under the plan, subject to an aggregate limitation of 690,000 shares of common stock ( 7.5% of the issued and outstanding shares of the Company’s common stock immediately after giving effect to the issuance of the shares sold in the IPO). Any restricted shares of the Company’s common stock and restricted stock units will be accounted for under FASB ASC Topic 718, Compensation—Stock Compensation , resulting in share-based compensation expense equal to the grant date fair value of the underlying restricted shares of common stock or restricted stock units. Restricted stock grants generally vest ratably over a one to four year period from the vesting start date. The grantee receives additional compensation for each outstanding restricted stock grant, classified as dividends paid, equal to the per-share dividends received by common stockholders. The following table details the restricted stock grants awarded as of June 30, 2017 : Grant Date Vesting Start Date Shares Granted May 1, 2012 July 1, 2012 35,135 June 18, 2012 July 1, 2012 7,027 July 9, 2012 October 1, 2012 25,000 June 26, 2013 July 1, 2013 22,526 November 25, 2013 November 25, 2016 30,381 January 31, 2014 August 31, 2015 48,273 February 26, 2014 February 26, 2014 12,030 February 27, 2014 August 27, 2014 22,354 June 24, 2014 June 24, 2014 17,658 June 24, 2015 July 1, 2015 25,555 April 25, 2016 July 1, 2016 10,000 June 27, 2016 July 1, 2016 24,680 April 25, 2017 April 25, 2018 81,710 June 7, 2017 July 1, 2017 18,224 Total 380,553 The following tables summarize the (i) non-vested shares of restricted stock and (ii) the vesting schedule of shares of restricted stock for the Company’s directors and officers as of June 30, 2017 : Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officer Total Balance at December 31, 2016 21,514 — 21,514 Granted 18,224 81,710 99,934 Vested (14,842 ) — (14,842 ) Forfeited — — — Balance at June 30, 2017 24,896 81,710 106,606 Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officer Total 2017 10,780 — 10,780 2018 12,448 27,237 39,685 2019 1,668 27,237 28,905 2020 — 27,236 27,236 2021 — — — Total 24,896 81,710 106,606 Non-Controlling Interests The non-controlling interests held by third parties in the Company’s consolidated balance sheets represent the equity interests in a limited liability company, ACRC KA Investor LLC (“ACRC KA”) that are not owned by the Company. A portion of ACRC KA’s consolidated equity and net income are allocated to these non-controlling interests held by third parties based on their pro-rata ownership of ACRC KA. As of December 31, 2016 , ACRC KA’s total equity was $21.7 million , of which $11.1 million was owned by the Company and $10.6 million was allocated to non-controlling interests held by third parties. As of June 30, 2017 , the equity interests in ACRC KA held by the Company and third parties had been repaid in full and as such, there was no equity outstanding that was allocated to non-controlling interests held by third parties. See Note 12 included in these consolidated financial state ments for more information on ACRC KA. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following information sets forth the computations of basic and diluted earnings per common share from continuing operations and discontinued operations for the three and six months ended June 30, 2017 and 2016 ($ in thousands, except share and per share data): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Net income from continuing operations, less non-controlling interests $ 6,713 $ 6,004 $ 13,166 $ 11,474 Net income from discontinued operations $ — $ 2,689 $ — $ 2,355 Divided by: Basic weighted average shares of common stock outstanding: 28,475,853 28,428,703 28,472,356 28,479,015 Non-vested restricted stock 70,771 67,130 42,511 69,929 Diluted weighted average shares of common stock outstanding: 28,546,624 28,495,833 28,514,867 28,548,944 Basic earnings per common share: Continuing operations $ 0.24 $ 0.21 $ 0.46 $ 0.40 Discontinued operations — 0.09 — 0.08 Net income $ 0.24 $ 0.31 $ 0.46 $ 0.49 Diluted earnings per common share: Continuing operations $ 0.24 $ 0.21 $ 0.46 $ 0.40 Discontinued operations — 0.09 — 0.08 Net income $ 0.24 $ 0.31 $ 0.46 $ 0.48 |
INCOME TAX
INCOME TAX | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX The Company wholly owns ACRC Lender W TRS LLC and ACRC Lender U TRS LLC, which are taxable REIT subsidiaries (“TRS”) formed in order to issue and hold certain loans intended for sale. The Company also wholly owns ACRC 2017-FL3 TRS LLC, which is a TRS formed in order to hold a portion of the CLO Securitization (as defined below) to the extent it generates excess inclusion income. The income tax provision for the Company and the TRSs consisted of the following for the three and six months ended June 30, 2017 and 2016 ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Current $ 7 $ 3 $ 10 $ 7 Deferred — — — — Excise tax 20 — 85 — Total income tax expense, including excise tax $ 27 $ 3 $ 95 $ 7 For the three and six months ended June 30, 2017 , the Company recorded an expense of $20 thousand and $85 thousand , respectively, for U.S. federal excise tax. Excise tax represents a 4% tax on a portion of the required amount of the Company’s ordinary income and net capital gains not distributed during the year. If it is determined that the Company’s estimated current year taxable income plus any undistributed shortfall from its prior calendar year will be in excess of estimated dividend distributions (including capital gain dividend) for the current year, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The quarterly expense is calculated in accordance with applicable tax regulations. The TRSs recognize interest and penalties related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. As of June 30, 2017 , tax years 2013 through 2016 remain subject to examination by taxing authorities. The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company follows FASB ASC Topic 820-10, Fair Value Measurement (“ASC 820-10”), which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure requirements for fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. In accordance with ASC 820-10, the inputs used to measure fair value are summarized in the three broad levels listed below: • Level 1-Quoted prices in active markets for identical assets or liabilities. • Level 2-Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. • Level 3-Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies. Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced. As of June 30, 2017 and December 31, 2016 , the Company did not have any assets or liabilities required to be recorded at fair value on a recurring or nonrecurring basis. As of June 30, 2017 and December 31, 2016 , the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of June 30, 2017 December 31, 2016 Level in Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for investment 3 $ 1,641,435 $ 1,651,762 $ 1,313,937 $ 1,322,195 Financial liabilities: Secured funding agreements 2 $ 809,737 $ 809,737 $ 780,713 $ 780,713 Secured term loan 2 151,112 155,000 149,878 155,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 270,759 272,927 — — The carrying values of cash and cash equivalents, restricted cash, interest receivable, due to affiliate liability and accrued expenses, which are all categorized as Level 2 within the fair value hierarchy, approximate their fair values due to their short-term nature. Loans held for investment are recorded at cost, net of unamortized loan fees and origination costs and net of an allowance for loan losses. The Company may record fair value adjustments on a nonrecurring basis when it has determined that it is necessary to record a specific reserve against a loan and the Company measures such specific reserve using the fair value of the loan’s collateral. To determine the fair value of the collateral, the Company may employ different approaches depending on the type of collateral. The Financing Agreements and collateralized loan obligation (“CLO”) securitization debt are recorded at outstanding principal, which is the Company’s best estimate of the fair value. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Management Agreement The Company is party to a Management Agreement under which ACREM, subject to the supervision and oversight of the Company’s board of directors, is responsible for, among other duties, (a) performing all of the Company’s day-to-day functions, (b) determining the Company’s investment strategy and guidelines in conjunction with the Company’s board of directors, (c) sourcing, analyzing and executing investments, asset sales and financing, and (d) performing portfolio management duties. In addition, ACREM has an Investment Committee that oversees compliance with the Company’s investment strategy and guidelines, investment portfolio holdings and financing strategy. In exchange for its services, ACREM is entitled to receive a base management fee, an incentive fee, expense reimbursements, grants of equity-based awards pursuant to the Company’s 2012 Equity Incentive Plan and a termination fee, if applicable. The base management fee is equal to 1.5% of the Company’s stockholders’ equity per annum, which is calculated and payable quarterly in arrears in cash. For purposes of calculating the base management fee, stockholders’ equity means: (a) the sum of (i) the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (ii) the Company’s retained earnings at the end of the most recently completed fiscal quarter determined in accordance with GAAP (without taking into account any non-cash equity compensation expense incurred in current or prior periods); less (b) (x) any amount that the Company has paid to repurchase the Company’s common stock since inception, (y) any unrealized gains and losses and other non-cash items that have impacted stockholders’ equity as reported in the Company’s consolidated financial statements prepared in accordance with GAAP, and (z) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between ACREM and the Company’s independent directors and approval by a majority of the Company’s independent directors. As a result, the Company’s stockholders’ equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown in the Company’s consolidated financial statements. The incentive fee is an amount, not less than zero , equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) the Company’s Core Earnings (as defined below) for the previous 12 -month period, and (B) the product of (1) the weighted average of the issue price per share of the Company’s common stock of all of the Company’s public offerings of common stock multiplied by the weighted average number of all shares of common stock outstanding including any restricted shares of the Company’s common stock, restricted stock units or any shares of the Company’s common stock not yet issued, but underlying other awards granted under the Company’s 2012 Equity Incentive Plan (see Note 6 included in these consolidated financial statements) in the previous 12 -month period, and (2) 8% ; and (b) the sum of any incentive fees earned by ACREM with respect to the first three fiscal quarters of such previous 12 -month period; provided , however , that no incentive fee is payable with respect to any fiscal quarter unless cumulative Core Earnings for the 12 most recently completed fiscal quarters is greater than zero . “Core Earnings” is a non-GAAP measure and is defined as GAAP net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that any of the Company’s target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), and one-time events pursuant to changes in GAAP and certain non-cash charges after discussions between ACREM and the Company’s independent directors and after approval by a majority of the Company’s independent directors. For the three and six months ended June 30, 2017 , $113 thousand and $381 thousand , respectively, of incentive fees were incurred. For the three and six months ended June 30, 2016 , no incentive fees were incurred. The Company reimburses ACREM at cost for operating expenses that ACREM incurs on the Company’s behalf, including expenses relating to legal, financial, accounting, servicing, due diligence and other services. The Company will not reimburse ACREM for the salaries and other compensation of its personnel, except for the allocable share of the salaries and other compensation of the Company’s (a) Chief Financial Officer, based on the percentage of his time spent on the Company’s affairs and (b) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of ACREM or its affiliates who spend all or a portion of their time managing the Company’s affairs based on the percentage of their time spent on the Company’s affairs. The Company is also required to pay its pro rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of ACREM and its affiliates that are required for the Company’s operations. The term of the Management Agreement ends on May 1, 2018, with automatic one -year renewal terms thereafter. Except under limited circumstances, upon a termination of the Management Agreement, the Company will pay ACREM a termination fee equal to three times the average annual base management fee and incentive fee received by ACREM during the 24 -month period immediately preceding the most recently completed fiscal quarter prior to the date of termination, each as described above. Certain of the Company’s subsidiaries, along with the Company’s lenders under certain of the Company’s Secured Funding Agreements, as well as under the CLO transaction have entered into various servicing agreements with ACREM’s subsidiary servicer, Ares Commercial Real Estate Servicer LLC (“ACRES”). The Company’s Manager will specially service, as needed, certain of the Company’s investments. Effective May 1, 2012, ACRES agreed that no servicing fees pursuant to these servicing agreements would be charged to the Company or its subsidiaries by ACRES or the Manager for so long as the Management Agreement remains in effect, but that ACRES will continue to receive reimbursement for overhead related to servicing and operational activities pursuant to the terms of the Management Agreement. The following table summarizes the related party costs incurred by the Company related to continuing operations for the three and six months ended June 30, 2017 and 2016 and amounts payable to the Company’s Manager as of June 30, 2017 and December 31, 2016 ($ in thousands): Incurred Payable For the three months ended June 30, For the six months ended June 30, As of 2017 2016 2017 2016 June 30, 2017 December 31, 2016 Affiliate Payments Management fees $ 1,541 $ 1,338 $ 3,085 $ 2,690 $ 1,541 $ 1,549 Incentive fees 113 — 381 — 113 27 General and administrative expenses 949 660 1,897 1,557 949 1,024 Direct costs 28 (1) 157 (2) 88 (1) 503 (2) 22 99 Total $ 2,631 $ 2,155 $ 5,451 $ 4,750 $ 2,625 $ 2,699 ______________________________________________________________________________ (1) For the three and six months ended June 30, 2017 , direct costs incurred are included in general and administrative expenses within the consolidated statements of operations. (2) For the three and six months ended June 30, 2016 , direct costs incurred are included in (i) general and administrative expenses of $108 thousand and $261 thousand , respectively, and (ii) interest expense of $49 thousand and $242 thousand , respectively, within the consolidated statements of operations. Credit Support Fee Agreement In July 2014, the Company and certain of its subsidiaries entered into a Credit Support Fee Agreement with Ares Management under which the Company agreed to pay Ares Management a credit support fee in an amount equal to 1.50% per annum times the average amount of the loans outstanding under the $75 million revolving funding facility (the “July 2014 CNB Facility”) with City National Bank and to reimburse Ares Management for its out-of-pocket costs and expenses in connection with the transaction. During the three and six months ended June 30, 2016 , the Company incurred a credit support fee of $49 thousand and $242 thousand , respectively, under the July 2014 CNB Facility which is included within interest expense in the Company’s consolidated statements of operations. On September 30, 2016, the July 2014 CNB Facility was repaid in full and its terms were not extended. In conjunction with the repayment in full of the July 2014 CNB Facility, the Credit Support Fee Agreement was terminated. |
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS AND DISTRIBUTIONS | 6 Months Ended |
Jun. 30, 2017 | |
DIVIDENDS AND DISTRIBUTIONS | |
DIVIDENDS AND DISTRIBUTIONS | DIVIDENDS AND DISTRIBUTIONS The following table summarizes the Company’s dividends declared during the six months ended June 30, 2017 and 2016 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount May 2, 2017 June 30, 2017 July 17, 2017 $ 0.27 $ 7,718 March 7, 2017 March 31, 2017 April 17, 2017 0.27 7,690 Total cash dividends declared for the six months ended June 30, 2017 $ 0.54 $ 15,408 May 5, 2016 June 30, 2016 July 15, 2016 $ 0.26 $ 7,413 March 1, 2016 March 31, 2016 April 15, 2016 0.26 7,429 Total cash dividends declared for the six months ended June 30, 2016 $ 0.52 $ 14,842 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Consolidated VIEs As discussed in Note 2 , the Company evaluates all of its investments and other interests in entities for consolidation, including its investments in: (a) the CLO securitization and (b) a preferred equity investment in an LLC entity (discussed below), all of which are generally considered to be variable interests in a VIE. CLO Securitization On March 2, 2017, ACRE Commercial Mortgage 2017-FL3 Ltd. (the “Issuer”) and ACRE Commercial Mortgage 2017-FL3 LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an Indenture (the “Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association as trustee, which governs the issuance of approximately $308.8 million principal balance secured floating rate notes (the “Notes”) and $32.4 million of preferred equity in the Issuer (the “CLO Securitization”). For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities. The Notes are collateralized by interests in a pool of twelve mortgage assets having a total principal balance of approximately $341.2 million (the “Mortgage Assets”) that were originated by a subsidiary of the Company. During the reinvestment period ending on March 15, 2019, the Company may direct the Issuer to acquire additional mortgage assets meeting applicable reinvestment criteria using the principal repayments from the Mortgage Assets, subject to the satisfaction of certain conditions, including receipt of a Rating Agency Confirmation and investor approval of the new mortgage assets. The contribution of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement between ACRC Lender LLC (the “Seller”), a wholly owned subsidiary of the Company, and the Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants. In connection with the securitization, the Issuer and Co-Issuer offered and issued the following classes of Notes: Class A, Class A-S, Class B, Class C and Class D Notes (collectively, the “Offered Notes”) to a third party. A wholly owned subsidiary of the Company retained approximately $35.8 million of the Notes and all of the $32.4 million of preferred equity in the Issuer, which totaled $68.2 million . The Company, as the holder of the subordinated Notes and all of the preferred equity in the Issuer, has the obligation to absorb losses of the CLO, since the Company has a first loss position in the capital structure of the CLO. After March 15, 2021, the Issuer may redeem the Offered Notes subject to paying a make whole prepayment fee of 1.0% of the then outstanding balance of the Offered Notes. In addition, once the Class A Notes, Class A-S Notes, Class B Notes and Class C Notes have been repaid in full, the Issuer has the right to redeem the Class D Notes, subject to paying a make whole prepayment fee of 1.0% on the Class D Notes. As the directing holder of the CLO Securitization, the Company has the ability to direct activities that could significantly impact the CLO Securitization’s economic performance. ACRES is designated as special servicer of the CLO Securitization and has the power to direct activities during the loan workout process on defaulted and delinquent loans, which is the activity that most significantly impacts the CLO Securitization’s economic performance. ACRES did not waive the special servicing fee, and the Company pays its overhead costs. If an unrelated third party had the right to unilaterally remove the special servicer, then the Company would not have the power to direct activities that most significantly impact the CLO Securitization’s economic performance. In addition, there were no substantive kick-out rights of any unrelated third party to remove the special servicer without cause. The Company’s subsidiaries, as directing holders, have the ability to remove the special servicer without cause. Based on these factors, the Company is determined to be the primary beneficiary of the CLO Securitization; thus, the CLO Securitization is consolidated into the Company’s consolidated financial statements. The CLO Securitization is consolidated in accordance with FASB ASC Topic 810 and is structured as a pass through entity that receives principal and interest on the underlying collateral and distributes those payments to the note holders, as applicable. The assets and other instruments held by the CLO Securitization are restricted and can only be used to fulfill the obligations of the CLO Securitization. Additionally, the obligations of the CLO Securitization do not have any recourse to the general credit of any other consolidated entities, nor to the Company as the primary beneficiary. The inclusion of the assets and liabilities of the CLO Securitization of which the Company is deemed the primary beneficiary has no economic effect on the Company. The Company’s exposure to the obligations of the CLO Securitization is generally limited to its investment in the entity. The Company is not obligated to provide, nor has it provided, any financial support for the consolidated structure. As such, the risk associated with the Company’s involvement in the CLO Securitization is limited to the carrying value of its investment in the entity. As of June 30, 2017 , the Company’s maximum risk of loss was $68.2 million , which represents the carrying value of its investment in the CLO Securitization. For the three and six months ended June 30, 2017 , the Company incurred interest expense related to the CLO Securitization of $1.9 million and $2.5 million , respectively, which is included within interest expense in the Company’s consolidated statements of operations. Investment in VIE On December 19, 2014, the Company and third party institutional investors formed a limited liability company, ACRC KA, which acquired $170.0 million of preferred equity in a REIT whose assets were comprised of a portfolio of 22 multifamily, student housing, medical office and self-storage properties managed by its sponsor. The Company’s investment in ACRC KA was considered to be an investment in a VIE. As of December 31, 2016 , the Company owned a controlling financial interest of 51.0% of the equity shares in the VIE and the third party institutional investors owned the remaining 49.0% minority financial interest. The preferred equity shares were entitled to a preferred monthly return over the term of the investment at a fixed rate of 10.95% per annum. In January 2017, the Company’s investment in ACRC KA was repaid in full. Accordingly, as of June 30, 2017 , the Company’s investment was no longer outstanding. ACREM was the non-member manager of the VIE. Based on the terms of the ACRC KA LLC agreement, ACREM had the ability to direct activities that could significantly impact the VIE’s economic performance. There were no substantive kick-out rights held by the third party institutional investors to remove ACREM as the non-member manager without cause. As ACREM served as the manager of the Company, the Company had the right to receive benefits from the VIE that could potentially be significant. As such, the Company was deemed to be the primary beneficiary of the VIE and the party that was most closely associated with the VIE. Thus, the VIE was consolidated into the Company’s consolidated financial statements and the preferred equity interests owned by the third party institutional investors were reflected as a non-controlling interest held by third parties within the Company’s consolidated balance sheets. As of December 31, 2016 , the carrying value of the preferred equity investment, which is net of unamortized fees and origination costs, was $21.3 million , and was included within loans held for investment in the Company’s consolidated balance sheets. The risk associated solely with respect to the Company’s investment in this VIE was limited to the outstanding principal of its investment in the entity. As of December 31, 2016 , the Company’s maximum risk of loss solely with respect to this investment was $11.0 million . Unconsolidated VIEs The Company also holds variable interests in VIEs structured as preferred equity investments, where the Company does not have a controlling financial interest. For these structures, the Company is not deemed to be the primary beneficiary of the VIE, and the Company does not consolidate these VIEs. These preferred equity investments are accounted for as loans held for investment and are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired, and are included within loans held for investment in the Company’s consolidated balance sheets. The Company is not obligated to provide, nor has it provided, any financial support for any of the Company’s unconsolidated VIEs. As such, the risks associated with the Company’s involvement in these unconsolidated VIEs are limited to the outstanding principal of the Company’s investment in the entity. The following table presents the carrying value and the maximum exposure to loss of unconsolidated VIEs as of June 30, 2017 and December 31, 2016 ($ in thousands): As of June 30, 2017 December 31, 2016 Carrying value $ 38,536 $ 37,373 Maximum exposure to loss $ 38,816 $ 37,679 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS ACRE Capital primarily originated, sold and serviced multifamily and senior-living related loans under programs offered by government-sponsored enterprises, such as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and by government agencies, such as the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). ACRE Capital was approved as a Fannie Mae Delegated Underwriting and Servicing lender, a Freddie Mac Program Plus® Seller/Servicer, a Multifamily Accelerated Processing and Section 232 LEAN lender for HUD, and a Ginnie Mae issuer. While ACRE Capital earned little interest income from these activities because it generally only held loans for short periods, ACRE Capital received origination fees when it closed loans and sale premiums when it sold loans. ACRE Capital also retained the rights to service the loans, which were known as mortgage servicing rights (“MSRs”), and received fees for such servicing during the life of the loans, which generally lasted 10 years or more. On September 30, 2016, the Company closed the ACRE Capital Sale for a purchase price of $93 million in accordance with the Agreement dated June 28, 2016. Discontinued Operations - Financial Summary The following information reconciles the net income from operations of discontinued operations, net of income taxes, that are presented separately in the consolidated statements of operations ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Mortgage banking revenue: Servicing fees, net $ 2,924 $ 6,966 Gains from mortgage banking activities 10,813 13,172 Provision for loss sharing 61 289 Change in fair value of mortgage servicing rights (2,047 ) (3,895 ) Mortgage banking revenue 11,751 16,532 Expenses: Management fees to affiliate 145 292 Professional fees 162 371 Compensation and benefits 5,960 10,244 Transaction costs 515 515 General and administrative expenses 942 2,038 General and administrative expenses reimbursed to affiliate 306 437 Total expenses 8,030 13,897 Income from operations before income taxes 3,721 2,635 Income tax expense 1,032 280 Net income from operations of discontinued operations, net of income taxes $ 2,689 $ 2,355 Revenue Recognition Servicing fees were earned for servicing mortgage loans, including all activities related to servicing the loans, and were recognized as services were provided over the life of the related mortgage loan. Also included in servicing fees were the net fees earned on borrower prepayment penalties and interest earned on borrowers’ escrow payments and interim cash balances, along with other ancillary fees and reduced by write-offs of MSRs for loans that were prepaid, changes in the fair value of the servicing fee payable (defined below) and interest expense related to escrow accounts. ACRE Capital provided additional payments to certain personnel by providing them with a percentage of the servicing fee revenue that was earned by ACRE Capital, which was initially recorded as a liability when ACRE Capital committed to make a loan to a borrower (the “servicing fee payable”). Servicing fees, net are included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. Gains from mortgage banking activities included the initial fair value of MSRs, loan origination fees, gain on the sale of loans originated, interest income and fees earned on loans held for sale, changes to the fair value of derivative financial instruments attributable to the loan commitments and forward sale commitments and reduced by the expense related to the initial fair value of the servicing fee payable and the interest expense related to the Warehouse Lines of Credit (as defined below). The initial fair value of MSRs, loan origination fees, gain on the sale of loans originated, certain direct loan origination costs for loans held for sale and the expenses related to the initial fair value of the servicing fee payable were recognized when ACRE Capital committed to make a loan to a borrower. When ACRE Capital settled a sale agreement and transferred the mortgage loan to the buyer, ACRE Capital recognized a MSR asset equal to the present value of the expected net cash flows associated with the servicing of loans sold. Gains from mortgage banking activities are included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. Derivatives Non-designated Hedges Derivatives not designated as hedges were derivatives that did not meet the criteria for hedge accounting under GAAP or for which ACRE Capital had not elected to designate as hedges. Loan commitments and forward sale commitments ACRE Capital entered into loan commitments with borrowers on loan originations whereby the interest rate on the prospective loan was determined prior to funding. In general, ACRE Capital simultaneously entered into forward sale commitments with investors in order to hedge against the interest rate exposure on loan commitments. The forward sale commitment with the investor locked in an interest rate and price for the sale of the loan. The terms of the loan commitment with the borrower and the forward sale commitment with the investor were matched with the objective of hedging interest rate risk. Loan commitments and forward sale commitments were considered undesignated derivative instruments. Accordingly, such commitments, along with any related fees received from potential borrowers, were recorded at fair value, with changes in fair value recorded in earnings. For the three and six months ended June 30, 2016 , ACRE Capital entered into 13 and 19 loan commitments, respectively, and 13 and 19 forward sale commitments, respectively. Income Tax The Company established a TRS, TRS Holdings, in connection with the acquisition of ACRE Capital. TRS Holdings' income tax provision consisted of the following for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Current $ (127 ) $ (402 ) Deferred 1,159 682 Total income tax expense $ 1,032 $ 280 Deferred income taxes reflected the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. TRS Holdings was not subject to tax in any foreign tax jurisdiction. TRS Holdings recognized interest and penalties related to unrecognized tax benefits within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. The following table is a reconciliation of TRS Holdings’ statutory U.S. federal income tax rate to TRS Holdings’ effective tax rate for the three and six months ended June 30, 2016 : For the three months ended June 30, 2016 For the six months ended June 30, 2016 Federal statutory rate 35.0 % 35.0 % State income taxes 3.6 % 3.6 % Federal benefit of state tax deduction (1.3 )% (1.3 )% Effective tax rate 37.3 % 37.3 % As of June 30, 2017 , tax years 2013 through 2016 remained subject to examination by taxing authorities. TRS Holdings did not have any unrecognized tax benefits. Intercompany Notes In connection with the acquisition of ACRE Capital, the Company partially capitalized TRS Holdings with a $44.0 million note. In October 2014, the Company entered into an $8.0 million revolving promissory note with TRS Holdings (collectively, the two intercompany notes described above are referred to as the “Intercompany Notes”). In connection with the ACRE Capital Sale, the Intercompany Notes were repaid in full with the proceeds from the sale on September 30, 2016. As of June 30, 2016 , the outstanding principal balance of the Intercompany Notes was $51.9 million. The income statement effects of the Intercompany Notes were eliminated in consolidation for financial reporting purposes, but the interest income and expense from the Intercompany Notes affected the taxable income of the Company and TRS Holdings. Related Party Transactions The following table summarizes the related party costs incurred by the Company related to discontinued operations for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Affiliate Payments Management fees (1) $ 145 $ 292 General and administrative expenses (1) 306 437 Direct costs (1) 4 33 Total $ 455 $ 762 ______________________________________________________________________________ (1) Management fees incurred are included in management fees to affiliate, general and administrative expenses incurred are included in general and administrative expenses reimbursed to affiliate and direct costs incurred are included in general and administrative expenses for the three and six months ended June 30, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the six months ended June 30, 2017 , except as disclosed below. On July 12, 2017, the Company originated an $18.1 million senior mortgage loan on a multifamily property located in California. At closing, the outstanding principal balance was approximately $13.4 million . The loan has an interest rate of LIBOR plus 3.80% (plus fees) and an initial term of three years. On July 17, 2017, the Company originated a $39.7 million senior mortgage loan on a student housing property located in North Carolina. At closing, the outstanding principal balance was approximately $38.4 million . The loan has an interest rate of LIBOR plus 4.75% (plus fees) and an initial term of one and a half years. On August 3, 2017 , the Company declared a cash dividend of $0.27 per common share for the third quarter of 2017 . The third quarter 2017 dividend is payable on October 16, 2017 to common stockholders of record as of September 29, 2017 . |
SIGNIFICANT ACCOUNTING POLICI21
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. Interim financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2017 . |
Discontinued Operations | Discontinued Operations As discussed in Note 1 included in these consolidated financial statements, the Company completed the ACRE Capital Sale on September 30, 2016. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-20, Presentation of Financial Statements - Discontinued Operations , defines the criteria required for a disposal transaction to qualify for reporting as a discontinued operation. The Company determined that the ACRE Capital Sale met the criteria for discontinued operations. As a result, the operating results of ACRE Capital, which formerly comprised the Mortgage Banking segment, are presented separately in the Company’s consolidated financial statements as discontinued operations for the three and six months ended June 30, 2016 . The operating results of discontinued operations are included in the line item “Net income from operations of discontinued operations, net of income taxes” in the consolidated statements of operations for the three and six months ended June 30, 2016 . |
Variable Interest Entities | Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. |
Reclassifications | Reclassifications The Company presents, in discontinued operations, the results of operations that have been disposed of for which the disposition represents a strategic shift that has or will have a significant effect on the Company's operations and financial results. As a result of this presentation, retroactive reclassifications that change prior period numbers have been made. |
Loans Held for Investment | Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired. Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, the Company will record an allowance to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate. Each loan classified as held for investment is evaluated for impairment on a quarterly basis. Loans are collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. As of June 30, 2017 and December 31, 2016 , the Company did not recognize any impairment charges with respect to its loans held for investment. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Preferred equity investments, which are subordinate to any loans but senior to common equity, are accounted for as loans held for investment and are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired, and are included within loans held for investment in the Company’s consolidated balance sheets. The Company accretes or amortizes any discounts or premiums over the life of the related loan held for investment utilizing the effective interest method. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the terms of the respective debt instrument. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements) are included within other assets and both (ii) the Secured Term Loan (defined in Note 4 included in these consolidated financial statements) and (iii) debt securitizations are included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. |
Revenue Recognition | Revenue Recognition Interest income from loans held for investment is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income from loans held for investment over the initial loan term as a yield adjustment using the effective interest method. |
Net Interest Margin and Interest Expense | Net Interest Margin and Interest Expense Net interest margin within the consolidated statements of operations serves to measure the performance of the Company's loans held for investment as compared to its use of debt leverage. The Company includes interest income from its loans held for investment and interest expense related to its Secured Funding Agreements, securitizations debt and the Secured Term Loan (individually defined in Note 4 included in these consolidated financial statements) in net interest margin. |
Comprehensive Income | Comprehensive Income For the three and six months ended June 30, 2017 and 2016 , comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) . Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations , which clarifies the guidance in ASU No. 2014-09 and has the same effective date as the original standard. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , an update on identifying performance obligations and accounting for licenses of intellectual property. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which includes amendments for enhanced clarification of the guidance. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Revenue from Contracts with Customers (Topic 606) , the amendments in this update are of a similar nature to the items typically addressed in the technical corrections and improvements project. Additionally, in February 2017, the FASB issued ASU No. 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , an update on clarifying that a financial asset is within the scope of Subtopic 610-20 if it is deemed an “in-substance non-financial asset.” The application of this guidance is not expected to have a material impact on the Company’s consolidated financial statements, primarily because the majority of the Company’s revenue is accounted for under FASB ASC Topic 310, Receivables , which is scoped out of this standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted after December 15, 2018, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues and clarifies that in the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) . The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The adoption of this ASU will impact the presentation of the statement of cash flows, as well as require additional footnote disclosure to reconcile the balance sheet to the revised cash flow statement presentation. |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Reconciliation of interest income from loan held for investment | A reconciliation of the Company's interest income from loans held for investment, excluding non-controlling interests, to the Company's interest income from loans held for investment as included within its consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 is as follows ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Interest income from loans held for investment, excluding non-controlling interests $ 22,643 $ 17,640 $ 43,735 $ 35,101 Interest income from non-controlling interest investment held by third parties — 1,289 35 2,578 Interest income from loans held for investment $ 22,643 $ 18,929 $ 43,770 $ 37,679 |
Schedule of interest expense | For the three and six months ended June 30, 2017 and 2016 , interest expense is comprised of the following ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Secured funding agreements and securitizations debt $ 8,855 $ 6,657 $ 16,323 $ 13,425 Secured term loan 3,377 1,758 6,697 3,515 Interest expense $ 12,232 $ 8,415 $ 23,020 $ 16,940 |
LOANS HELD FOR INVESTMENT (Tabl
LOANS HELD FOR INVESTMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Schedule of loans held for investments | The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of June 30, 2017 and December 31, 2016 ($ in thousands): As of June 30, 2017 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,529,155 $ 1,538,370 4.8 % 6.0 % 1.9 Subordinated debt and preferred equity investments 112,280 113,392 10.7 % 11.8 % 3.2 Total loans held for investment portfolio $ 1,641,435 $ 1,651,762 5.2 % 6.4 % 2.0 As of December 31, 2016 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,181,569 $ 1,188,425 4.7 % 5.7 % 1.8 Subordinated debt and preferred equity investments 121,828 123,230 10.7 % 11.5 % 4.1 Total loans held for investment portfolio (excluding non-controlling interests held by third parties) (4) $ 1,303,397 $ 1,311,655 5.2 % 6.3 % 2.0 _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Minimum Loan Borrowing Spread is equal to (a) for floating rate loans, the margin above the applicable index rate (e.g., LIBOR) plus floors, if any, on such applicable index rates, and (b) for fixed rate loans, the applicable interest rate. (3) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premium or discount) and assumes no dispositions, early prepayments or defaults. The Total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2017 and December 31, 2016 as weighted by the Outstanding Principal balance of each loan. (4) The table above as of December 31, 2016 excludes non-controlling interests held by third parties. A reconciliation of the Carrying Amount of loans held for investment portfolio, excluding non-controlling interests held by third parties, to the Carrying Amount of loans held for investment, as included within the Company’s consolidated balance sheets, is presented below. |
Reconciliation of investment portfolio excluding non-controlling interests to loans held for investment | A reconciliation of the Company’s loans held for investment portfolio, excluding non-controlling interests held by third parties, to the Company’s loans held for investment as included within its consolidated balance sheets is as follows ($ in thousands): As of December 31, 2016 Carrying Amount Outstanding Principal Total loans held for investment portfolio (excluding non-controlling interests held by third parties) $ 1,303,397 $ 1,311,655 Non-controlling interest investment held by third parties 10,540 10,540 Loans held for investment $ 1,313,937 $ 1,322,195 |
Schedule of current investment portfolio | A more detailed listing of the Company’s investment portfolio based on information available as of June 30, 2017 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Various (5) Diversified $159.2 $158.4 L+4.35% 6.5% Oct 2018 (5) I/O Office TX 95.3 94.2 L+3.60% 5.3% July 2020 I/O Multifamily FL 89.7 89.3 L+4.75% 6.5% Sep 2019 I/O Various (6) Diversified 82.3 81.9 L+4.75% 6.9% Oct 2018 (6) I/O Retail IL 75.9 75.9 L+4.00% 5.6% Aug 2017 I/O Mixed-use NY 65.6 65.3 L+4.16% 5.8% Apr 2019 I/O Office TX 63.9 63.4 L+4.30% 6.4% Dec 2018 I/O Office CA 57.7 57.3 L+4.40% 6.2% Aug 2019 I/O Hotel CA 56.0 55.7 L+4.75% 6.7% Feb 2019 I/O Office IL 55.4 54.9 L+3.99% 5.7% Aug 2019 I/O Multifamily FL 53.7 53.3 L+3.65% 5.3% Mar 2021 I/O Office CO 53.4 52.7 L+4.15% 5.8% June 2021 I/O Office NJ 48.4 47.8 L+4.65% 6.5% July 2020 I/O Multifamily FL 45.4 45.2 L+4.75% 6.5% Sep 2019 I/O Student Housing CA 41.8 41.3 L+3.95% 5.7% July 2020 I/O Healthcare NY 41.6 41.6 L+5.00% 6.2% Dec 2017 I/O Hotel NY 37.3 37.2 L+4.75% 6.4% June 2018 I/O Hotel MI 35.2 35.2 L+4.15% 5.5% July 2018 (7) I/O Multifamily MN 34.1 33.9 L+4.75% 6.5% Oct 2019 I/O Industrial OH 32.4 32.4 L+4.20% 5.7% May 2018 P/I (8) Office OR 31.4 31.3 L+3.75% 5.4% Oct 2018 I/O Multifamily NY 31.4 31.1 L+4.55% 6.3% Feb 2019 I/O Retail IL 30.8 30.8 L+3.25% 4.9% Sep 2018 I/O Multifamily NY 29.4 29.3 L+3.75% 5.4% Oct 2017 I/O Multifamily TX 26.1 26.0 L+3.80% 5.2% Jan 2019 I/O Multifamily CA 25.0 24.8 L+3.85% 5.6% July 2020 I/O Student Housing AL 24.1 23.9 L+4.45% 6.2% Feb 2020 I/O Multifamily FL 21.4 21.2 L+4.25% 6.1% Feb 2019 I/O Multifamily CA 20.9 20.7 L+3.90% 5.5% Mar 2021 I/O Office CO 19.6 19.6 L+3.95% 5.6% Dec 2017 I/O Office PA 19.6 19.4 L+4.70% 6.4% Mar 2020 I/O Office FL 18.4 18.2 L+4.30% 6.1% Apr 2020 I/O Multifamily NY 16.0 15.9 L+3.85% 5.4% Nov 2017 I/O Subordinated Debt and Preferred Equity Investments: Multifamily GA/FL 38.8 38.6 L+11.85% (9) 13.3% June 2021 I/O Multifamily NY 33.3 33.2 L+8.07% 9.5% Jan 2019 I/O Office NJ 17.0 16.3 12.00% 12.8% Jan 2026 I/O (8) Office GA 14.3 14.3 9.50% 9.5% Aug 2017 I/O Office TX 10.0 9.9 14.00% 15.2% Dec 2018 I/O Total/Weighted Average $1,651.8 $1,641.4 6.4% _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premium or discount) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of June 30, 2017 or the LIBOR floor, as applicable. The Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2017 as weighted by the Outstanding Principal balance of each loan. (3) Certain loans are subject to contractual extension options that vary between one and two 12 -month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) The senior mortgage loan is collateralized by a portfolio of self-storage, retail and office properties. The total principal balance of the senior mortgage loan is $159.2 million as of June 30, 2017 , of which $122.2 million is allocable to the self-storage properties and $37.0 million is allocable to the retail and office properties (which amount with respect to the retail and office properties, among other payments, is due prior to the October 2018 stated maturity date). (6) The senior mortgage loan is collateralized by a portfolio of self-storage properties and one retail property. The total principal balance of the senior mortgage loan is $82.3 million as of June 30, 2017 , of which $70.2 million is allocable to the self-storage properties and $12.1 million is allocable to the retail property (which amount with respect to the retail property, among other payments, is due prior to the October 2018 stated maturity date). (7) In April 2017, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Michigan loan to July 2018. (8) In May 2017, amortization began on the senior Ohio loan, which had an outstanding principal balance of $32.4 million as of June 30, 2017 . In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $ 17.0 million as of June 30, 2017 . The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. (9) The preferred return is L+ 11.85% with 2.00% as payment-in-kind (“PIK”), to the extent cash flow is not available. There is no capped dollar amount on accrued PIK. |
Schedule of activity in loan portfolio | For the six months ended June 30, 2017 , the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2016 $ 1,313,937 Initial funding 412,321 Origination fees and discounts, net of costs (4,709 ) Additional funding 9,512 Amortizing payments (102 ) Loan payoffs (92,164 ) Origination fee accretion 2,640 Balance at June 30, 2017 $ 1,641,435 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding balances and total commitments under Financing Agreements | The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the BAML Facility, the CNB Facility, the MetLife Facility, the UBS Facility and the U.S. Bank Facility (individually defined below and collectively, the “Secured Funding Agreements”) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of June 30, 2017 and December 31, 2016 , the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): June 30, 2017 December 31, 2016 Outstanding Balance Total Outstanding Balance Total Wells Fargo Facility $ 334,295 $ 500,000 (1) $ 218,064 $ 325,000 Citibank Facility 204,943 250,000 (2) 302,240 250,000 (2) BAML Facility 72,928 125,000 77,679 125,000 CNB Facility — 50,000 — 50,000 MetLife Facility 53,130 180,000 53,130 180,000 UBS Facility 14,720 140,000 71,360 140,000 U.S. Bank Facility 129,721 185,989 (3) 58,240 125,000 Secured Term Loan 155,000 155,000 155,000 155,000 Total $ 964,737 $ 1,585,989 $ 935,713 $ 1,350,000 ______________________________________________________________________________ (1) In May 2017, the Company amended the Wells Fargo Facility (as defined below) to increase the facility’s commitment amount from $325.0 million to $500.0 million . (2) The Citibank Facility (as defined below) has an accordion feature that provides for an increase in the $250.0 million commitment amount with respect to approved assets, as determined by Citibank, N.A. in its sole discretion. (3) In June 2017, the Company amended the U.S. Bank Facility (as defined below) to increase the facility’s commitment amount from $125.0 million to $186.0 million . |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of loan commitments | As of June 30, 2017 and December 31, 2016 , the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of June 30, 2017 December 31, 2016 Total commitments $ 1,749,283 $ 1,380,805 Less: funded commitments (1,651,762 ) (1,311,655 ) Total unfunded commitments $ 97,521 $ 69,150 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted stock grants awarded | The following table details the restricted stock grants awarded as of June 30, 2017 : Grant Date Vesting Start Date Shares Granted May 1, 2012 July 1, 2012 35,135 June 18, 2012 July 1, 2012 7,027 July 9, 2012 October 1, 2012 25,000 June 26, 2013 July 1, 2013 22,526 November 25, 2013 November 25, 2016 30,381 January 31, 2014 August 31, 2015 48,273 February 26, 2014 February 26, 2014 12,030 February 27, 2014 August 27, 2014 22,354 June 24, 2014 June 24, 2014 17,658 June 24, 2015 July 1, 2015 25,555 April 25, 2016 July 1, 2016 10,000 June 27, 2016 July 1, 2016 24,680 April 25, 2017 April 25, 2018 81,710 June 7, 2017 July 1, 2017 18,224 Total 380,553 |
Schedule of restricted stock award activity | The following tables summarize the (i) non-vested shares of restricted stock and (ii) the vesting schedule of shares of restricted stock for the Company’s directors and officers as of June 30, 2017 : Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officer Total Balance at December 31, 2016 21,514 — 21,514 Granted 18,224 81,710 99,934 Vested (14,842 ) — (14,842 ) Forfeited — — — Balance at June 30, 2017 24,896 81,710 106,606 |
Future anticipated vesting schedule of restricted stock awards | Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officer Total 2017 10,780 — 10,780 2018 12,448 27,237 39,685 2019 1,668 27,237 28,905 2020 — 27,236 27,236 2021 — — — Total 24,896 81,710 106,606 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following information sets forth the computations of basic and diluted earnings per common share from continuing operations and discontinued operations for the three and six months ended June 30, 2017 and 2016 ($ in thousands, except share and per share data): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Net income from continuing operations, less non-controlling interests $ 6,713 $ 6,004 $ 13,166 $ 11,474 Net income from discontinued operations $ — $ 2,689 $ — $ 2,355 Divided by: Basic weighted average shares of common stock outstanding: 28,475,853 28,428,703 28,472,356 28,479,015 Non-vested restricted stock 70,771 67,130 42,511 69,929 Diluted weighted average shares of common stock outstanding: 28,546,624 28,495,833 28,514,867 28,548,944 Basic earnings per common share: Continuing operations $ 0.24 $ 0.21 $ 0.46 $ 0.40 Discontinued operations — 0.09 — 0.08 Net income $ 0.24 $ 0.31 $ 0.46 $ 0.49 Diluted earnings per common share: Continuing operations $ 0.24 $ 0.21 $ 0.46 $ 0.40 Discontinued operations — 0.09 — 0.08 Net income $ 0.24 $ 0.31 $ 0.46 $ 0.48 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the TRS's income tax provision | The income tax provision for the Company and the TRSs consisted of the following for the three and six months ended June 30, 2017 and 2016 ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Current $ 7 $ 3 $ 10 $ 7 Deferred — — — — Excise tax 20 — 85 — Total income tax expense, including excise tax $ 27 $ 3 $ 95 $ 7 TRS Holdings' income tax provision consisted of the following for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Current $ (127 ) $ (402 ) Deferred 1,159 682 Total income tax expense $ 1,032 $ 280 |
FAIR VALUE OF FINANCIAL INSTR29
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and estimated fair value of the Company's financial instruments not carried at fair value on the consolidated balance sheet | As of June 30, 2017 and December 31, 2016 , the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of June 30, 2017 December 31, 2016 Level in Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for investment 3 $ 1,641,435 $ 1,651,762 $ 1,313,937 $ 1,322,195 Financial liabilities: Secured funding agreements 2 $ 809,737 $ 809,737 $ 780,713 $ 780,713 Secured term loan 2 151,112 155,000 149,878 155,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 270,759 272,927 — — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Summary of related-party costs incurred by the Company and amounts payable to the Manager | The following table summarizes the related party costs incurred by the Company related to continuing operations for the three and six months ended June 30, 2017 and 2016 and amounts payable to the Company’s Manager as of June 30, 2017 and December 31, 2016 ($ in thousands): Incurred Payable For the three months ended June 30, For the six months ended June 30, As of 2017 2016 2017 2016 June 30, 2017 December 31, 2016 Affiliate Payments Management fees $ 1,541 $ 1,338 $ 3,085 $ 2,690 $ 1,541 $ 1,549 Incentive fees 113 — 381 — 113 27 General and administrative expenses 949 660 1,897 1,557 949 1,024 Direct costs 28 (1) 157 (2) 88 (1) 503 (2) 22 99 Total $ 2,631 $ 2,155 $ 5,451 $ 4,750 $ 2,625 $ 2,699 ______________________________________________________________________________ (1) For the three and six months ended June 30, 2017 , direct costs incurred are included in general and administrative expenses within the consolidated statements of operations. (2) For the three and six months ended June 30, 2016 , direct costs incurred are included in (i) general and administrative expenses of $108 thousand and $261 thousand , respectively, and (ii) interest expense of $49 thousand and $242 thousand , respectively, within the consolidated statements of operations. The following table summarizes the related party costs incurred by the Company related to discontinued operations for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Affiliate Payments Management fees (1) $ 145 $ 292 General and administrative expenses (1) 306 437 Direct costs (1) 4 33 Total $ 455 $ 762 ______________________________________________________________________________ (1) Management fees incurred are included in management fees to affiliate, general and administrative expenses incurred are included in general and administrative expenses reimbursed to affiliate and direct costs incurred are included in general and administrative expenses for the three and six months ended June 30, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
DIVIDENDS AND DISTRIBUTIONS (Ta
DIVIDENDS AND DISTRIBUTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
DIVIDENDS AND DISTRIBUTIONS | |
Summary of the Company's dividends declared | The following table summarizes the Company’s dividends declared during the six months ended June 30, 2017 and 2016 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount May 2, 2017 June 30, 2017 July 17, 2017 $ 0.27 $ 7,718 March 7, 2017 March 31, 2017 April 17, 2017 0.27 7,690 Total cash dividends declared for the six months ended June 30, 2017 $ 0.54 $ 15,408 May 5, 2016 June 30, 2016 July 15, 2016 $ 0.26 $ 7,413 March 1, 2016 March 31, 2016 April 15, 2016 0.26 7,429 Total cash dividends declared for the six months ended June 30, 2016 $ 0.52 $ 14,842 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of carrying value and maximum exposure to loss of unconsolidated VIEs | The following table presents the carrying value and the maximum exposure to loss of unconsolidated VIEs as of June 30, 2017 and December 31, 2016 ($ in thousands): As of June 30, 2017 December 31, 2016 Carrying value $ 38,536 $ 37,373 Maximum exposure to loss $ 38,816 $ 37,679 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | The following information reconciles the net income from operations of discontinued operations, net of income taxes, that are presented separately in the consolidated statements of operations ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Mortgage banking revenue: Servicing fees, net $ 2,924 $ 6,966 Gains from mortgage banking activities 10,813 13,172 Provision for loss sharing 61 289 Change in fair value of mortgage servicing rights (2,047 ) (3,895 ) Mortgage banking revenue 11,751 16,532 Expenses: Management fees to affiliate 145 292 Professional fees 162 371 Compensation and benefits 5,960 10,244 Transaction costs 515 515 General and administrative expenses 942 2,038 General and administrative expenses reimbursed to affiliate 306 437 Total expenses 8,030 13,897 Income from operations before income taxes 3,721 2,635 Income tax expense 1,032 280 Net income from operations of discontinued operations, net of income taxes $ 2,689 $ 2,355 |
Schedule of components of income tax expense | The income tax provision for the Company and the TRSs consisted of the following for the three and six months ended June 30, 2017 and 2016 ($ in thousands): For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Current $ 7 $ 3 $ 10 $ 7 Deferred — — — — Excise tax 20 — 85 — Total income tax expense, including excise tax $ 27 $ 3 $ 95 $ 7 TRS Holdings' income tax provision consisted of the following for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Current $ (127 ) $ (402 ) Deferred 1,159 682 Total income tax expense $ 1,032 $ 280 |
Schedule of effective tax rate reconciliation | The following table is a reconciliation of TRS Holdings’ statutory U.S. federal income tax rate to TRS Holdings’ effective tax rate for the three and six months ended June 30, 2016 : For the three months ended June 30, 2016 For the six months ended June 30, 2016 Federal statutory rate 35.0 % 35.0 % State income taxes 3.6 % 3.6 % Federal benefit of state tax deduction (1.3 )% (1.3 )% Effective tax rate 37.3 % 37.3 % |
Summary of related-party transactions | The following table summarizes the related party costs incurred by the Company related to continuing operations for the three and six months ended June 30, 2017 and 2016 and amounts payable to the Company’s Manager as of June 30, 2017 and December 31, 2016 ($ in thousands): Incurred Payable For the three months ended June 30, For the six months ended June 30, As of 2017 2016 2017 2016 June 30, 2017 December 31, 2016 Affiliate Payments Management fees $ 1,541 $ 1,338 $ 3,085 $ 2,690 $ 1,541 $ 1,549 Incentive fees 113 — 381 — 113 27 General and administrative expenses 949 660 1,897 1,557 949 1,024 Direct costs 28 (1) 157 (2) 88 (1) 503 (2) 22 99 Total $ 2,631 $ 2,155 $ 5,451 $ 4,750 $ 2,625 $ 2,699 ______________________________________________________________________________ (1) For the three and six months ended June 30, 2017 , direct costs incurred are included in general and administrative expenses within the consolidated statements of operations. (2) For the three and six months ended June 30, 2016 , direct costs incurred are included in (i) general and administrative expenses of $108 thousand and $261 thousand , respectively, and (ii) interest expense of $49 thousand and $242 thousand , respectively, within the consolidated statements of operations. The following table summarizes the related party costs incurred by the Company related to discontinued operations for the three and six months ended June 30, 2016 ($ in thousands): For the three months ended June 30, 2016 For the six months ended June 30, 2016 Affiliate Payments Management fees (1) $ 145 $ 292 General and administrative expenses (1) 306 437 Direct costs (1) 4 33 Total $ 455 $ 762 ______________________________________________________________________________ (1) Management fees incurred are included in management fees to affiliate, general and administrative expenses incurred are included in general and administrative expenses reimbursed to affiliate and direct costs incurred are included in general and administrative expenses for the three and six months ended June 30, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Millions | Jun. 28, 2016USD ($) |
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | |
ORGANIZATION | |
Proceeds from sale of business | $ 93 |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES - Disclosures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||
Impairments of loan held for investment | $ 0 | $ 0 | |||
Minimum period of past due loans to be placed on non accrual | 30 days | ||||
Revenue Recognition [Abstract] | |||||
Interest income from loans held for investment, excluding non-controlling interests | $ 22,643,000 | $ 17,640,000 | $ 43,735,000 | $ 35,101,000 | |
Interest income from non-controlling interest investment held by third parties | 0 | 1,289,000 | 35,000 | 2,578,000 | |
Interest income from loans held for investment | $ 22,643,000 | $ 18,929,000 | $ 43,770,000 | $ 37,679,000 |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 12,232 | $ 8,415 | $ 23,020 | $ 16,940 |
Secured funding agreements and securitizations debt | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 8,855 | 6,657 | 16,323 | 13,425 |
Secured term loan | ||||
Debt Instrument [Line Items] | ||||
Interest expense | $ 3,377 | $ 1,758 | $ 6,697 | $ 3,515 |
LOANS HELD FOR INVESTMENT - Nar
LOANS HELD FOR INVESTMENT - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)Loan | |
Receivables [Abstract] | |
Number of loans originated or co-originated | Loan | 38 |
Number of loans repaid or sold | Loan | 50 |
Total Commitment | $ 1,800 |
Loans held for investment | 1,700 |
Amount funded | 421.8 |
Amount of repayments | $ 81.7 |
Percentage of loans held for investment having LIBOR floors | 89.00% |
Weighted average floor (as a percent) | 0.56% |
LOANS HELD FOR INVESTMENT - Loa
LOANS HELD FOR INVESTMENT - Loans held for Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Mortgage Loans on Real Estate [Line Items] | ||
Carrying Amount | $ 1,641,435 | $ 1,303,397 |
Outstanding Principal | $ 1,651,762 | $ 1,311,655 |
Weighted Average Minimum Loan Borrowing Spread | 5.20% | 5.20% |
Weighted Average Unleveraged Effective Yield | 6.40% | 6.30% |
Weighted Average Remaining Life | 2 years | 2 years |
Senior mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Carrying Amount | $ 1,529,155 | $ 1,181,569 |
Outstanding Principal | $ 1,538,370 | $ 1,188,425 |
Weighted Average Minimum Loan Borrowing Spread | 4.80% | 4.70% |
Weighted Average Unleveraged Effective Yield | 6.00% | 5.70% |
Weighted Average Remaining Life | 1 year 10 months 24 days | 1 year 9 months 18 days |
Subordinated debt and preferred equity investments | ||
Mortgage Loans on Real Estate [Line Items] | ||
Carrying Amount | $ 112,280 | $ 121,828 |
Outstanding Principal | $ 113,392 | $ 123,230 |
Weighted Average Minimum Loan Borrowing Spread | 10.70% | 10.70% |
Weighted Average Unleveraged Effective Yield | 11.80% | 11.50% |
Weighted Average Remaining Life | 3 years 2 months 12 days | 4 years 1 month 6 days |
LOANS HELD FOR INVESTMENT - Rec
LOANS HELD FOR INVESTMENT - Reconciliation of Loans Held for Investment (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Mortgage Loans on Real Estate [Line Items] | ||
Carrying Amount | $ 1,641,435,000 | $ 1,303,397,000 |
Total loans held for investment portfolio (excluding non-controlling interests held by third parties), outstanding principal | 1,651,762,000 | 1,311,655,000 |
Loans held for investment, carrying amount | 1,641,435,000 | 1,313,937,000 |
Loans held for investment, outstanding principal | 1,322,195,000 | |
Non-controlling interest investment | ||
Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment, carrying amount | 0 | 10,540,000 |
Loans held for investment, outstanding principal | $ 0 | $ 10,540,000 |
LOANS HELD FOR INVESTMENT - Inv
LOANS HELD FOR INVESTMENT - Investment Portfolio (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017USD ($)extension_option | Dec. 31, 2016USD ($) | |
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 1,651,762 | $ 1,311,655 |
Carrying Amount | $ 1,641,435 | $ 1,303,397 |
Fixed interest rate | 5.20% | 5.20% |
Unleveraged Effective Yield | 6.40% | 6.30% |
Minimum | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of extension options | extension_option | 1 | |
Maximum | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of extension options | extension_option | 2 | |
Extension period of maturity date | 12 months | |
Senior Mortgage Loans | Industrial | NEW JERSEY | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 17,000 | |
Senior Mortgage Loans | Industrial | OHIO | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 32,400 | |
Subordinated debt and preferred equity investments | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 1,651,800 | |
Carrying Amount | $ 1,641,400 | |
Unleveraged Effective Yield | 6.40% | |
Subordinated debt and preferred equity investments | Various | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 11.85% | |
Subordinated debt and preferred equity investments | Office | TEXAS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 10,000 | |
Carrying Amount | $ 9,900 | |
Fixed interest rate | 14.00% | |
Unleveraged Effective Yield | 15.20% | |
Subordinated debt and preferred equity investments | Office | NEW JERSEY | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 17,000 | |
Carrying Amount | $ 16,300 | |
Fixed interest rate | 12.00% | |
Unleveraged Effective Yield | 12.80% | |
Subordinated debt and preferred equity investments | Office | GEORGIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 14,300 | |
Carrying Amount | $ 14,300 | |
Fixed interest rate | 9.50% | |
Unleveraged Effective Yield | 9.50% | |
Subordinated debt and preferred equity investments | Multifamily | GEORGIA AND FLORIDA | LIBOR | PIK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 2.00% | |
LIBOR Plus 4.35%, Due October 2018 | Senior Mortgage Loans | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 122,200 | |
LIBOR Plus 4.35%, Due October 2018 | Senior Mortgage Loans | Various | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 159,200 | |
Carrying Amount | $ 158,400 | |
Unleveraged Effective Yield | 6.50% | |
LIBOR Plus 4.35%, Due October 2018 | Senior Mortgage Loans | Various | Diversified | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.35% | |
LIBOR Plus 4.35%, Due October 2018 | Senior Mortgage Loans | Retail and Office | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 37,000 | |
LIBOR Plus 3.6%, Due July 2020 | Senior Mortgage Loans | Office | TEXAS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 95,300 | |
Carrying Amount | $ 94,200 | |
Unleveraged Effective Yield | 5.30% | |
LIBOR Plus 3.6%, Due July 2020 | Senior Mortgage Loans | Office | TEXAS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.60% | |
LIBOR Plus 4.75%, Due September 2019, Instrument 1 | Senior Mortgage Loans | Multifamily | FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 89,700 | |
Carrying Amount | $ 89,300 | |
Unleveraged Effective Yield | 6.50% | |
LIBOR Plus 4.75%, Due September 2019, Instrument 1 | Senior Mortgage Loans | Multifamily | FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 4.75%, Due October 2018 | Senior Mortgage Loans | Various | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 82,300 | |
Carrying Amount | $ 81,900 | |
Unleveraged Effective Yield | 6.90% | |
LIBOR Plus 4.75%, Due October 2018 | Senior Mortgage Loans | Various | Diversified | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 4.75%, Due October 2018 | Senior Mortgage Loans | Retail | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 12,100 | |
LIBOR Plus 4.75%, Due October 2018 | Senior Mortgage Loans | Self Storage | Diversified | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 70,200 | |
LIBOR Plus 4.00%, Due August 2017 | Senior Mortgage Loans | Retail | ILLINOIS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | 75,900 | |
Carrying Amount | $ 75,900 | |
Unleveraged Effective Yield | 5.60% | |
LIBOR Plus 4.00%, Due August 2017 | Senior Mortgage Loans | Retail | ILLINOIS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.00% | |
LIBOR Plus 4.16%, Due April 2019 | Senior Mortgage Loans | Mixed-use | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 65,600 | |
Carrying Amount | $ 65,300 | |
Unleveraged Effective Yield | 5.80% | |
LIBOR Plus 4.16%, Due April 2019 | Senior Mortgage Loans | Mixed-use | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.16% | |
LIBOR Plus 4.30%, Due December 2018 | Senior Mortgage Loans | Office | TEXAS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 63,900 | |
Carrying Amount | $ 63,400 | |
Unleveraged Effective Yield | 6.40% | |
LIBOR Plus 4.30%, Due December 2018 | Senior Mortgage Loans | Office | TEXAS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.30% | |
LIBOR Plus 4.40%, Due August 2019 | Senior Mortgage Loans | Office | CALIFORNIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 57,700 | |
Carrying Amount | $ 57,300 | |
Unleveraged Effective Yield | 6.20% | |
LIBOR Plus 4.40%, Due August 2019 | Senior Mortgage Loans | Office | CALIFORNIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.40% | |
LIBOR Plus 4.75%, Due February 2019 | Senior Mortgage Loans | Hotel | CALIFORNIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 56,000 | |
Carrying Amount | $ 55,700 | |
Unleveraged Effective Yield | 6.70% | |
LIBOR Plus 4.75%, Due February 2019 | Senior Mortgage Loans | Hotel | CALIFORNIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 3.99% Due August 2019 | Senior Mortgage Loans | Office | ILLINOIS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 55,400 | |
Carrying Amount | $ 54,900 | |
Unleveraged Effective Yield | 5.70% | |
LIBOR Plus 3.99% Due August 2019 | Senior Mortgage Loans | Office | ILLINOIS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.99% | |
LIBOR Plus 3.65%, Due March 2021 | Senior Mortgage Loans | Multifamily | FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 53,700 | |
Carrying Amount | $ 53,300 | |
Unleveraged Effective Yield | 5.30% | |
LIBOR Plus 3.65%, Due March 2021 | Senior Mortgage Loans | Multifamily | FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.65% | |
LIBOR Plus 4.15%, Due June 2021 | Senior Mortgage Loans | Office | COLORADO | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 53,400 | |
Carrying Amount | $ 52,700 | |
Unleveraged Effective Yield | 5.80% | |
LIBOR Plus 4.15%, Due June 2021 | Senior Mortgage Loans | Office | COLORADO | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.15% | |
LIBOR Plus 4.65%, Due June 2020 | Senior Mortgage Loans | Office | NEW JERSEY | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 48,400 | |
Carrying Amount | $ 47,800 | |
Unleveraged Effective Yield | 6.50% | |
LIBOR Plus 4.65%, Due June 2020 | Senior Mortgage Loans | Office | NEW JERSEY | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.65% | |
LIBOR Plus 4.75%, Due September 2019, Instrument 2 | Senior Mortgage Loans | Multifamily | FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 45,400 | |
Carrying Amount | $ 45,200 | |
Unleveraged Effective Yield | 6.50% | |
LIBOR Plus 4.75%, Due September 2019, Instrument 2 | Senior Mortgage Loans | Multifamily | FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 3.95%, Due July 2020 | Senior Mortgage Loans | Student Housing | CALIFORNIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 41,800 | |
Carrying Amount | $ 41,300 | |
Unleveraged Effective Yield | 5.70% | |
LIBOR Plus 3.95%, Due July 2020 | Senior Mortgage Loans | Student Housing | CALIFORNIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.95% | |
LIBOR Plus 5.00%, Due December 2017 | Senior Mortgage Loans | Healthcare | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 41,600 | |
Carrying Amount | $ 41,600 | |
Unleveraged Effective Yield | 6.20% | |
LIBOR Plus 5.00%, Due December 2017 | Senior Mortgage Loans | Healthcare | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 5.00% | |
LIBOR Plus 4.75%, Due June 2018 | Senior Mortgage Loans | Hotel | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 37,300 | |
Carrying Amount | $ 37,200 | |
Unleveraged Effective Yield | 6.40% | |
LIBOR Plus 4.75%, Due June 2018 | Senior Mortgage Loans | Hotel | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 4.15%, Due July 2018 | Senior Mortgage Loans | Hotel | MICHIGAN | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 35,200 | |
Carrying Amount | $ 35,200 | |
Unleveraged Effective Yield | 5.50% | |
LIBOR Plus 4.15%, Due July 2018 | Senior Mortgage Loans | Hotel | MICHIGAN | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.15% | |
LIBOR Plus 4.75%, Due October 2019 | Senior Mortgage Loans | Multifamily | MINNESOTA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 34,100 | |
Carrying Amount | $ 33,900 | |
Unleveraged Effective Yield | 6.50% | |
LIBOR Plus 4.75%, Due October 2019 | Senior Mortgage Loans | Multifamily | MINNESOTA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.75% | |
LIBOR Plus 4.20%, Due May 2018 | Senior Mortgage Loans | Industrial | OHIO | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 32,400 | |
Carrying Amount | $ 32,400 | |
Unleveraged Effective Yield | 5.70% | |
LIBOR Plus 4.20%, Due May 2018 | Senior Mortgage Loans | Industrial | OHIO | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.20% | |
LIBOR Plus 3.75%, Due October 2018 | Senior Mortgage Loans | Office | OREGON | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 31,400 | |
Carrying Amount | $ 31,300 | |
Unleveraged Effective Yield | 5.40% | |
LIBOR Plus 3.75%, Due October 2018 | Senior Mortgage Loans | Office | OREGON | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.75% | |
LIBOR Plus 4.55%, Due February 2019 | Senior Mortgage Loans | Multifamily | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 31,400 | |
Carrying Amount | $ 31,100 | |
Unleveraged Effective Yield | 6.30% | |
LIBOR Plus 4.55%, Due February 2019 | Senior Mortgage Loans | Multifamily | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.55% | |
LIBOR Plus 4.25%, Due August 2017 | Senior Mortgage Loans | Retail | ILLINOIS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 30,800 | |
Carrying Amount | $ 30,800 | |
Unleveraged Effective Yield | 4.90% | |
LIBOR Plus 4.25%, Due August 2017 | Senior Mortgage Loans | Retail | ILLINOIS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.25% | |
LIBOR Plus 3.75%, Due October 2017 | Senior Mortgage Loans | Multifamily | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 29,400 | |
Carrying Amount | $ 29,300 | |
Unleveraged Effective Yield | 5.40% | |
LIBOR Plus 3.75%, Due October 2017 | Senior Mortgage Loans | Multifamily | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.75% | |
LIBOR Plus 3.80%, Due January 2019 | Senior Mortgage Loans | Multifamily | TEXAS | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 26,100 | |
Carrying Amount | $ 26,000 | |
Unleveraged Effective Yield | 5.20% | |
LIBOR Plus 3.80%, Due January 2019 | Senior Mortgage Loans | Multifamily | TEXAS | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.80% | |
LIBOR Plus 3.85%, Due July 2020 | Senior Mortgage Loans | Multifamily | CALIFORNIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 25,000 | |
Carrying Amount | $ 24,800 | |
Unleveraged Effective Yield | 5.60% | |
LIBOR Plus 3.85%, Due July 2020 | Senior Mortgage Loans | Multifamily | CALIFORNIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.85% | |
LIBOR Plus 4.45%, Due February 2020 | Senior Mortgage Loans | Student Housing | ALABAMA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 24,100 | |
Carrying Amount | $ 23,900 | |
Unleveraged Effective Yield | 6.20% | |
LIBOR Plus 4.45%, Due February 2020 | Senior Mortgage Loans | Student Housing | ALABAMA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.45% | |
LIBOR Plus 4.25%, Due February 2019 | Senior Mortgage Loans | Multifamily | FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 21,400 | |
Carrying Amount | $ 21,200 | |
Unleveraged Effective Yield | 6.10% | |
LIBOR Plus 4.25%, Due February 2019 | Senior Mortgage Loans | Multifamily | FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.25% | |
LIBOR Plus 3.90%, Due March 2021 | Senior Mortgage Loans | Multifamily | CALIFORNIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 20,900 | |
Carrying Amount | $ 20,700 | |
Unleveraged Effective Yield | 5.50% | |
LIBOR Plus 3.90%, Due March 2021 | Senior Mortgage Loans | Multifamily | CALIFORNIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.90% | |
LIBOR Plus 3.95%, Due December 2017 | Senior Mortgage Loans | Office | COLORADO | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 19,600 | |
Carrying Amount | $ 19,600 | |
Unleveraged Effective Yield | 5.60% | |
LIBOR Plus 3.95%, Due December 2017 | Senior Mortgage Loans | Office | COLORADO | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.95% | |
LIBOR Plus 4.70%, Due March 2020 | Senior Mortgage Loans | Office | PENNSYLVANIA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 19,600 | |
Carrying Amount | $ 19,400 | |
Unleveraged Effective Yield | 6.40% | |
LIBOR Plus 4.70%, Due March 2020 | Senior Mortgage Loans | Office | PENNSYLVANIA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.70% | |
LIBOR Plus 4.30%, Due April 2020 | Senior Mortgage Loans | Office | FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 18,400 | |
Carrying Amount | $ 18,200 | |
Unleveraged Effective Yield | 6.10% | |
LIBOR Plus 4.30%, Due April 2020 | Senior Mortgage Loans | Office | FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 4.30% | |
LIBOR Plus 3.85%, Due November 2017 | Senior Mortgage Loans | Multifamily | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 16,000 | |
Carrying Amount | $ 15,900 | |
Unleveraged Effective Yield | 5.40% | |
LIBOR Plus 3.85%, Due November 2017 | Senior Mortgage Loans | Multifamily | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 3.85% | |
LIBOR Plus 11.85% Due June 2021 | Subordinated debt and preferred equity investments | Multifamily | GEORGIA AND FLORIDA | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 38,800 | |
Carrying Amount | $ 38,600 | |
Unleveraged Effective Yield | 13.30% | |
LIBOR Plus 11.85% Due June 2021 | Subordinated debt and preferred equity investments | Multifamily | GEORGIA AND FLORIDA | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 11.85% | |
LIBOR Plus 8.07%, Due January 2019 | Subordinated debt and preferred equity investments | Multifamily | NEW YORK | ||
Mortgage Loans on Real Estate [Line Items] | ||
Outstanding Principal | $ 33,300 | |
Carrying Amount | $ 33,200 | |
Unleveraged Effective Yield | 9.50% | |
LIBOR Plus 8.07%, Due January 2019 | Subordinated debt and preferred equity investments | Multifamily | NEW YORK | LIBOR | ||
Mortgage Loans on Real Estate [Line Items] | ||
Basis spread on variable rate | 8.07% |
LOANS HELD FOR INVESTMENT - Por
LOANS HELD FOR INVESTMENT - Portfolio Activity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Change in the activity of loan portfolio | ||||
Balance at the beginning of the period | $ 1,313,937,000 | |||
Initial funding | 412,321,000 | |||
Origination fees and discounts, net of costs | (4,709,000) | |||
Additional funding | 9,512,000 | |||
Amortizing payments | (102,000) | |||
Loan payoffs | (92,164,000) | |||
Origination fee accretion | 2,640,000 | $ 2,013,000 | ||
Balance at the end of the period | $ 1,641,435,000 | 1,641,435,000 | ||
Impairment charges recognized | $ 0 | $ 0 | $ 0 | $ 0 |
DEBT - Schedule of outstanding
DEBT - Schedule of outstanding balances and total commitments under Financing Agreements (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 964,737,000 | $ 935,713,000 | |
Total Commitment | 1,585,989,000 | 1,350,000,000 | |
Secured Term Loan | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 155,000,000 | 155,000,000 | |
Total Commitment | 155,000,000 | 155,000,000 | |
Wells Fargo Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 334,295,000 | 218,064,000 | |
Total Commitment | 500,000,000 | 325,000,000 | |
Wells Fargo Facility | Secured revolving funding facility | |||
Debt Instrument [Line Items] | |||
Total Commitment | 500,000,000 | $ 325,000,000 | |
Citibank Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 204,943,000 | 302,240,000 | |
Total Commitment | 250,000,000 | 250,000,000 | |
Citibank Facility | Secured revolving funding facility | |||
Debt Instrument [Line Items] | |||
Total Commitment | 250,000,000 | ||
BAML Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 72,928,000 | 77,679,000 | |
Total Commitment | 125,000,000 | 125,000,000 | |
City National Bank Facility | March 2014 CNB Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 0 | 0 | |
Total Commitment | 50,000,000 | 50,000,000 | |
MetLife Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 53,130,000 | 53,130,000 | |
Total Commitment | 180,000,000 | 180,000,000 | |
April 2014 UBS Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 14,720,000 | 71,360,000 | |
Total Commitment | 140,000,000 | 140,000,000 | |
U.S. Bank Facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 129,721,000 | 58,240,000 | |
Total Commitment | $ 185,989,000 | $ 125,000,000 |
DEBT - Disclosures (Details)
DEBT - Disclosures (Details) | Sep. 09, 2016USD ($) | Aug. 01, 2016 | Dec. 14, 2015 | Dec. 09, 2015USD ($) | Jun. 30, 2017USD ($)extension | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)extension | Jun. 30, 2016USD ($) | Dec. 08, 2016 | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,585,989,000 | $ 1,585,989,000 | $ 1,350,000,000 | ||||||||
Amount of debt discount on the initial draw down amount | $ 2,300,000 | ||||||||||
Maximum | |||||||||||
Funding agreements | |||||||||||
Extension period of maturity date | 12 months | ||||||||||
Secured term loan | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 155,000,000 | $ 155,000,000 | 155,000,000 | ||||||||
Non-utilization threshold percentage (less than) (as a percent) | 1.00% | 1.00% | |||||||||
Unused commitment fee, commitment period | 9 months | ||||||||||
Non-utilization/commitment fee | $ 0 | $ 202,000 | $ 0 | $ 404,000 | |||||||
Aggregate principal amount | $ 155,000,000 | $ 155,000,000 | |||||||||
Initial amount withdrawn from the maximum borrowing capacity | $ 80,000,000 | $ 75,000,000 | |||||||||
Debt discount on initial draw down (as a percent) | 8.50% | ||||||||||
Secured term loan | LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 6.00% | ||||||||||
LIBOR floor (as a percent) | 1.00% | 1.00% | |||||||||
Debt discount on initial draw down (as a percent) | 8.50% | ||||||||||
Wells Fargo Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | 325,000,000 | ||||||||
Wells Fargo Facility | Secured revolving funding facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | $ 325,000,000 | ||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||
Non-utilization threshold percentage (less than) (as a percent) | 75.00% | 75.00% | |||||||||
Non-utilization/commitment fee | $ 83,000 | 80,000 | $ 92,000 | $ 146,000 | |||||||
Wells Fargo Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 1.75% | ||||||||||
Wells Fargo Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.35% | ||||||||||
Citibank Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||
Citibank Facility | Secured revolving funding facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 | |||||||||
Number of extension periods available for maturity date | extension | 3 | 3 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||
Non-utilization/commitment fee | $ 62,000 | 25,000 | $ 82,000 | 93,000 | |||||||
Citibank Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.25% | 2.00% | |||||||||
Citibank Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.50% | 2.50% | |||||||||
BAML Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | 125,000,000 | $ 125,000,000 | 125,000,000 | ||||||||
BAML Facility | Secured revolving funding facility | |||||||||||
Funding agreements | |||||||||||
Non-utilization fee on average available balance (as a percent) | 0.125% | ||||||||||
BAML Facility | Secured funding facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 125,000,000 | $ 125,000,000 | |||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
Non-utilization/commitment fee | $ 22,000 | 16,000 | $ 31,000 | 32,000 | |||||||
Term of debt | 2 years | ||||||||||
Facility used on average (at least) (as a percent) | 50.00% | ||||||||||
BAML Facility | Secured funding facility | Minimum | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||
BAML Facility | Secured funding facility | Maximum | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.75% | ||||||||||
City National Bank Facility | March 2014 CNB Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | 50,000,000 | ||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
Non-utilization fee on average available balance (as a percent) | 0.375% | ||||||||||
Non-utilization/commitment fee | $ 47,000 | 2,000 | $ 94,000 | 45,000 | |||||||
City National Bank Facility | March 2014 CNB Facility | LIBOR for a one, two, three, six or 12-month | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 3.00% | ||||||||||
City National Bank Facility | March 2014 CNB Facility | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 1.00% | ||||||||||
City National Bank Facility | March 2014 CNB Facility | Federal funds rate | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 0.50% | ||||||||||
City National Bank Facility | March 2014 CNB Facility | Base rate | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 1.25% | ||||||||||
City National Bank Facility | March 2014 CNB Facility | Minimum | |||||||||||
Funding agreements | |||||||||||
Interest rate (as a percent) | 3.00% | 3.00% | |||||||||
Facility used on average (at least) (as a percent) | 75.00% | ||||||||||
MetLife Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 180,000,000 | $ 180,000,000 | 180,000,000 | ||||||||
MetLife Facility | Revolving master repurchase facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 180,000,000 | $ 180,000,000 | |||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
MetLife Facility | Revolving master repurchase facility | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.35% | ||||||||||
April 2014 UBS Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 140,000,000 | $ 140,000,000 | 140,000,000 | ||||||||
April 2014 UBS Facility | Revolving master repurchase facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | 140,000,000 | $ 140,000,000 | |||||||||
April 2014 UBS Facility | Assets subject to an advance for one year or less | Revolving master repurchase facility | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 1.88% | ||||||||||
April 2014 UBS Facility | Assets subject to an advance in excess of one year but less than two years | Revolving master repurchase facility | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.08% | ||||||||||
April 2014 UBS Facility | Assets subject to an advance for greater than two years | Revolving master repurchase facility | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.28% | ||||||||||
Bank of America | Secured revolving funding facility | ACRE Capital | |||||||||||
Funding agreements | |||||||||||
Non-utilization fee on average available balance (as a percent) | 0.125% | ||||||||||
U.S. Bank Facility | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 185,989,000 | $ 185,989,000 | $ 125,000,000 | ||||||||
U.S. Bank Facility | Revolving master repurchase facility | |||||||||||
Funding agreements | |||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | |||||||||
Extension period of maturity date | 12 months | ||||||||||
U.S. Bank Facility | Revolving master repurchase facility | 30 day LIBOR | |||||||||||
Funding agreements | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 186,000,000 | $ 186,000,000 | $ 125,000,000 | ||||||||
Interest rate margin (as a percent) | 0.00% | ||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||
Non-utilization/commitment fee | $ 42,000 | $ 0 | $ 83,000 | $ 0 | |||||||
U.S. Bank Facility | Revolving master repurchase facility | One-month LIBOR | |||||||||||
Funding agreements | |||||||||||
Interest rate margin (as a percent) | 2.25% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments to Fund (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Total commitments | $ 1,749,283 | $ 1,380,805 |
Less: funded commitments | (1,651,762) | (1,311,655) |
Total unfunded commitments | $ 97,521 | $ 69,150 |
EQUITY - Stock Buyback Program
EQUITY - Stock Buyback Program and Public Offering (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
May 31, 2015 | Jun. 30, 2017 | Jun. 30, 2017 | Feb. 29, 2016 | |
Stockholders' Equity Note [Abstract] | ||||
Stock buyback, authorized amount (up to) | $ 20,000,000 | $ 30,000,000 | ||
Stock buyback period | 1 year | |||
Common stock shares issued in public or private offerings | 0 | 0 |
EQUITY - Disclosures (Details)
EQUITY - Disclosures (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2012 | Dec. 31, 2016 | Apr. 23, 2012 | |
Equity Incentive Plan | ||||
Number of shares of common stock that may granted under the plan (in shares) | 690,000 | |||
Percentage of issued and outstanding shares of common stock eligible to be granted under the plan | 7.50% | |||
Non-controlling interest | ||||
Amount allocated to non-controlling interest | $ 0 | $ 10,644 | ||
ACRC KA Investor LLC | ||||
Non-controlling interest | ||||
Total equity of VIE | 21,700 | |||
VIE equity owned by the company | 11,100 | |||
Amount allocated to non-controlling interest | $ 10,600 | |||
Restricted stock | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 380,553 | |||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 21,514 | |||
Granted (in shares) | 99,934 | |||
Vested (in shares) | (14,842) | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 106,606 | |||
Future Anticipated Vesting Schedule | ||||
2017 (in shares) | 10,780 | |||
2018 (in shares) | 39,685 | |||
2019 (in shares) | 28,905 | |||
2020 (in shares) | 27,236 | |||
2021 (in shares) | 0 | |||
Total (in shares) | 106,606 | |||
Restricted stock | Minimum | ||||
Equity Incentive Plan | ||||
Award vesting period | 1 year | |||
Restricted stock | Maximum | ||||
Equity Incentive Plan | ||||
Award vesting period | 4 years | |||
Restricted stock | Directors | ||||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 21,514 | |||
Granted (in shares) | 18,224 | |||
Vested (in shares) | (14,842) | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 24,896 | |||
Future Anticipated Vesting Schedule | ||||
2017 (in shares) | 10,780 | |||
2018 (in shares) | 12,448 | |||
2019 (in shares) | 1,668 | |||
2020 (in shares) | 0 | |||
2021 (in shares) | 0 | |||
Total (in shares) | 24,896 | |||
Restricted stock | Officer | ||||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 0 | |||
Granted (in shares) | 81,710 | |||
Vested (in shares) | 0 | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 81,710 | |||
Future Anticipated Vesting Schedule | ||||
2017 (in shares) | 0 | |||
2018 (in shares) | 27,237 | |||
2019 (in shares) | 27,237 | |||
2020 (in shares) | 27,236 | |||
2021 (in shares) | 0 | |||
Total (in shares) | 81,710 | |||
Restricted stock | May 1, 2012 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 35,135 | |||
Restricted stock | June 18, 2012 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 7,027 | |||
Restricted stock | July 9, 2012 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 25,000 | |||
Restricted stock | June 26, 2013 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 22,526 | |||
Restricted stock | November 25, 2013 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 30,381 | |||
Restricted stock | January 31, 2014 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 48,273 | |||
Restricted stock | February 26, 2014 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 12,030 | |||
Restricted stock | February 27, 2014 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 22,354 | |||
Restricted stock | June 24, 2014 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 17,658 | |||
Restricted stock | June 24, 2015 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 25,555 | |||
Restricted stock | April 25, 2016 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 10,000 | |||
Restricted stock | June 27, 2016 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 24,680 | |||
Restricted stock | April 25, 2017 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 81,710 | |||
Restricted stock | June 7, 2017 | ||||
Equity Incentive Plan | ||||
Shares Granted (in shares) | 18,224 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations, less non-controlling interests | $ 6,713 | $ 6,004 | $ 13,166 | $ 11,474 |
Net income from discontinued operations | $ 0 | $ 2,689 | $ 0 | $ 2,355 |
Divided by: | ||||
Basic weighted average shares of common stock outstanding (in shares) | 28,475,853 | 28,428,703 | 28,472,356 | 28,479,015 |
Non-vested restricted stock (in shares) | 70,771 | 67,130 | 42,511 | 69,929 |
Diluted weighted average shares of common stock outstanding (in shares) | 28,546,624 | 28,495,833 | 28,514,867 | 28,548,944 |
Basic earnings per common share: | ||||
Continuing operations (in dollars per share) | $ 0.24 | $ 0.21 | $ 0.46 | $ 0.40 |
Discontinued operations held for sale (in dollars per share) | 0 | 0.09 | 0 | 0.08 |
Net income per common share (in dollars per share) | 0.24 | 0.31 | 0.46 | 0.49 |
Diluted earnings per common share: | ||||
Continuing operations (in dollars per share) | 0.24 | 0.21 | 0.46 | 0.40 |
Discontinued operations held for sale (in dollars per share) | 0 | 0.09 | 0 | 0.08 |
Net income per common share (in dollars per share) | $ 0.24 | $ 0.31 | $ 0.46 | $ 0.48 |
INCOME TAX - Schedule of Compon
INCOME TAX - Schedule of Components of Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Components of the company's income tax provision | ||||
Deferred | $ 0 | $ 682 | ||
Total income tax expense, including excise tax | $ 27 | $ 3 | $ 95 | 7 |
Excise tax rate | 4.00% | |||
ACRE Capital Sale | ||||
Components of the company's income tax provision | ||||
Current | 7 | 3 | $ 10 | 7 |
Deferred | 0 | 0 | 0 | 0 |
Excise tax | 20 | 0 | 85 | 0 |
Total income tax expense, including excise tax | $ 27 | 3 | $ 95 | 7 |
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | ||||
Components of the company's income tax provision | ||||
Current | (127) | (402) | ||
Deferred | 1,159 | 682 | ||
Total income tax expense, including excise tax | $ 1,032 | $ 280 |
FAIR VALUE OF FINANCIAL INSTR49
FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying Value and Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | $ 1,641,435 | $ 1,303,397 |
Carrying Value | ||
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | 1,641,435 | 1,313,937 |
Financial liabilities: | ||
Secured funding agreements | 809,737 | 780,713 |
Secured term loan | 151,112 | 149,878 |
Collateralized loan obligation securitization debt (consolidated VIE) | 270,759 | 0 |
Fair Value | Level II | ||
Financial liabilities: | ||
Secured funding agreements | 809,737 | 780,713 |
Secured term loan | 155,000 | 155,000 |
Fair Value | Level III | ||
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | 1,651,762 | 1,322,195 |
Financial liabilities: | ||
Collateralized loan obligation securitization debt (consolidated VIE) | $ 272,927 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2014USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)quarter | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 1,585,989,000 | $ 1,585,989,000 | $ 1,350,000,000 | |||
Management fee renewal term | 1 year | |||||
Management fee look back period | 24 months | |||||
Multiplier of average annual base management fee to arrive at termination fee | 3 | |||||
ACREM | ||||||
Related Party Transaction [Line Items] | ||||||
Base management fees as a percentage of stockholders' equity per annum | 1.50% | |||||
Incentive fee payable (not less than) | 0 | $ 0 | ||||
Percentage multiplied to arrive at first value affecting calculation of incentive fees | 20.00% | |||||
Previous period for which core earnings are considered to arrive at first value affecting calculation of incentive fees | 12 months | |||||
Previous period for product of weighted average price per share and weighted average number of shares of common stock and other shares | 12 months | |||||
Percentage multiplied to arrive at difference of first value affecting calculation of incentive fees | 8.00% | |||||
Period for which cumulative core earnings must be greater than zero | quarter | 9 | |||||
Period whose fiscal quarters are considered to arrive at first value affecting calculation of incentive fees | 12 months | |||||
Period considered to arrive at second value affecting calculation of incentive fees | 3 years | |||||
Minimum cumulative core earnings (greater than) | 0 | $ 0 | ||||
Incentive fees incurred | $ 113,000 | $ 0 | $ 381,000 | $ 0 | ||
Ares Investments Holdings LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Credit support fee agreed to be paid as percentage of average outstanding balance (as a percent) | 1.50% | |||||
Line of credit facility, maximum borrowing capacity | $ 75,000,000 | |||||
Credit support fee incurred | $ 0 | $ 0 |
RELATED PARTY TRANSACTION - Rel
RELATED PARTY TRANSACTION - Related Party Costs Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Payable | $ 2,625 | $ 2,625 | $ 2,699 | ||
Continuing Operations | ACREM | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 2,631 | $ 2,155 | 5,451 | $ 4,750 | |
Payable | 2,625 | 2,625 | 2,699 | ||
Continuing Operations | ACREM | Management fees | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 1,541 | 1,338 | 3,085 | 2,690 | |
Payable | 1,541 | 1,541 | 1,549 | ||
Continuing Operations | ACREM | Incentive fees | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 113 | 0 | 381 | 0 | |
Payable | 113 | 113 | 27 | ||
Continuing Operations | ACREM | General and administrative expenses | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 949 | 660 | 1,897 | 1,557 | |
Payable | 949 | 949 | 1,024 | ||
Continuing Operations | ACREM | Direct costs | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 28 | 157 | 88 | 503 | |
Payable | $ 22 | $ 22 | $ 99 | ||
General and administrative expenses | Continuing Operations | ACREM | Direct costs | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 108 | 261 | |||
Interest Expense | Continuing Operations | ACREM | Direct costs | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 49 | $ 242 |
DIVIDENDS AND DISTRIBUTIONS (De
DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 07, 2017 | Mar. 02, 2017 | May 05, 2016 | Mar. 01, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
DIVIDENDS AND DISTRIBUTIONS | ||||||||
Dividends per share amount declared (in dollars per share) | $ 0.27 | $ 0.27 | $ 0.26 | $ 0.26 | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 |
Total cash dividends | $ 7,690 | $ 7,718 | $ 7,413 | $ 7,429 | $ 15,408 | $ 14,842 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) | Mar. 02, 2017USD ($)Loan | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 19, 2014USD ($)property |
Variable Interest Entity [Line Items] | |||||
Carrying Amount | $ 1,641,435,000 | $ 1,641,435,000 | $ 1,303,397,000 | ||
Loans held for investment related to consolidated VIE | 341,158,000 | 341,158,000 | 21,514,000 | ||
Primary beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss | $ 68,200,000 | $ 68,200,000 | |||
Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85% | |||||
Variable Interest Entity [Line Items] | |||||
Number of properties collateralized for mortgage loan | Loan | 12 | ||||
Collateral amount | $ 341,200,000 | ||||
Offered Certificates | |||||
Variable Interest Entity [Line Items] | |||||
Prepayment fee, percent | 1.00% | 1.00% | |||
Mortgaged Assets | |||||
Variable Interest Entity [Line Items] | |||||
Prepayment fee, percent | 1.00% | 1.00% | |||
Interest expense | $ 1,900,000 | $ 2,500,000 | |||
Parent Company | Secured funding agreements and securitizations debt | |||||
Variable Interest Entity [Line Items] | |||||
Carrying Amount | 68,200,000 | ||||
Parent Company | Offered Certificates | |||||
Variable Interest Entity [Line Items] | |||||
Preferred equity fully funded amount | 32,400,000 | ||||
Holdco | |||||
Variable Interest Entity [Line Items] | |||||
Loans held for investment related to consolidated VIE | 21,300,000 | ||||
Holdco | Primary beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss | $ 11,000,000 | ||||
Holdco | Mortgaged Assets | |||||
Variable Interest Entity [Line Items] | |||||
Principal amount of certificates retained by wholly owned subsidiary of the entity | 35,800,000 | ||||
ACRE Commercial Mortgage 2017-FL3 Ltd And ACRE Commercial Mortgage 2017-FL3 LLC | Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85% | |||||
Variable Interest Entity [Line Items] | |||||
Carrying Amount | $ 308,800,000 | ||||
ACRC KA Investor LLC | |||||
Variable Interest Entity [Line Items] | |||||
Preferred equity fully funded amount | $ 170,000,000 | ||||
Number of properties | property | 22 | ||||
Controlling financial interest held by parent | 51.00% | ||||
Controlling financial interest held by third party institutional investors | 49.00% | ||||
Fixed rate of return on investment | 10.95% |
VARIABLE INTEREST ENTITIES - Ca
VARIABLE INTEREST ENTITIES - Carrying Value and Maximum Exposure to Loss of VIE (Details) - Not primary beneficiary - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Carrying value and the maximum exposure of unconsolidated VIEs | ||
Carrying value | $ 38,536 | $ 37,373 |
Maximum exposure to loss | $ 38,816 | $ 37,679 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) | Jun. 28, 2016USD ($) | Jun. 30, 2016derivative_instrument | Jun. 30, 2017USD ($) | Jun. 30, 2016derivative_instrument | Dec. 31, 2016USD ($) | Oct. 31, 2014USD ($)note |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Weighted Average Remaining Life | 2 years | 2 years | ||||
Outstanding Balance | $ 809,737,000 | $ 780,713,000 | ||||
ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from sale of business | $ 93,000,000 | |||||
Minimum | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Weighted Average Remaining Life | 10 years | |||||
ACRE Capital Sale | Notes | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Notes | note | 2 | |||||
Notes One | ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Aggregate principal amount | $ 44,000,000 | |||||
Revolving Promissory Note | ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Aggregate principal amount | $ 8,000,000 | |||||
Notes Receivable And Revolving Promissory Note Receivable | ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Outstanding Balance | $ 51,900,000 | |||||
Commitments to sell loans | Not Designated as Hedging Instrument | ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of instrument held | derivative_instrument | 13 | 19 | ||||
Forward Contracts | Not Designated as Hedging Instrument | ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of instrument held | derivative_instrument | 13 | 19 |
DISCONTINUED OPERATIONS - Net I
DISCONTINUED OPERATIONS - Net Income of Discontinued Operations Held for Sale (Details) - ACRE Capital Sale - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Servicing fees, net | $ 2,924 | $ 6,966 |
Gains from mortgage banking activities | 10,813 | 13,172 |
Provision for loss sharing | 61 | 289 |
Change in fair value of mortgage servicing rights | (2,047) | (3,895) |
Mortgage banking revenue | 11,751 | 16,532 |
Management fees to affiliate | 145 | 292 |
Professional fees | 162 | 371 |
Compensation and benefits | 5,960 | 10,244 |
Transaction costs | 515 | 515 |
General and administrative expenses | 942 | 2,038 |
General and administrative expenses reimbursed to affiliate | 306 | 437 |
Total expenses | 8,030 | 13,897 |
Income from operations before income taxes | 3,721 | 2,635 |
Income tax expense | 1,032 | 280 |
Net income from operations of discontinued operations, net of income taxes | $ 2,689 | $ 2,355 |
DISCONTINUED OPERATIONS - Incom
DISCONTINUED OPERATIONS - Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Expense [Abstract] | ||||
Total income tax expense, including excise tax | $ 27 | $ 3 | $ 95 | $ 7 |
ACRE Capital Sale | ||||
Income Tax Expense [Abstract] | ||||
Total income tax expense, including excise tax | $ 27 | 3 | $ 95 | 7 |
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | ||||
Income Tax Expense [Abstract] | ||||
Current | (127) | (402) | ||
Deferred | 1,159 | 682 | ||
Total income tax expense, including excise tax | $ 1,032 | $ 280 | ||
Reconciliation of the Company's effective tax rate to the Company's statutory federal income tax rate | ||||
Federal statutory rate | 35.00% | 35.00% | ||
State income taxes | 3.60% | 3.60% | ||
Federal benefit of state tax deduction | (1.30%) | (1.30%) | ||
Effective tax rate | 37.30% | 37.30% |
DISCONTINUED OPERATIONS - Relat
DISCONTINUED OPERATIONS - Related Party Transactions (Details) - ACRE Capital Sale - Discontinued Operations - ACREM - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Incurred | $ 455 | $ 762 |
Management fees | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Incurred | 145 | 292 |
General and administrative expenses | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Incurred | 306 | 437 |
Direct costs | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Incurred | $ 4 | $ 33 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Aug. 03, 2017 | Jul. 17, 2017 | Jul. 12, 2017 | Mar. 07, 2017 | Mar. 02, 2017 | May 05, 2016 | Mar. 01, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Subsequent Events | ||||||||||||
Outstanding Principal | $ 1,651,762,000 | $ 1,651,762,000 | $ 1,311,655,000 | |||||||||
Carrying Amount | $ 1,641,435,000 | $ 1,641,435,000 | $ 1,303,397,000 | |||||||||
Dividends declared per share of common stock (in dollars per share) | $ 0.27 | $ 0.27 | $ 0.26 | $ 0.26 | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 | ||||
Subsequent event | ||||||||||||
Subsequent Events | ||||||||||||
Dividends declared per share of common stock (in dollars per share) | $ 0.27 | |||||||||||
Senior Mortgage Loans | Multifamily | CALIFORNIA | LIBOR Plus 33.8%, Due July 2020 | Subsequent event | ||||||||||||
Subsequent Events | ||||||||||||
Outstanding Principal | $ 18,100,000 | |||||||||||
Carrying Amount | $ 13,400,000 | |||||||||||
Basis spread on variable rate | 3.80% | |||||||||||
Term of debt | 3 years | |||||||||||
Senior Mortgage Loans | Student Housing | NORTH CAROLINA | LIBOR Plus 4.75%, Due January 2019 | Subsequent event | ||||||||||||
Subsequent Events | ||||||||||||
Outstanding Principal | $ 39,700,000 | |||||||||||
Carrying Amount | $ 38,400,000 | |||||||||||
Basis spread on variable rate | 4.75% | |||||||||||
Term of debt | 1 year 6 months |