Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 07, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'STARWOOD PROPERTY TRUST, INC. | ' |
Entity Central Index Key | '0001465128 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 195,261,425 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||||
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | $536,834 | ' | $177,671 | $144,199 | $114,027 |
Restricted cash | 82,706 | ' | 3,429 | ' | ' |
Loans held-for-investment, net (subject to $95,000 participation liability) | 3,790,262 | ' | 2,914,434 | ' | ' |
Loans held-for-sale ($279,121 and $0 held at fair value) | 345,139 | ' | ' | ' | ' |
Loans transferred as secured borrowings | 85,590 | ' | 85,901 | ' | ' |
Investment securities ($529,423 and $884,254 held at fair value) | 566,793 | ' | 884,254 | ' | ' |
Intangible assets - servicing rights ($158,023 and $0 held at fair value) | 187,732 | ' | ' | ' | ' |
Residential real estate, net | 548,022 | ' | 99,115 | ' | ' |
Non-performing residential loans | 197,716 | ' | 68,883 | ' | ' |
Investment in unconsolidated entities | 138,168 | ' | 32,318 | ' | ' |
Goodwill | 107,099 | ' | ' | ' | ' |
Derivative assets | 9,513 | ' | 9,227 | ' | ' |
Accrued interest receivable | 20,952 | ' | 24,120 | ' | ' |
Other assets | 98,383 | ' | 25,021 | ' | ' |
VIE assets, at fair value | 97,359,666 | ' | ' | ' | ' |
Total Assets | 104,074,575 | ' | 4,324,373 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 189,172 | ' | 30,094 | ' | ' |
Related-party payable | 26,788 | ' | 1,803 | ' | ' |
Dividends payable | 90,130 | ' | 73,796 | 51,629 | ' |
Derivative liabilities | 32,252 | ' | 27,770 | ' | ' |
Secured financing agreements, net | 1,312,044 | ' | 1,305,812 | ' | ' |
Convertible senior notes, net | 995,072 | ' | ' | ' | ' |
Loan transfer secured borrowings | 86,682 | ' | 87,893 | ' | ' |
Loan participation liability | 95,000 | ' | ' | ' | ' |
VIE liabilities, at fair value | 96,934,006 | ' | ' | ' | ' |
Total Liabilities | 99,761,146 | ' | 1,527,168 | ' | ' |
Commitments and contingencies (Note 23) | ' | ' | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Preferred stock, $0.01 per share, 100,000,000 shares authorized, no shares issued and outstanding | ' | ' | ' | ' | ' |
Common stock, $0.01 per share, 500,000,000 shares authorized, 195,887,275 issued and 195,261,425 outstanding as of September 30, 2013 and 136,125,356 issued and 135,499,506 outstanding as of December 31, 2012 | 1,959 | ' | 1,361 | ' | ' |
Additional paid-in capital | 4,295,058 | ' | 2,721,353 | ' | ' |
Treasury stock (625,850 shares) | -10,642 | ' | -10,642 | ' | ' |
Accumulated other comprehensive income | 69,287 | 60,285 | 79,675 | ' | ' |
Accumulated deficit | -85,339 | ' | -72,401 | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 4,270,323 | ' | 2,719,346 | ' | ' |
Non-controlling interests in consolidated subsidiaries | 43,106 | ' | 77,859 | ' | ' |
Total Equity | 4,313,429 | ' | 2,797,205 | 2,301,238 | 1,765,147 |
Total Liabilities and Equity | $104,074,575 | ' | $4,324,373 | ' | ' |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ' | ' |
Loans held-for-investment, participation liability | $95,000 | $95,000 |
Loans held-for-sale at fair value | 279,121 | 0 |
Investment securities, fair value | 529,423 | 884,254 |
Intangible assets - servicing rights at fair value | $158,023 | $0 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 195,887,275 | 136,125,356 |
Common stock, shares outstanding | 195,261,425 | 135,499,506 |
Treasury stock, shares | 625,850 | 625,850 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Interest income from loans | $94,045 | $56,261 | $236,671 | $179,078 |
Interest income from investment securities | 17,804 | 16,585 | 52,621 | 40,404 |
Servicing fees | 36,509 | ' | 75,644 | ' |
Other revenues | 2,098 | 66 | 4,077 | 180 |
Rental income | 5,080 | 59 | 8,733 | 59 |
Total revenues | 155,536 | 72,971 | 377,746 | 219,721 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 24,235 | 14,659 | 58,675 | 42,673 |
Interest expense | 36,743 | 12,030 | 77,678 | 34,345 |
General and administrative | 48,335 | 3,084 | 97,769 | 8,838 |
Business combination costs | 342 | ' | 17,958 | ' |
Acquisition and investment pursuit costs | 1,177 | 622 | 4,495 | 2,737 |
Residential properties and non-performing loans - other operating costs | 6,023 | 327 | 10,622 | 327 |
Depreciation and amortization | 4,988 | 78 | 8,644 | 78 |
Loan loss allowance | 1,160 | ' | 1,915 | ' |
Other expense | 304 | ' | 533 | ' |
Total costs and expenses | 123,307 | 30,800 | 278,289 | 88,998 |
Income before other income, income taxes and non-controlling interests | 32,229 | 42,171 | 99,457 | 130,723 |
Other income: | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,963 | ' | 79,912 | ' |
Change in fair value of servicing rights | -1,867 | ' | 1,031 | ' |
Change in fair value of investment securities, net | -2,278 | ' | -3,265 | ' |
Change in fair value of mortgage loans held-for-sale, net | 25,857 | ' | 26,315 | -5,760 |
Earnings from unconsolidated entities | 4,577 | 787 | 10,915 | 2,739 |
Gain on sale of investments, net | 8,059 | 9,017 | 22,968 | 19,147 |
Loss on derivative financial instruments, net | -22,451 | -7,561 | -65 | -9,784 |
Foreign currency gain, net | 9,580 | 6,725 | 3,495 | 11,222 |
Total Other-than-temporary impairment ("OTTI") | -86 | -737 | -1,460 | -5,582 |
Noncredit portion of OTTI recognized in other comprehensive income (loss) | 34 | 61 | 1,007 | 2,854 |
Net impairment losses recognized in earnings | -52 | -676 | -453 | -2,728 |
Other income | 3,705 | 180 | 3,744 | 530 |
Total other income | 73,093 | 8,472 | 144,597 | 15,366 |
Income before income taxes and non-controlling interests | 105,322 | 50,643 | 244,054 | 146,089 |
Income tax provision | 13,721 | 301 | 25,691 | 840 |
Net income | 91,601 | 50,342 | 218,363 | 145,249 |
Net income attributable to non-controlling interests | 1,886 | 130 | 4,124 | 388 |
Net income attributable to Starwood Property Trust, Inc. | $89,715 | $50,212 | $214,239 | $144,861 |
Net income per share of common stock: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.52 | $0.43 | $1.36 | $1.34 |
Diluted (in dollars per share) | $0.52 | $0.43 | $1.36 | $1.34 |
Distributions declared per common share (in dollars per share) | $0.46 | $0.44 | $1.36 | $1.32 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net income | $91,601 | $50,342 | $218,363 | $145,249 |
Other comprehensive income (loss) (net change by component): | ' | ' | ' | ' |
Cash flow hedges | -197 | -411 | 1,583 | -1,623 |
Unrealized gain (loss) on available-for-sale securities | -1,768 | 50,307 | -15,895 | 67,804 |
Foreign currency remeasurement | 10,967 | ' | 3,924 | ' |
Other comprehensive income (loss) | 9,002 | 49,896 | -10,388 | 66,181 |
Comprehensive income | 100,603 | 100,238 | 207,975 | 211,430 |
Less: Comprehensive income attributable to non-controlling interests | -1,886 | -130 | -4,124 | -388 |
Comprehensive income attributable to Starwood Property Trust, Inc. | $98,717 | $100,108 | $203,851 | $211,042 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Equity (USD $) | Total | Total Starwood Property Trust, Inc. Stockholders' Equity | Common stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2011 | $1,765,147 | $1,759,488 | $938 | $1,828,319 | ($10,642) | ($55,129) | ($3,998) | $5,659 |
Balance (in shares) at Dec. 31, 2011 | ' | ' | 93,811,351 | ' | 625,850 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from public offering of common stock | 457,321 | 457,321 | 230 | 457,091 | ' | ' | ' | ' |
Proceeds from public offering of common stock (in shares) | ' | ' | 23,000,000 | ' | ' | ' | ' | ' |
Equity offering costs | -2,250 | -2,250 | ' | -2,250 | ' | ' | ' | ' |
Stock-based compensation | 12,296 | 12,296 | 6 | 12,290 | ' | ' | ' | ' |
Stock-based compensation (in shares) | ' | ' | 584,427 | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock | 2,522 | 2,522 | 1 | 2,521 | ' | ' | ' | ' |
Manager incentive fee paid in stock (in shares) | ' | ' | 120,423 | ' | ' | ' | ' | ' |
Net income | 145,249 | 144,861 | ' | ' | ' | 144,861 | ' | 388 |
Dividends declared, $1.36 and $1.32 per share for period ended September 30, 2013 and 2012, respectively | -144,670 | -144,670 | ' | ' | ' | -144,670 | ' | ' |
Other comprehensive income (loss), net | 66,181 | 66,181 | ' | ' | ' | ' | 66,181 | ' |
Distribution to non-controlling interests | -558 | ' | ' | ' | ' | ' | ' | -558 |
Balance at Sep. 30, 2012 | 2,301,238 | 2,295,749 | 1,175 | 2,297,971 | -10,642 | -54,938 | 62,183 | 5,489 |
Balance (in shares) at Sep. 30, 2012 | ' | ' | 117,516,201 | ' | 625,850 | ' | ' | ' |
Balance at Dec. 31, 2012 | 2,797,205 | 2,719,346 | 1,361 | 2,721,353 | -10,642 | -72,401 | 79,675 | 77,859 |
Balance (in shares) at Dec. 31, 2012 | 136,125,356 | ' | 136,125,356 | ' | 625,850 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from public offering of common stock | 1,513,519 | 1,513,519 | 593 | 1,512,926 | ' | ' | ' | ' |
Proceeds from public offering of common stock (in shares) | ' | ' | 59,225,000 | ' | ' | ' | ' | ' |
Equity offering costs | -955 | -955 | ' | -955 | ' | ' | ' | ' |
Convertible senior notes | 48,502 | 48,502 | ' | 48,502 | ' | ' | ' | ' |
Stock-based compensation | 12,870 | 12,870 | 5 | 12,865 | ' | ' | ' | ' |
Stock-based compensation (in shares) | ' | ' | 523,731 | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock | 367 | 367 | ' | 367 | ' | ' | ' | ' |
Manager incentive fee paid in stock (in shares) | ' | ' | 13,188 | ' | ' | ' | ' | ' |
Net income | 218,363 | 214,239 | ' | ' | ' | 214,239 | ' | 4,124 |
Dividends declared, $1.36 and $1.32 per share for period ended September 30, 2013 and 2012, respectively | -227,177 | -227,177 | ' | ' | ' | -227,177 | ' | ' |
Other comprehensive income (loss), net | -10,388 | -10,388 | ' | ' | ' | ' | -10,388 | ' |
VIE non-controlling interests | -1,067 | ' | ' | ' | ' | ' | ' | -1,067 |
Non-controlling interests assumed through LNR acquisition | 8,705 | ' | ' | ' | ' | ' | ' | 8,705 |
Contribution from non-controlling interests | 1,399 | ' | ' | ' | ' | ' | ' | 1,399 |
Distribution to non-controlling interests | -47,914 | ' | ' | ' | ' | ' | ' | -47,914 |
Balance at Sep. 30, 2013 | $4,313,429 | $4,270,323 | $1,959 | $4,295,058 | ($10,642) | ($85,339) | $69,287 | $43,106 |
Balance (in shares) at Sep. 30, 2013 | 195,887,275 | ' | 195,887,275 | ' | 625,850 | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Equity (Parenthetical) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Condensed Consolidated Statements of Equity | ' | ' |
Dividends declared per share (in dollars per share) | $1.36 | $1.32 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash Flows from Operating Activities: | ' | ' |
Net income | $218,363 | $145,249 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ' | ' |
Amortization of deferred financing costs | 7,044 | 3,896 |
Amortization of net convertible debt discount and deferred fees | 5,693 | ' |
Accretion of net discount on investment securities | -23,484 | -25,064 |
Accretion of net deferred loan fees and discounts | -26,917 | -35,026 |
Amortization of premium from loan transfer secured borrowings | -1,211 | -669 |
Stock-based compensation | 12,870 | 12,296 |
Stock-based component of incentive fees | 367 | 2,522 |
Change in fair value of fair value option investment securities | 3,265 | ' |
Change in fair value of consolidated VIEs | -22,428 | ' |
Change in fair value of servicing rights | -1,031 | ' |
Change in fair value of loans held-for-sale | -26,315 | 5,760 |
Change in fair value of derivatives | -2,196 | 3,328 |
Foreign currency gain, net | -3,481 | -11,516 |
Gain on sale of investments | -23,728 | -19,274 |
Impairment of real estate | 536 | ' |
Other-than-temporary impairment of investment securities | 453 | 2,728 |
Loan loss allowance | 1,915 | ' |
Depreciation and amortization | 8,022 | ' |
Earnings from unconsolidated entities | -7,427 | ' |
Distributions of earnings from unconsolidated entities | 2,315 | ' |
Capitalized costs written off | 1,517 | ' |
Changes in operating assets and liabilities: | ' | ' |
Related party payable, net | 25,475 | 4,197 |
Accrued interest receivable, less purchased interest | -8,603 | -5,280 |
Other assets | -6,874 | 5,819 |
Accounts payable, accrued expenses and other liabilities | 36,087 | 10,473 |
Originations of loans held-for-sale, net of principal collections | -847,844 | ' |
Net proceeds from sale of loans held-for-sale | 402,475 | 132,012 |
Net cash (used in) provided by operating activities | -275,142 | 231,451 |
Cash Flows from Investing Activities: | ' | ' |
Purchase of LNR, net of cash acquired | -586,383 | ' |
Purchase of investment securities | -82,754 | -575,690 |
Proceeds from sales of investment securities | 442,877 | 199,510 |
Proceeds from principal collections on investment securities | 56,793 | 67,452 |
Origination and purchase of loans held-for-investment | -1,658,240 | -943,330 |
Proceeds from principal collections on loans | 394,616 | 494,307 |
Proceeds from loans sold | 369,621 | 28,740 |
Acquisition and improvement of single family homes | -458,733 | ' |
Proceeds from sale of single family homes | 6,696 | ' |
Purchase of other assets | -1,631 | -30,496 |
Purchase of non-performing loans | -153,141 | ' |
Proceeds from sale of non-performing loans | 27,198 | ' |
Investment in unconsolidated entities | -8,558 | ' |
Proceeds from sale of interest in unconsolidated entities | ' | 874 |
Distribution of capital from unconsolidated entities | 3,210 | 892 |
Payments for purchase or termination of derivatives | -648 | ' |
Proceeds from termination of derivatives | 9,940 | ' |
Return of investment basis in purchased derivative asset | 1,533 | 2,780 |
Increase in restricted cash | -54,860 | ' |
Net cash used in investing activities | -1,692,464 | -754,961 |
Cash Flows from Financing Activities: | ' | ' |
Borrowings under financing agreements | 2,691,382 | 1,370,306 |
Proceeds from issuance of convertible senior notes | 1,037,926 | ' |
Principal repayments on borrowings | -2,674,437 | -1,164,373 |
Payment of deferred financing costs | -13,281 | -8,029 |
Proceeds from loan participation liability | 95,000 | 35,738 |
Proceeds from common stock offering | 1,513,519 | 457,321 |
Payment of equity offering costs | -955 | -2,250 |
Payment of dividends | -210,843 | -134,473 |
Contributions from non-controlling interests | 1,399 | ' |
Distributions to non-controlling interests | -47,914 | -558 |
Issuance of debt of consolidated VIEs | 8,760 | ' |
Repayment of debt of consolidated VIEs | -93,293 | ' |
Distributions of cash from consolidated VIEs | 18,598 | ' |
Net cash provided by financing activities | 2,325,861 | 553,682 |
Net increase in cash and cash equivalents | 358,255 | 30,172 |
Cash and cash equivalents, beginning of period | 177,671 | 114,027 |
Effect of exchange rate changes on cash | 908 | ' |
Cash and cash equivalents, end of period | 536,834 | 144,199 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest | 54,548 | 34,640 |
Income taxes paid | 24,794 | 990 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Fair value of assets acquired | 1,041,927 | ' |
Fair value of liabilities assumed | 562,279 | ' |
Dividends declared, but not yet paid | 90,130 | 51,629 |
Unsettled trade receivable | 14,338 | ' |
Consolidation of VIEs (VIE asset/liability additions) | 15,033,274 | ' |
Deconsolidation of VIEs (VIE asset/liability reductions) | 584,804 | ' |
Repurchase agreements settled net with proceeds from sale of loans held-for-sale | 449,134 | ' |
Interest only security received in connection with securitization | $1,889 | ' |
Business_and_Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2013 | |
Business and Organization | ' |
Business and Organization | ' |
1. Business and Organization | |
Starwood Property Trust, Inc. (“the Trust” together with its subsidiaries, “we” or the “Company”) is a Maryland corporation that commenced operations on August 17, 2009 upon the completion of its initial public offering (“IPO”). From our inception in 2009 through the end of the first quarter of 2013, we have been focused primarily on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments. We have traditionally referred to the following as our target assets: | |
· Commercial real estate mortgage loans; | |
· Commercial real estate mortgage-backed securities (“CMBS”); | |
· Other commercial real estate-related debt investments; | |
· Residential mortgage-backed securities (“RMBS”); and | |
· Residential real estate owned (“REO”) and residential non-performing mortgage loans. | |
On April 19, 2013, we acquired the equity of LNR Property LLC (“LNR”) and certain of its subsidiaries for an initial agreed upon purchase price of approximately $859 million, which was reduced for transaction expenses and distributions occurring after September 30, 2012, resulting in cash consideration of approximately $730 million. Immediately prior to the acquisition, an affiliate acquired the remaining equity comprising LNR’s commercial property division for a purchase price of $194 million. The portion of the LNR business acquired by us includes the following: (i) a servicing business that manages and works out problem assets, (ii) a finance business that is focused on selectively acquiring and managing real estate finance investments, including unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, and high yielding real estate loans; and (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions. Refer to Note 3 for further discussion. | |
We are organized and conduct our operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As such, we will generally not be subject to U.S. federal corporate income tax on that portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements. | |
In connection with the LNR acquisition, we established several taxable REIT subsidiaries (“TRSs”). TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain our qualification as a REIT. | |
The newly established TRSs engage in various real estate related operations, including special servicing of commercial real estate, originating and securitizing commercial mortgage loans, and investing in entities which engage in real estate related operations. As of September 30, 2013, $1.1 billion of the LNR assets were owned by TRS entities. Our TRSs are not consolidated for federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by us with respect to our interest in TRSs. | |
We are organized as a holding company and conduct our business primarily through our various wholly owned subsidiaries. We are externally managed and advised by SPT Management, LLC (our “Manager”) pursuant to the terms of a Management Agreement. Our Manager is controlled by Barry Sternlicht, our Chairman and Chief Executive Officer. Our Manager is an affiliate of Starwood Capital Group, a privately-held private equity firm founded and controlled by Mr. Sternlicht. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Summary of Significant Accounting Policies | ' | |||||||
2. Summary of Significant Accounting Policies | ||||||||
Balance Sheet Presentation of LNR Variable Interest Entities | ||||||||
The acquisition of LNR substantially changed the presentation of our financial statements in accordance with generally accepted accounting principles (“GAAP”). As noted above, LNR operates a finance business that acquires unrated, investment grade and non-investment grade rated CMBS. These securities represent interests in securitization structures (commonly referred to as special purpose entities, or “SPEs”). These SPEs are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. Under GAAP, SPEs typically qualify as variable interest entities (“VIEs”). These are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. | ||||||||
Because LNR often serves as the special servicer of the trusts in which they invest, consolidation of these structures is required pursuant to the accounting guidance outlined in detail below. This results in a consolidated balance sheet which presents the gross assets and liabilities of the SPEs. The assets and other instruments held by these SPEs are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the SPEs do not have any recourse to the general credit of any other consolidated entities, nor to us as the consolidator of these SPEs. | ||||||||
The SPE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities and any associated components of equity, such as unrealized holding gains or losses or OTTI are eliminated, as is the interest income and any impairment losses related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | ||||||||
Please refer to the segment presentation in Note 24 for a presentation of the LNR business without consolidation of these VIEs. | ||||||||
Basis of Accounting and Principles of Consolidation | ||||||||
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. Our results include those of LNR for the period from April 19, 2013 (LNR acquisition date) through September 30, 2013 (the “LNR Stub Period”). Intercompany amounts have been eliminated. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | ||||||||
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the operating results for the full year. | ||||||||
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that either (i) became significant as a result of our acquisition of LNR, or (ii) became significant due to an increase in the significance of the underlying business activity. | ||||||||
Entities not deemed to be variable interest entities (“VIEs”) are consolidated if we own a majority of the voting securities or interests or hold the general partnership interest, except in those instances in which the minority voting interest owner or limited partner effectively participates through substantive participative rights. Substantive participative rights include the ability to select, terminate and set compensation of the investee’s management, if applicable, and the ability to participate in capital and operating decisions of the investee, including budgets, in the ordinary course of business. | ||||||||
We invest in entities with varying structures, many of which do not have voting securities or interests, such as general partnerships, limited partnerships, and limited liability companies. In many of these structures, control of the entity rests with the general partners or managing members, while other members hold passive interests. The general partner or managing member may hold anywhere from a relatively small percentage of the total financial interests to a majority of the financial interests. For entities not deemed to be VIEs, where we serve as the sole general partner or managing member, we are considered to have the controlling financial interest and therefore the entity is consolidated, regardless of our financial interest percentage, unless there are other limited partners or investing members that effectively participate through substantive participative rights. In those circumstances where we, as majority controlling interest owner, cannot cause the entity to take actions that are significant in the ordinary course of business, because such actions could be vetoed by the minority controlling interest owner, we do not consolidate the entity. | ||||||||
As noted above, the most common type of VIE is an SPE. SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. SPEs are an important part of the financial markets, including the mortgage- and asset-backed securities and commercial paper markets, as they provide market liquidity by facilitating investors’ access to specific portfolios of assets and risks. SPEs may be organized as trusts, partnerships or corporations and are typically established for a single, discrete purpose. SPEs are not typically operating entities and usually have a limited life and no employees. The basic SPE structure involves a company selling assets to the SPE; the SPE funds the purchase of those assets by issuing securities to investors. The legal documents that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s assets by creditors of other entities, including the creditors of the seller of the assets. | ||||||||
When we consolidate entities other than SPEs, the ownership interests of any minority parties are reflected as non-controlling interests. A non-controlling interest in a consolidated subsidiary is defined as “the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent”. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheets. In addition, the presentation of net income attributes earnings to controlling and non-controlling interests. | ||||||||
When we consolidate SPEs, beneficial interests payable to third parties are reflected as liabilities when the interests are legally issued in the form of debt. Investments in entities which are not consolidated are accounted for by the equity method or by the cost method if either our investment is considered to be minor or we lack significant influence over the investee. | ||||||||
Variable Interest Entities | ||||||||
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | ||||||||
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our 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 we have 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, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply 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 us. | ||||||||
Our purchased investment securities include CMBS which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | ||||||||
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset are also eliminated in consolidation. | ||||||||
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | ||||||||
We have elected the fair value option in measuring the assets and liabilities of any VIEs we consolidate. Fluctuations in the fair values of the VIE assets and liabilities, along with trust interest income and trust interest and administrative expenses, are presented net in income of consolidated VIEs in our condensed consolidated statements of operations. | ||||||||
Segment Reporting | ||||||||
Prior to the acquisition of LNR, we focused primarily on originating and acquiring real estate-related debt investments and operated in one reportable segment. As a result of the acquisition of LNR, as well as the increased significance of our single family home business, we now have the following three reportable segments: real estate investment lending, single family residential, and LNR. Refer to Note 24 for further discussion of our reportable segments. | ||||||||
Business Combinations | ||||||||
Under FASB ASC Topic 805, Business Combinations, the acquirer in a business combination must recognize, with certain exceptions, the fair values of assets acquired, liabilities assumed, and non-controlling interests when the acquisition constitutes a change in control of the acquired entity. As goodwill is calculated as a residual, all goodwill of the acquired business, not just the acquirer’s share, is recognized under this “full goodwill” approach. | ||||||||
We applied the provisions of ASC 805 in accounting for our acquisition of LNR. In doing so, we recorded provisional amounts for certain items as of the date of the acquisition, including the fair value of certain assets and liabilities. During the measurement period, a period which shall not exceed one year, we retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of such date that, if known, would have affected the measurement of the amounts recognized. See further discussion in Note 3. | ||||||||
Goodwill and Intangible Assets | ||||||||
Goodwill is not amortized, but rather tested for impairment annually or more frequently if events or changes in circumstances indicate potential impairment. Goodwill at September 30, 2013 represents the excess of the consideration paid in connection with the acquisition of LNR over the fair value of net assets acquired. | ||||||||
In testing goodwill for impairment, we follow ASC Topic 350, Intangibles — Goodwill and Other, which permits a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill. If the qualitative assessment determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill, then no impairment is determined to exist for the reporting unit. However, if the qualitative assessment determines that it is more likely than not that the fair value of the reporting unit is less than its carrying value including goodwill, we compare the fair value of that reporting unit with its carrying value, including goodwill. If the carrying value of a reporting unit exceeds its fair value, goodwill is considered impaired with the impairment loss equal to the amount by which the carrying value of the goodwill exceeds the implied fair value of that goodwill. | ||||||||
Our identifiable intangible assets include special servicing rights for both our domestic and European servicing operations. The fair value measurement method has been elected for measurement of our domestic servicing asset. Election of this method is necessary to conform to our election of the fair value option for measuring the assets and liabilities of the VIEs consolidated pursuant to ASC 810. The amortization method has been elected for our European servicing asset. This asset is amortized in proportion to and over the period of estimated net servicing income, and is tested for potential impairment whenever events or changes in circumstances suggest that its carrying value may not be recoverable. | ||||||||
For purposes of testing our European servicing intangible for impairment, we first determine whether facts and circumstances exist that would suggest the carrying value of the intangible is not recoverable. If so, we then compare the fair value of the servicing intangible with its carrying value. The estimated fair value of the intangible is determined using discounted cash flow modeling techniques which require management to make estimates regarding future net servicing cash flows, taking into consideration historical and forecasted loan defeasance rates, delinquency rates and anticipated maturity defaults. If the carrying value of the intangible exceeds its fair value, the intangible is considered impaired and an impairment loss is recognized for the amount by which carrying value exceeds fair value. | ||||||||
Loans Held-For-Sale | ||||||||
Our loans that we intend to sell or liquidate in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value, unless we have elected to apply the fair value option at origination or purchase. Refer to Note 21 for further disclosure regarding loan transfer activity. The conduit business we acquired from LNR originates fixed rate commercial mortgage loans for future sale to multi-seller securitization trusts. We periodically enter into derivative financial instruments to hedge unpredictable changes in fair value of this loan portfolio, including changes resulting from both interest rates and credit quality. Because these derivatives are not designated, changes in their fair value are recorded in earnings. In order to best reflect the results of the hedged loan portfolio in earnings, we have elected the fair value option for these loans. As a result, changes in the fair value of the loans are also recorded in earnings. | ||||||||
Fair Value Option | ||||||||
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | ||||||||
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by LNR’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by LNR’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | ||||||||
Fair Value Measurements | ||||||||
We measure our mortgage-backed securities, derivative assets and liabilities, domestic servicing rights intangible asset and any assets or liabilities where we have elected the fair value option at fair value. When actively quoted observable prices are not available, we either use implied pricing from similar assets and liabilities or valuation models based on net present values of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | ||||||||
As discussed above, we measure the assets and liabilities of consolidated VIEs at fair value pursuant to our election of the fair value option. The VIEs in which we invest are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets and liabilities of the VIE, we maximize the use of observable inputs over unobservable inputs. We also acknowledge that our principal market for selling CMBS assets is the securitization market where the market participant is considered to be a CMBS trust or a collateralized debt obligation (“CDO”). This methodology results in the fair value of the assets of a static CMBS trust being equal to the fair value of its liabilities. | ||||||||
Residential Real Estate & Non-Performing Residential Loans | ||||||||
Residential Real Estate | ||||||||
Acquired residential real estate is evaluated to determine whether it meets the definition of a business or of an asset under GAAP. For asset acquisitions, we capitalize (1) pre-acquisition costs to the extent such costs would have been capitalized had we owned the asset when the cost was incurred, and (2) closing and other direct acquisition costs. We then allocate the total asset acquisitions cost among land, building and furniture and fixtures, based on their relative fair values, generally utilizing the relative allocation that was contained in the property tax assessment of the same or a similar property, adjusted as deemed necessary. | ||||||||
If, at acquisition, a property needs to be renovated before it is ready for its intended use, we commence the necessary development activities. During this development period, we capitalize all direct and indirect costs incurred in renovating the property. Once a property is ready for its intended use, expenditures for ordinary maintenance and repairs thereafter are expensed as incurred, and we capitalize expenditures that improve or extend the life of a home and for furniture, fixtures and equipment. | ||||||||
We begin depreciating properties to be held and used when they are ready for their intended use. We compute depreciation using the straight-line method over the estimated useful lives of the respective assets. We depreciate buildings over 30 years, and we depreciate furniture and fixtures over five years. Land is not depreciated. | ||||||||
Properties are classified as held for sale when they meet the applicable GAAP criteria, including that the property is being listed for sale and that it is ready to be sold in its current condition. Held for sale properties are reported at the lower of their carrying amount or estimated fair value less costs to sell. | ||||||||
We evaluate our properties to be held and used for indications of impairment at least quarterly, typically in connection with preparing the quarter-end financial statements. We assess impairment at the lowest level for which cash flows are available, which is on a per-property basis. If an impairment indicator exists, we compare the property’s expected future undiscounted cash flows to the carrying amount of the property. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the property, we record an impairment charge equal to the excess of the property’s carrying amount over the estimated fair value. In estimating fair value, we primarily consider the local broker price opinion, but also consider any other comparable home sales or other market data, as necessary. | ||||||||
Non-Performing Residential Loans | ||||||||
We have purchased pools of distressed and non-performing residential mortgage loans, which we generally seek to (1) convert into homes through the foreclosure or other resolution process that can then either be contributed to our rental portfolio or sold or, to a lesser extent, (2) modify and hold or resell at higher prices if circumstances warrant. In situations where property foreclosure is subject to an auction process and a third party submits the winning bid, we recognize the resulting gain as a gain on the sale of loans held for investment. | ||||||||
Our distressed and non-performing residential mortgage loans are on nonaccrual status at the time of purchase as it is probable that principal or interest is not fully collectible. Any payments received thereafter are applied as a reduction to the remaining principal balance as long as concern exists as to the ultimate collection of amounts contractually due. | ||||||||
We evaluate our non-performing residential mortgage loans for impairment at least quarterly, typically in connection with preparing the quarter-end financial statements. As our loans held for investment were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. As described in our real estate accounting policy above, we primarily utilize the local broker price opinion, but also consider any other comparable home sales or other market data as considered necessary, in estimating a property’s fair value. If the carrying amount of a loan exceeds the estimated fair value of the underlying collateral, we will record an impairment loss for the difference between the estimated fair value of the property collateral and the carrying amount of the loan. Through September 30, 2013, no impairments have been recorded on any of our loans. | ||||||||
Revenue Recognition | ||||||||
Interest Income | ||||||||
Interest income on performing loans and financial instruments is accrued based on the outstanding principal amount and contractual terms of the instrument. Discounts or premiums associated with the purchase of non-performing loans and investment securities are amortized or accreted into interest income as a yield adjustment on the effective interest method, based on expected cash flows through the expected maturity date of the investment. On at least a quarterly basis, we review and, if appropriate, make adjustments to our cash flow projections. For loans and CMBS in which we expect to collect all contractual amounts due, we do not adjust the projected cash flows to reflect anticipated credit losses. | ||||||||
Conversely, for the majority of our RMBS, which have been purchased at a discount to par value, we do not expect to collect all amounts contractually due at the time we acquired the securities. Accordingly, we expect that a portion of the purchase discount will not be recognized as interest income, and is instead viewed as a non-accretable yield. The amount considered as non-accretable yield may change over time based on the actual performance of these securities, their underlying collateral, actual and projected cash flow from such collateral, economic conditions and other factors. If the performance of a credit deteriorated security is more favorable than forecasted, we will generally accrete more credit discount into interest income than initially or previously expected. These adjustments are made prospectively beginning in the period subsequent to the determination that a favorable change in performance is projected. Conversely, if the performance of a credit deteriorated security is less favorable than forecasted, an other-than-temporary impairment may be taken, and the amount of discount accreted into income will generally be less than previously expected. | ||||||||
For loans where we have not elected the fair value option, origination fees and direct loan origination costs are also recognized in interest income over the loan term as a yield adjustment using the effective interest method. When we elected the fair value option, origination fees and direct loan costs are recorded directly in income and are not deferred. | ||||||||
Upon the sale of loans or securities which are not accounted for pursuant to the fair value option, the excess (or deficiency) of net proceeds over the net carrying value of such loans or securities is recognized as a realized gain (or loss). | ||||||||
Servicing Fees | ||||||||
We typically seek to be the special servicer on CMBS transactions in which we invest. When we are appointed to serve in this capacity, we earn special servicing fees from the related activities performed, which consist primarily of overseeing the workout of under-performing and non-performing loans underlying the CMBS transactions. These fees are recognized in income in the period in which the services are performed and the revenue recognition criteria have been met. | ||||||||
Transfers | ||||||||
Transfers of investment securities, mortgage loans, and investments in unconsolidated entities are accounted for as sales pursuant to the accounting guidance governing transfers and servicing of financial assets, providing that we have surrendered control over the assets and to the extent that we received consideration other than beneficial interests in the assets. The cost of assets sold is based on the specific identification method. | ||||||||
We recognize sales of residential real estate when the sale has closed, title has passed, adequate initial and continuing investment by the buyer is received, possession and other attributes of ownership have been transferred to the buyer, and we are not obligated to perform significant additional activities after closing. All these conditions are typically met at or shortly after closing. | ||||||||
Rental Income | ||||||||
Rental income attributable to residential leases is recorded when due from tenants, which approximates the amount that would result from straight-lining rents over the lease term. The initial term of our residential leases is generally one year, with renewals upon consent of both parties on an annual or monthly basis. | ||||||||
Investment in Unconsolidated Entities | ||||||||
We own non-controlling equity interests in various privately-held partnerships and limited liability companies. Unless we elect the fair value option under ASC 825, we use the cost method to account for investments in which we own less than 20% and do not have significant influence over the underlying investees. We use the equity method to account for all other non-controlling interests in partnerships and limited liability companies. Cost method investments are initially recorded at cost and income is generally recorded when distributions are received. Equity method investments are initially recorded at cost and subsequently adjusted for our share of income or loss, as well as contributions made or distributions received. | ||||||||
Investments in unconsolidated entities are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. Impairment analyses are based on current plans, intended holding periods and available information at the time the analyses are prepared. | ||||||||
For investments in publicly traded companies where we have virtually no influence over the activities of these companies and minimal ownership percentages, such investments are classified as available-for-sale and reported at fair value in the balance sheet, with unrealized gains and losses reported as a component of other comprehensive income (loss). For investments in publicly traded securities where we have the ability to exercise significant influence, but not control, over underlying investees, we have elected the fair value option and report the assets at fair value on the balance sheet with unrealized gains and losses reported in earnings. Dividends on our available-for-sale equity securities are recorded in the statement of operations on the record date. | ||||||||
Securitization/Sale and Financing Arrangements | ||||||||
We periodically sell our financial assets, such as commercial mortgage loans, CMBS and other assets. In connection with these transactions, we may retain or acquire senior or subordinated interests in the related assets. Gains and losses on such transactions are recognized using the guidance in ASC Topic 860, Transfers and Servicing, which is based on a financial components approach that focuses on control. Under this approach, after a transfer of financial assets that meets the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transferred control—an entity recognizes the financial assets it retains and any liabilities it has incurred, derecognizes the financial assets it has sold, and derecognizes liabilities when extinguished. We determine the gain or loss on sale of the assets by allocating the carrying value of the sold asset between the sold asset and the interests retained based on their relative fair values, as applicable. The gain or loss on sale is the difference between the cash proceeds from the sale and the amount allocated to the sold asset. If the sold asset is being accounted for pursuant to the fair value option, there is no gain or loss. | ||||||||
Income Taxes | ||||||||
The Company has elected to be qualified and taxed as a REIT under the Code. The Company is subject to federal income taxation at corporate rates on its REIT taxable income, however, the Company is allowed a deduction for the amount of dividends paid to its shareholders, thereby subjecting the distributed net income of the Company to taxation at the shareholder level only. In addition, the Company is allowed several other deductions in computing its REIT taxable income, including non-cash items such as depreciation expense and certain specific reserve amounts that the Company deems to be uncollectable. The Company intends to operate in a manner consistent with and to elect to be treated as a REIT for tax purposes. | ||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. | ||||||||
We recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained upon examination of the relevant taxing authority, based on the technical merits of the tax position. A tax position is measured at the largest amount of benefit that will more likely than not be realized upon settlement. A liability is established for the differences between positions taken in a tax return and amounts recognized in the financial statements and no portion of the benefit is recognized in our condensed consolidated statements of operations. We report interest and penalties related to income tax matters as a component of income tax expense. | ||||||||
Foreign Currency Transactions | ||||||||
Our assets and liabilities denominated in foreign currencies are translated into U.S. dollars using foreign currency exchange rates at the end of the reporting period. Income and expenses are translated at the average exchange rates for each reporting period. The effects of translating the assets, liabilities and income of our foreign investments held by entities with a U.S. dollar functional currency are included in foreign currency gain (loss) in the condensed consolidated statements of operations or other comprehensive income for securities available for sale for which the fair value option has not been elected. The effects of translating the assets, liabilities and income of our foreign investments held by entities with functional currencies other than the U.S. dollar are included in other comprehensive income. Realized foreign currency gains and losses and changes in the value of foreign currency denominated monetary assets and liabilities are included in the determination of net income and are reported as foreign currency gain (loss) in our condensed consolidated statements of operations. | ||||||||
Earnings Per Share | ||||||||
We calculate basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average of shares of common stock outstanding for that period after consideration of the earnings allocated to our restricted stock units, which are participating securities as defined in GAAP. Diluted earnings per share reflects the potential dilution that that could occur from shares issuable in connection with the incentive fee paid to our Manager under the management agreement and conversion of the convertible senior notes into shares of common stock, except when doing so would be anti-dilutive. | ||||||||
Underwriting Commissions and Offering Costs | ||||||||
Underwriting and offering costs related to our equity offering activities, which consist primarily of our equity offerings in September 2013, April 2013 and October 2012 as well as our at-the-market offering program, were $0.3 million and $1.0 million for the three and nine months ended September 30, 2013, respectively, and are reflected as a reduction of additional paid-in capital in the condensed consolidated statements of equity. Underwriting and offering costs were $2.3 million and $2.3 million for the three and nine months ended September 30, 2012, respectively. | ||||||||
Use of Estimates | ||||||||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our investments, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial instruments that are estimated using a discounted cash flows method are significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | ||||||||
Reclassification | ||||||||
As a result of the LNR acquisition as well as the increased significance of our single family home segment as discussed above (also refer to Note 24), certain items in our December 31, 2012 consolidated balance sheet and condensed consolidated statements of operations for the three and nine months ended September 30, 2012 as well as in our condensed consolidated statements of cash flows for the nine months ended September 30, 2012, have been reclassified to conform to the current presentation. The tables below describe the reclassifications to these respective financial statements: | ||||||||
December 31, 2012 Consolidated Balance Sheet (amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Mortgage-backed securities, available-for-sale, at fair value | 862,587 | (862,587 | )(a) | — | ||||
Investment securities | — | 862,587 | (a) | |||||
21,667 | (b) | 884,254 | ||||||
Other investments | 221,983 | (21,667 | )(b) | |||||
(167,998 | )(c) | |||||||
(32,318 | )(d) | — | ||||||
Residential real estate, net | — | 99,115 | (c) | 99,115 | ||||
Non-performing residential loans | — | 68,883 | (c) | 68,883 | ||||
Investment in unconsolidated entities | — | 32,318 | (d) | 32,318 | ||||
Accounts payable, accrued expenses and other liabilities | — | 21,204 | (e) | |||||
8,890 | (e) | 30,094 | ||||||
Accounts payable and accrued expenses | 8,890 | (8,890 | )(e) | — | ||||
Other liabilities | 21,204 | (21,204 | )(e) | — | ||||
(a) Mortgage-backed securities, available-for-sale, at fair value are now included in “Investment securities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(b) There were $21.7 million of marketable equity securities reported within “Other investments” as of December 31, 2012, which are now classified as “Investment securities,” a new caption in the September 30, 2013 balance sheet. | ||||||||
(c) Our investments in residential real estate and non-performing residential loans have increased significantly during 2013, and are now separately reported in the September 30, 2013 balance sheet. Such amounts were classified within “Other investments” as of December 31, 2012. | ||||||||
(d) Represents investments in unconsolidated entities that were classified within “Other investments” as of December 31, 2012. Such investments are now reported within “Investment in unconsolidated entities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(e) We have combined accounts payable, accrued expenses and other liabilities into one caption in the September 30, 2013 balance sheet. Other liabilities were presented separately in the December 31, 2012 balance sheet. | ||||||||
Given the nature and significance of LNR’s operations, we removed the “Net interest margin,” subtotal from our condensed consolidated statement of operations, with interest income now included in a new “total revenues” subtotal, and interest expense now included within the new “Total costs and expenses” subtotal. The tables below describe the reclassification adjustments made to specific financial statement captions. | ||||||||
Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 180 | (a) | 180 | ||||
Interest income from cash balances | 180 | (180 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 2,739 | (b) | 2,739 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 2,923 | (2,393 | )(b) | 530 | ||||
Net gains (losses) on currency hedges | (10,392 | ) | 10,392 | (c) | — | |||
Net gains (losses) on interest rate hedges | 608 | (608 | )(c) | — | ||||
Loss on derivative financial instruments | — | (9,784 | )(c) | (9,784 | ) | |||
Net realized foreign currency gains (losses) | 8,515 | (8,515 | )(d) | — | ||||
Unrealized foreign currency remeasurement gains | 2,707 | (2,707 | )(d) | — | ||||
Foreign currency gain, net | — | 11,222 | (d) | 11,222 | ||||
Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 66 | (a) | 66 | ||||
Interest income from cash balances | 66 | (66 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 787 | (b) | 787 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 621 | (441 | )(b) | 180 | ||||
Net gains (losses) on currency hedges | (7,510 | ) | 7,510 | (c) | — | |||
Net gains (losses) on interest rate hedges | (51 | ) | 51 | (c) | — | |||
Loss on derivative financial instruments | — | (7,561 | )(c) | (7,561 | ) | |||
Net realized foreign currency gains (losses) | (337 | ) | 337 | (d) | — | |||
Unrealized foreign currency remeasurement gains (losses) | 7,062 | (7,062 | )(d) | — | ||||
Foreign currency gain, net | — | 6,725 | (d) | 6,725 | ||||
(a) Interest income from cash balances has been reclassified into “Other revenues,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(b) Earnings from unconsolidated entities and various other items are now separate captions in the income statement for the three and nine months ended September 30, 2013. We previously classified such items for the three and nine months ended September 30, 2012, within “Other income.” | ||||||||
(c) The amounts in “Net gains (losses) on currency hedges” and “Net gains (losses) on interest rate hedges” have been reclassified into “Loss on derivative financial instruments,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(d) The amounts in “Net realized foreign currency gains (losses) and “Unrealized foreign currency remeasurement gains (losses)” have been reclassified into “Foreign currency gain, net,” which is a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Gain on sale of available-for-sale securities | (12,097 | ) | 12,097 | (a) | — | |||
Gain on sale of loans | (7,177 | ) | 7,177 | (a) | — | |||
Gain on sale of investments | — | (19,274 | )(a) | (19,274 | ) | |||
Unrealized gains (losses) on interest rate hedges | (9,991 | ) | 9,991 | (b) | — | |||
Unrealized losses on currency hedges | 13,319 | (13,319 | )(b) | — | ||||
Change in fair value of derivatives | — | 3,328 | (b) | 3,328 | ||||
Gain on foreign currency remeasurement | (8,809 | ) | 8,809 | (c) | — | |||
Unrealized foreign currency remeasurement losses (gains) | (2,707 | ) | 2,707 | (c) | — | |||
Foreign currency gain, net | — | (11,516 | )(c) | (11,516 | ) | |||
Purchased interest on investments | (638 | ) | 638 | (d) | — | |||
Origination and purchase of loans held-for-investment | (942,692 | ) | (638 | )(d) | (943,330 | ) | ||
Loan maturities | 460,789 | (460,789 | )(e) | — | ||||
Loan investment principal repayments | 33,518 | (33,518 | )(e) | — | ||||
Proceeds from principal collections on loans | — | 494,307 | (e) | 494,307 | ||||
(a) We have combined “Gain on sale of available-for-sale securities” and “Gain on sale of loans” into “Gain on sale of investments,” a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(b) We have combined “Unrealized gains (losses) on interest rate hedges” and “Unrealized (gains) losses on currency hedges” into “Change in fair value of derivatives,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(c) We have combined “Gain on foreign currency remeasurement” and “Unrealized foreign currency remeasurement losses (gains)” into “Foreign currency gain, net,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(d) We have combined “Purchased interest on investments” into “Origination and purchase of loans held-for-investment.” | ||||||||
(e) We have combined “Loan maturities” and “Loan investment principal repayments” into “Proceeds from principal collections on loans,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
Recent Accounting Developments | ||||||||
As noted above, the consolidation of securitization VIEs has a significant impact on our balance sheet and statement of operations presentation on a GAAP basis. Also as noted above, we measure the assets and liabilities of consolidated VIEs at fair value pursuant to our election of the fair value option. In doing so, we maximize the use of observable inputs over unobservable inputs, which results in the fair value of the assets of a static CMBS trust, or collateralized financing entity (“CFE”), being equal to the fair value of its liabilities. | ||||||||
On July 19, 2013, the Financial Accounting Standards Board (“FASB”) issued an exposure draft (“ED”) related to Emerging Issues Task Force (“EITF”) Issue No. 12-G, Accounting for the Difference Between the Fair Value of Assets and Liabilities of a Consolidated Collateralized Financing Entity. The ED attempts to address diversity in practice related to the measurement of a CFE’s assets and liabilities at fair value. In doing so, the ED indicates that the fair value measurement of a CFE’s financial liabilities should be consistent with the fair value measurement of its financial assets. This is consistent with our current treatment, as described above and in the “Fair Value” section herein. | ||||||||
However, the ED also concludes that reporting entities must use the fair value of the financial assets (and carrying value of any non-financial assets temporarily held by the CFE) to measure the financial liabilities. This is inconsistent with the methodology we apply, which uses the fair value of the financial liabilities to measure the financial assets. | ||||||||
Comment letters on the ED were due by October 17, 2013. We have submitted a comment letter to the FASB expressing our concerns with respect to this issue. We have also engaged in discussions with the FASB regarding our comment letter and the significant limitations that the ED would impose on our ability to prepare GAAP financial statements. | ||||||||
Acquisition_of_LNR_Property_LL
Acquisition of LNR Property LLC | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Acquisition of LNR Property LLC | ' | |||||||||||||
Acquisition of LNR Property LLC | ' | |||||||||||||
3. Acquisition of LNR Property LLC | ||||||||||||||
As described in Note 1, on April 19, 2013, we acquired certain net assets of LNR for an initial agreed upon purchase price of $859 million, which was reduced for transaction expenses and distributions occurring after September 30, 2012, resulting in cash consideration of approximately $730 million. The transaction was accounted for as a business combination under the acquisition method of accounting as discussed in Note 2. | ||||||||||||||
The following table summarizes the initial and adjusted provisional estimates of identified assets acquired and liabilities assumed at the acquisition date, before consolidation of securitization VIEs, which had no impact on the purchase price (in thousands): | ||||||||||||||
Initial | Measurement | Adjusted | ||||||||||||
Provisional | Period | Provisional | ||||||||||||
Amounts | Adjustments | Amounts | ||||||||||||
Assets acquired: | ||||||||||||||
Cash and cash equivalents | $ | 143,771 | $ | — | $ | 143,771 | ||||||||
Restricted cash | 24,413 | — | 24,413 | |||||||||||
Loans held-for-investment | 8,015 | — | 8,015 | |||||||||||
Loans held-for-sale | 256,502 | — | 256,502 | |||||||||||
Investment securities | 314,471 | — | 314,471 | |||||||||||
Intangible assets — servicing rights | 276,989 | — | 276,989 | |||||||||||
Investment in unconsolidated entities | 97,588 | (1,170 | ) | 96,418 | ||||||||||
Derivative assets | 3,103 | — | 3,103 | |||||||||||
Interest receivable | 1,315 | — | 1,315 | |||||||||||
Other assets | 60,853 | (152 | ) | 60,701 | ||||||||||
Total assets acquired | 1,187,020 | (1,322 | ) | 1,185,698 | ||||||||||
Liabilities assumed: | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | 118,621 | 4,927 | 123,548 | |||||||||||
Secured financing agreements | 438,377 | — | 438,377 | |||||||||||
Derivative liabilities | 354 | — | 354 | |||||||||||
Total liabilities assumed | 557,352 | 4,927 | 562,279 | |||||||||||
Net assets acquired | $ | 629,668 | $ | (6,249 | ) | $ | 623,419 | |||||||
Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed. This determination of goodwill is as follows (amounts in thousands): | ||||||||||||||
Initial | Measurement | Adjusted | ||||||||||||
Provisional | Period | Provisional | ||||||||||||
Amounts | Adjustments | Amounts | ||||||||||||
Purchase price | $ | 730,518 | — | $ | 730,518 | |||||||||
Provisional estimates of the fair value of net assets acquired | 629,668 | (6,249 | ) | 623,419 | ||||||||||
Goodwill | $ | 100,850 | 6,249 | $ | 107,099 | |||||||||
On the acquisition date, we repaid LNR’s senior credit facility for its outstanding balance and accrued interest of $268.9 million. | ||||||||||||||
During the three months ended September 30, 2013, we retrospectively adjusted our initial provisional estimates of the identified assets acquired and liabilities assumed for new information obtained regarding facts and circumstances that existed as of the acquisition date. Such balance sheet adjustments had no retrospective effect on previously reported results of operations. | ||||||||||||||
Since the acquisition date and before consolidation of securitization VIEs, LNR has recognized revenues of $152.6 million and net earnings of $79.8 million which are reflected in our condensed consolidated statements of operations. We incurred acquisition-related costs such as advisory, legal, and due diligence services of approximately $0.3 million and $18.0 million during the three and nine months ended September 30, 2013, respectively, which are included in business combination costs within our condensed consolidated statements of operations. | ||||||||||||||
The pro forma revenue and net income of the combined entity for the three and nine months ended September 30, 2013 and 2012, assuming the business combination was consummated on January 1, 2012, are as follows (amounts in thousands): | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | $ | 155,536 | $ | 150,058 | $ | 459,856 | $ | 416,109 | ||||||
Net income | 97,288 | 112,757 | 299,338 | 263,908 | ||||||||||
Pro forma revenues and expenses were adjusted to exclude interest expense on LNR’s senior credit facility, which was repaid at the acquisition date, and certain other non-recurring acquisition related costs. We included an estimated income tax provision and management fee expense for periods prior to the acquisition date and estimated interest expense for the term loan facility discussed in Note 10. The amounts of these adjustments are as follows (in thousands): | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net interest expense addition (deduction) | $ | — | $ | (1,416 | ) | $ | 752 | $ | (4,385 | ) | ||||
Non-recurring acquisition costs addition (deduction) | (7,291 | ) | 7,699 | (125,936 | ) | 23,097 | ||||||||
Income tax provision addition | 1,604 | 15,722 | 15,577 | 28,647 | ||||||||||
Management fee expense addition | — | 23,164 | 18,657 | 32,907 | ||||||||||
Restricted_Cash
Restricted Cash | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Restricted Cash | ' | |||||||
Restricted Cash | ' | |||||||
4. Restricted Cash | ||||||||
In connection with the LNR acquisition, we assumed a $23.1 million escrow account funded by the sellers of LNR on behalf of certain employees. The cash from this account is payable to the employees upon the occurrence of certain events, including involuntary termination without cause or the employees rendering of service through the nine month anniversary of the acquisition date. Also in connection with the LNR acquisition, we were required to cash collateralize certain obligations of LNR, including letters of credit and performance obligations. The Company funded $3.3 million for these obligations and our affiliate funded the remaining $6.2 million. The full amount is in the name of a subsidiary of the Company and is therefore reflected as the Company’s restricted cash. An offsetting payable to our affiliate of $6.2 million is recorded in related party payable in our condensed consolidated balance sheets. A summary of our restricted cash as of September 30, 2013 and December 31, 2012, is as follows (amounts in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Funds held in escrow for employees | $ | 19,587 | $ | — | ||||
Cash collateral for derivative financial instruments | 14,608 | — | ||||||
Cash collateral for performance obligations | 9,482 | — | ||||||
Funds held in escrow on behalf of borrowers and other | 39,029 | 3,429 | ||||||
$ | 82,706 | $ | 3,429 | |||||
Loans
Loans | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Loans | ' | |||||||||||||||||||
Loans | ' | |||||||||||||||||||
5. Loans | ||||||||||||||||||||
Our investments in loans held-for-investment are accounted for at amortized cost and the loans held-for-sale are accounted for at the lower of cost or fair value, unless we have elected the fair value option. The following table summarizes our investments in mortgages and loans by subordination class as of September 30, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||
September 30, 2013 | Carrying | Face | Weighted | WAL | ||||||||||||||||
Value | Amount | Average | (years)(2) | |||||||||||||||||
Coupon | ||||||||||||||||||||
First mortgages | $ | 1,928,052 | $ | 1,975,959 | 6.1 | % | 4.3 | |||||||||||||
Subordinated mortgages(1) | 523,393 | 560,147 | 7.9 | % | 3.5 | |||||||||||||||
Mezzanine loans | 1,342,793 | 1,354,863 | 10.8 | % | 3.5 | |||||||||||||||
Total loans held-for-investment | 3,794,238 | 3,890,969 | ||||||||||||||||||
First mortgages held-for-sale, lower of cost or fair value | 66,018 | 67,000 | 3.5 | % | 4.9 | |||||||||||||||
First mortgages held-for-sale, fair value option elected | 279,121 | 273,110 | 5.3 | % | 9.3 | |||||||||||||||
Loans transferred as secured borrowings | 85,590 | 85,740 | 4.7 | % | 2.4 | |||||||||||||||
Total gross loans | 4,224,967 | 4,316,819 | ||||||||||||||||||
Loan loss allowance | (3,976 | ) | — | |||||||||||||||||
Total net loans | $ | 4,220,991 | $ | 4,316,819 | ||||||||||||||||
December 31, 2012 | Carrying | Face | Weighted | WAL | ||||||||||||||||
Value | Amount | Average | (years)(2) | |||||||||||||||||
Coupon | ||||||||||||||||||||
First mortgages | $ | 1,461,666 | $ | 1,502,382 | 6.2 | % | 3.8 | |||||||||||||
Subordinated mortgages(1) | 397,159 | 430,444 | 9.8 | % | 4 | |||||||||||||||
Mezzanine loans | 1,057,670 | 1,079,897 | 10.3 | % | 3.6 | |||||||||||||||
Total loans held-for-investment | 2,916,495 | 3,012,723 | ||||||||||||||||||
Loans transferred as secured borrowings | 85,901 | 86,337 | 4.7 | % | 3.2 | |||||||||||||||
Total gross loans | 3,002,396 | 3,099,060 | ||||||||||||||||||
Loan loss allowance | (2,061 | ) | — | |||||||||||||||||
Total net loans | $ | 3,000,335 | $ | 3,099,060 | ||||||||||||||||
(1) Subordinated mortgages include (i) subordinated mortgages that we retain after having sold first mortgage positions related to the same collateral, (ii) B-Notes, and (iii) subordinated loan participations. | ||||||||||||||||||||
(2) Represents the WAL of each respective group of loans. The WAL of each individual loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of September 30, 2013 and December 31, 2012. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the loan. | ||||||||||||||||||||
As of September 30, 2013, approximately $2.7 billion, or 64.1%, of the loans are variable rate and pay interest at LIBOR or EURIBOR plus a weighted-average spread of 6.17%. The following table summarizes our investments in floating rate loans (amounts in thousands): | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Index | Rate | Carrying Value | Rate | Carrying Value | ||||||||||||||||
1 Month LIBOR | 0.18% | $ | 453,690 | 0.21% | $ | 674,327 | ||||||||||||||
1 Month Citibank LIBOR(1) | N/A | — | 0.19% | 93,195 | ||||||||||||||||
3 Month Citibank LIBOR(1) | N/A | — | 0.30% | 7,217 | ||||||||||||||||
3 Month EURIBOR | 0.22% | 54,091 | N/A | — | ||||||||||||||||
LIBOR Floor | 0.19% - 3.0%(2) | 2,201,216 | 0.5% - 2.0% | 1,143,443 | ||||||||||||||||
Total | $ | 2,708,997 | $ | 1,918,182 | ||||||||||||||||
(1) The Citibank LIBOR rate is equal to the rate per annum at which deposits in United States dollars are offered by the principal office of Citibank, N.A. in London, England to prime banks in the London interbank market. | ||||||||||||||||||||
(2) The weighted-average LIBOR Floor is 0.52% as of September 30, 2013. | ||||||||||||||||||||
As of September 30, 2013, the risk ratings for loans subject to our rating system, which is described in our Form 10-K, and excludes loans on cost recovery method and loans for which the fair value option has been elected, by class of loan were as follows (amounts in thousands): | ||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||
Risk | Loans Held-For-Investment | Loans | ||||||||||||||||||
Transferred | ||||||||||||||||||||
Rating | First | Subordinated | Mezzanine | Loans Held- | As Secured | Total | ||||||||||||||
Category | Mortgages | Mortgages | Loans | For-Sale | Borrowings | |||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
2 | 25,473 | 2,422 | 343,818 | — | 13,046 | 384,759 | ||||||||||||||
3 | 1,740,951 | 489,430 | 919,293 | 66,018 | 72,544 | 3,288,236 | ||||||||||||||
4 | 153,845 | 31,541 | 79,682 | — | — | 265,068 | ||||||||||||||
5 | — | — | — | — | — | — | ||||||||||||||
Not Rated | 7,783 | — | — | 279,121 | — | 286,904 | ||||||||||||||
$ | 1,928,052 | $ | 523,393 | $ | 1,342,793 | $ | 345,139 | $ | 85,590 | $ | 4,224,967 | |||||||||
As of December 31, 2012, the risk ratings by class of loan, excluding loans where we have elected the fair value option, were as follows (amounts in thousands): | ||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||
Risk | Loans Held-For-Investment | Loans | ||||||||||||||||||
Transferred | ||||||||||||||||||||
Rating | First | Subordinated | Mezzanine | Loans Held- | As Secured | Total | ||||||||||||||
Category | Mortgages | Mortgages | Loans | For-Sale | Borrowings | |||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
2 | 39,734 | 2,434 | 370,671 | — | 13,113 | 425,952 | ||||||||||||||
3 | 1,350,455 | 363,275 | 679,371 | — | 72,788 | 2,465,889 | ||||||||||||||
4 | 59,970 | 31,450 | 7,628 | — | — | 99,048 | ||||||||||||||
5 | 11,507 | — | — | — | — | 11,507 | ||||||||||||||
$ | 1,461,666 | $ | 397,159 | $ | 1,057,670 | $ | — | $ | 85,901 | $ | 3,002,396 | |||||||||
After completing the impairment evaluation process described in our Form 10-K, we concluded that no impairment charges were required on any individual loans held for investment as of September 30, 2013 or December 31, 2012. As of September 30, 2013, none of our loans held for investment were in default. Additionally, none of our held-for-sale loans where we have elected the fair value option were 90 days or more past due or on nonaccrual status. | ||||||||||||||||||||
We recorded an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4,” plus (ii) 5% of the aggregate carrying amount of loans rated as a “5.” These groups accounted for 6.3% and 3.7% of our loan portfolio as of September 30, 2013 and December 31, 2012, respectively (amounts in thousands): | ||||||||||||||||||||
For the Nine | For the Nine | |||||||||||||||||||
Months Ended | Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Reserve for loan losses at beginning of year | $ | 2,061 | $ | — | ||||||||||||||||
Provision for loan losses | 1,915 | — | ||||||||||||||||||
Charge-offs | — | — | ||||||||||||||||||
Recoveries | — | — | ||||||||||||||||||
Reserve for loan losses at end of period | $ | 3,976 | $ | — | ||||||||||||||||
Recorded investment in loans related to the allowance for loan loss | $ | 265,068 | $ | — | ||||||||||||||||
For the nine months ended September 30, 2013, the activity in our loan portfolio was as follows (amounts in thousands): | ||||||||||||||||||||
Balance December 31, 2012 | $ | 3,000,335 | ||||||||||||||||||
Acquisition of LNR loans | 264,517 | |||||||||||||||||||
Acquisitions/originations | 2,506,378 | |||||||||||||||||||
Capitalized interest (1) | 12,481 | |||||||||||||||||||
Basis of loans sold (2) | (1,221,396 | ) | ||||||||||||||||||
Loan maturities | (329,636 | ) | ||||||||||||||||||
Principal repayments | (65,272 | ) | ||||||||||||||||||
Discount accretion/premium amortization | 26,917 | |||||||||||||||||||
Changes in fair value | 26,315 | |||||||||||||||||||
Unrealized foreign currency remeasurement gain | 3,784 | |||||||||||||||||||
Capitalized cost written off | (1,517 | ) | ||||||||||||||||||
Loan loss allowance | (1,915 | ) | ||||||||||||||||||
Balance September 30, 2013 | $ | 4,220,991 | ||||||||||||||||||
(1) Represents accrued interest income on loans whose terms do not require current payment of interest. | ||||||||||||||||||||
(2) See Note 12 of the condensed consolidated financial statements for additional disclosure on these transactions. | ||||||||||||||||||||
We acquired or originated $2.5 billion (face value) in loans during the nine months ended September 30, 2013, which included: (1) 74 first mortgage loans originated for future securitization by LNR’s conduit platform (2) an $86.0 million first mortgage construction financing for the development of 30 luxury condominium residences and a ground floor retail space in Manhattan, New York. Of this total loan amount, $50.6 million was funded at closing; (3) an origination of a $350.0 million first mortgage and mezzanine loan for the construction of the Hudson Yards South Tower located on Manhattan’s West side with $98.9 million funded at close; (4) an origination of a $158.5 million first mortgage and mezzanine loan, with $122.9 million funded at closing, secured by the fee interest in an 11 story office building in New York; (5) an origination of a $275.0 million first mortgage loan of which $225.0 million was funded at close; (6) recapitalization of an existing loan with a $140.0 million first mortgage of which $115.0 million was funded at close. The A-Note was subsequently sold to another lender for proceeds that approximated our carrying amount; (7) refinancing of an existing loan collateralized by a portfolio of hotel properties located throughout the United States. We co-originated a $142.5 million first mortgage loan with a strategic partner. The $100.0 million A-note was sold in securitization shortly after, resulting in gross proceeds of approximately $99.4 million; (8) an origination of a $145.6 million first mortgage and mezzanine loan, of which $115.0 million was funded at close, secured by a media campus located in Burbank, CA; (9) an origination of an $136.8 million first mortgage loan and mezzanine loan, of which $112.0 million was funded at close, collateralized by eight, two-story office/research & development buildings located on a campus in San Jose, CA; (10) co-originated a Euro-denominated first mortgage loan with an affiliate of the Manager (loan is secured by a portfolio of 225 retail properties in Finland with $53.8 million funded at close and $12.9 million in future funding); and (11) an origination of a $112.0 first mortgage loan secured by 844,820 square feet of land, which currently consists of 15 parking lots totaling 2,509 spaces, located in Boston’s Seaport District. Additionally, eight loans, totaling $147.5 million, were prepaid or matured during the nine months ended September 30, 2013. | ||||||||||||||||||||
Investment_Securities
Investment Securities | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
6. Investment Securities | ||||||||||||||||||||||||||
Investment securities are comprised of the following as of September 30, 2013 and December 31, 2012, (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Carrying Value | Carrying Value | |||||||||||||||||||||||||
CMBS | $ | 112,436 | $ | 529,434 | ||||||||||||||||||||||
CMBS, fair value option (1) | 85,710 | — | ||||||||||||||||||||||||
RMBS | 316,261 | 333,153 | ||||||||||||||||||||||||
Held-to-maturity (“HTM”) Securities | 37,370 | — | ||||||||||||||||||||||||
Equity Securities | 15,016 | 21,667 | ||||||||||||||||||||||||
Total | $ | 566,793 | $ | 884,254 | ||||||||||||||||||||||
(1) We also had $324.4 million of fair value option CMBS that are eliminated in consolidation against VIE liabilities pursuant to ASC 810. | ||||||||||||||||||||||||||
During the three and nine months ended September 30, 2013, purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three months ended September 30, 2013 | Equity | HTM | RMBS | CMBS | CMBS, fair | Total | ||||||||||||||||||||
Securities | Security | value option | ||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | — | $ | 1,889 | $ | 21,982 | $ | 23,871 | ||||||||||||||
Sales | — | — | — | (206,972 | ) | — | (206,972 | ) | ||||||||||||||||||
Principal collections | — | — | (14,124 | ) | (2,546 | ) | — | (16,670 | ) | |||||||||||||||||
On September 16, 2013, we sold a CMBS position for proceeds of $206.9 million, resulting in a gain of $6.4 million. | ||||||||||||||||||||||||||
Nine months ended September 30, 2013 | Equity | HTM | RMBS | CMBS | CMBS, fair | Total | ||||||||||||||||||||
Securities | Security | value option | ||||||||||||||||||||||||
Purchases | $ | — | $ | 37,174 | $ | 20,090 | $ | 1,889 | $ | 23,601 | $ | 82,754 | ||||||||||||||
Sales | (6,769 | ) | — | (12,713 | ) | (413,323 | ) | (10,072 | ) | (442,877 | ) | |||||||||||||||
Principal collections | — | — | (46,762 | ) | (10,031 | ) | — | (56,793 | ) | |||||||||||||||||
During the three and nine months ended September 30, 2012, purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three months ended September 30, 2012 | RMBS | CMBS | Total | |||||||||||||||||||||||
Purchases | $ | 95,820 | $ | — | $ | 95,820 | ||||||||||||||||||||
Sales | (9,425 | ) | (173,461 | ) | (182,886 | ) | ||||||||||||||||||||
Principal collections | (18,542 | ) | (5,874 | ) | (24,416 | ) | ||||||||||||||||||||
Nine months ended September 30, 2012 | RMBS | CMBS | Total | |||||||||||||||||||||||
Purchases | $ | 203,438 | $ | 372,252 | $ | 575,690 | ||||||||||||||||||||
Sales | (26,049 | ) | (173,461 | ) | (199,510 | ) | ||||||||||||||||||||
Principal collections | (52,310 | ) | (15,142 | ) | (67,452 | ) | ||||||||||||||||||||
For the three and nine months ended September 30, 2012, there were no purchases, sales or principal collections on Equity Securities, Held-to-Maturity Securities, or CMBS where the fair value option has been elected. | ||||||||||||||||||||||||||
CMBS, Fair Value Option | ||||||||||||||||||||||||||
As discussed in the Fair Value Option section in Note 2, we elect the fair value option for LNR’s CMBS in an effort to eliminate accounting mismatches resulting from the current or potential consolidation of securitization VIEs. As of September 30, 2013, the fair value and unpaid principal balance of CMBS where we have elected the fair value option, before consolidation of securitization VIEs, were $410.1 million and $2.9 billion, respectively. These balances represent our economic interests in these assets. However, as a result of our consolidation of securitization VIEs, the vast majority of this fair value ($324.4 million at September 30, 2013) is eliminated against VIE liabilities before arriving at our GAAP balance for fair value option CMBS. During the three and nine months ended September 30, 2013, we purchased $33.4 million and $116.8 million, respectively, of CMBS for which we elected the fair value option. Due to our consolidation of securitization VIEs, a significant portion of this amount ($11.4 million and $93.2 million during the three and nine months ended September 30, 2013, respectively) is reflected as repayment of debt of consolidated VIEs in our condensed consolidated statements of cash flows. | ||||||||||||||||||||||||||
As of September 30, 2013, none of our CMBS where we have elected the fair value option are variable rate. The table below summarizes various attributes of our investment in fair value option CMBS as of September 30, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(1) | ||||||||||||||||||||||||||
CMBS, fair value option | 5.6 | % | D | -2 | 3.4 | |||||||||||||||||||||
(1) The WAL of each security is calculated based on the period of time over which we expect to receive principal cash flows. Expected principal cash flows are based on contractual payments net of expected losses. | ||||||||||||||||||||||||||
(2) Includes $56.1 million in fair value option CMBS that are not rated. The remaining $29.6 million in fair value option CMBS have a weighted average rating of CCC-. | ||||||||||||||||||||||||||
CMBS and RMBS | ||||||||||||||||||||||||||
The Company classified all of its CMBS and RMBS investments where the fair value option has not been elected as available-for-sale as of September 30, 2013 and December 31, 2012. Theses CMBS and RMBS are reported at fair value in the balance sheet with changes in fair value recorded in accumulated other comprehensive income (loss). | ||||||||||||||||||||||||||
The tables below summarize various attributes of our investments in available-for-sale CMBS and RMBS where the fair value option has not been elected as of September 30, 2013 and December 31, 2012, (amounts in thousands): | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) Recognized in | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||
September 30, 2013 | Purchase | Credit | Recorded | Non-Credit | Unrealized | Unrealized | Net | Fair Value | ||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Gains | Losses | Fair Value | ||||||||||||||||||||
Cost | Cost | Adjustment | ||||||||||||||||||||||||
CMBS | $ | 99,081 | $ | — | $ | 99,081 | $ | — | $ | 13,355 | $ | — | $ | 13,355 | $ | 112,436 | ||||||||||
RMBS | 273,836 | (10,573 | ) | 263,263 | (34 | ) | 56,390 | (3,358 | ) | 52,998 | 316,261 | |||||||||||||||
Total | $ | 372,917 | $ | (10,573 | ) | $ | 362,344 | $ | (34 | ) | $ | 69,745 | $ | (3,358 | ) | $ | 66,353 | $ | 428,697 | |||||||
September 30, 2013 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon(1) | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(2) | ||||||||||||||||||||||||||
CMBS | 11.5 | % | BB+ | 6 | ||||||||||||||||||||||
RMBS | 1 | % | CCC | 5.9 | ||||||||||||||||||||||
(1) Calculated using the one-month LIBOR rate as of September 30, 2013 of 0.17885% for variable rate securities. | ||||||||||||||||||||||||||
(2) Represents the WAL of each respective group of MBS. The WAL of each individual security is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with the denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of September 30, 2013. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) Recognized in | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||
December 31, 2012 | Purchase | Credit | Recorded | Non-Credit | Unrealized | Unrealized | Net | Fair Value | ||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Gains | Losses | Fair Value | ||||||||||||||||||||
Cost | Cost | Adjustment | ||||||||||||||||||||||||
CMBS | $ | 498,064 | $ | — | $ | 498,064 | $ | — | $ | 31,370 | $ | — | $ | 31,370 | $ | 529,434 | ||||||||||
RMBS | 293,321 | (10,194 | ) | 283,127 | — | 50,717 | (691 | ) | 50,026 | 333,153 | ||||||||||||||||
Total | $ | 791,385 | $ | (10,194 | ) | $ | 781,191 | $ | — | $ | 82,087 | $ | (691 | ) | $ | 81,396 | $ | 862,587 | ||||||||
December 31, 2012 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon(1) | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(3) | ||||||||||||||||||||||||||
CMBS | 4.3 | % | BB+ | -2 | 3.3 | |||||||||||||||||||||
RMBS | 1.1 | % | CCC+ | 5.4 | ||||||||||||||||||||||
(1) Calculated using the December 31, 2012 one-month LIBOR rate of 0.2087% for floating rate securities. | ||||||||||||||||||||||||||
(2) Approximately 20.4% of the CMBS securities are rated BB+. The remaining 79.6% are securities where the obligors are certain special purpose entities that were formed to hold substantially all of the assets of a worldwide operator of hotels, resorts and timeshare properties; the securities are not rated but the loan-to-value ratio was estimated to be in the range of 39%-44% at December 31, 2012. | ||||||||||||||||||||||||||
(3) Represents the WAL of each respective group of MBS. The WAL of each individual security or loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of December 31, 2012. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
As of September 30, 2013, 1.5% of the CMBS where we have not elected the fair value option are variable rate. As of December 31, 2012, 79.6% of our CMBS are variable rate and paid interest at LIBOR plus a weighted average spread of 2.3%. As of September 30, 2013, approximately $275.4 million, or 87.1%, of the RMBS are variable rate and pay interest at LIBOR plus a weighted average spread of 0.37%. As of December 31, 2012, approximately $281.2 million, or 84.4%, of the RMBS were variable rate and pay interest at LIBOR plus a weighted average spread of 0.38%. We purchased all of the RMBS at a discount that will be accreted into income over the expected remaining life of the security. The majority of the income from this strategy is earned from the accretion of these discounts. | ||||||||||||||||||||||||||
The following table contains a reconciliation of aggregate principal balance to amortized cost for our CMBS and RMBS as of September 30, 2013 and December 31, 2012, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Principal balance | $ | 99,081 | $ | 452,868 | $ | 519,575 | $ | 489,218 | ||||||||||||||||||
Accretable yield | — | (110,265 | ) | (21,511 | ) | (108,486 | ) | |||||||||||||||||||
Non-accretable difference | — | (79,340 | ) | — | (97,605 | ) | ||||||||||||||||||||
Total discount | — | (189,605 | ) | (21,511 | ) | (206,091 | ) | |||||||||||||||||||
Amortized cost | $ | 99,081 | $ | 263,263 | $ | 498,064 | $ | 283,127 | ||||||||||||||||||
The principal balance of credit deteriorated RMBS was $350.4 million and $438.0 million as of September 30, 2013 and December 31, 2012, respectively. Accretable yield related to these securities totaled $85.5 million and $93.6 million, as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our CMBS and RMBS during the three month period ended September 30, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
For the three months ended September 30, 2013 | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Balance as of June 30, 2013 | $ | 7,081 | $ | 107,317 | $ | — | $ | 89,306 | ||||||||||||||||||
Accretion of discount | (885 | ) | (5,940 | ) | — | — | ||||||||||||||||||||
Principal write-downs | — | — | — | (1,130 | ) | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (6,196 | ) | — | — | — | |||||||||||||||||||||
OTTI | — | 52 | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | — | 8,836 | — | (8,836 | ) | |||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | $ | 110,265 | $ | — | $ | 79,340 | ||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our CMBS and RMBS during the nine month period ended September 30, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
For the nine months ended September 30, 2013 | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 21,511 | $ | 108,486 | $ | — | $ | 97,605 | ||||||||||||||||||
Accretion of discount | (5,442 | ) | (17,846 | ) | — | — | ||||||||||||||||||||
Principal write-downs | — | — | — | (2,133 | ) | |||||||||||||||||||||
Purchases | — | 5,738 | — | 1,758 | ||||||||||||||||||||||
Sales | (16,069 | ) | (2,418 | ) | — | (2,038 | ) | |||||||||||||||||||
OTTI | — | 453 | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | — | 15,852 | — | (15,852 | ) | |||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | $ | 110,265 | $ | — | $ | 79,340 | ||||||||||||||||||
Subject to certain limitations on durations, we have allocated an amount to invest in RMBS that cannot exceed 10% of our total assets excluding LNR VIEs. We have engaged a third party manager who specializes in RMBS to execute the trading of RMBS, the cost of which was $0.3 million and $1.7 million for the three and nine months ended September 30, 2013, respectively, which has been recorded as management fees in the accompanying condensed consolidated statements of operations. These costs for the three and nine months ended September 30, 2012 were $0.7 million and $1.5 million, respectively. | ||||||||||||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of the available-for-sale securities where (i) we have not elected the fair value option, (ii) that were in an unrealized loss position as of September 30, 2013, and (iii) for which OTTIs (full or partial) have not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
As of September 30, 2013 | Securities with a loss less | Securities with a loss | Securities with a loss | Securities with a loss | ||||||||||||||||||||||
than 12 months | greater than 12 months | less than 12 months | greater than 12 months | |||||||||||||||||||||||
CMBS | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
RMBS | 45,304 | 1,604 | (2,874 | ) | (519 | ) | ||||||||||||||||||||
Total | 45,304 | $ | 1,604 | $ | (2,874 | ) | $ | (519 | ) | |||||||||||||||||
As of September 30, 2013, there were 11 securities with unrealized losses. After evaluating each security we determined that the impairments on 2 of these securities, totaling $86 thousand, were other-than-temporary. Credit losses represented $52 thousand of this total, which we calculated by comparing (i) the estimated future cash flows of each security discounted at the yield determined as of the initial acquisition date or, if since revised, as of the last date previously revised, to (ii) our amortized cost basis. We further determined that the remaining security was not other-than-temporarily impaired. We considered a number of factors in reaching this conclusion, including that we did not intend to sell any individual security, it was not considered more likely than not that we would be forced to sell any individual security prior to recovering our amortized cost, and there were no material credit events that would have caused us to otherwise conclude that we would not recover our cost. Significant judgment is used in projecting cash flows for our non-agency RMBS. As a result, actual income and/or impairments could be materially different from what is currently projected and/or reported. For the three months ended September 30, 2012, our aggregate MBS credit losses (as reported in the condensed consolidated statement of operations) were $0.7 million. | ||||||||||||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of our securities that were in an unrealized loss position as of December 31, 2012 for which OTTIs (full or partial) had not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
As of December 31, 2012 | Securities with a loss less | Securities with a loss | Securities with a loss | Securities with a loss | ||||||||||||||||||||||
than 12 months | greater than 12 months | less than 12 months | greater than 12 months | |||||||||||||||||||||||
CMBS | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
RMBS | 4,096 | 599 | (654 | ) | (37 | ) | ||||||||||||||||||||
Total | $ | 4,096 | $ | 599 | $ | (654 | ) | $ | (37 | ) | ||||||||||||||||
HTM Securities | ||||||||||||||||||||||||||
In March 2013, we originated a preferred equity interest of $37.2 million in a limited liability company that owns commercial real estate. The preferred equity interest matures in October 2014. Due to this mandatory redemption feature, we have classified this investment as a debt security in accordance with GAAP, and we expect to hold the investment to its maturity. The preferred equity investment is to receive a monthly return on investment at a rate of 1-Month LIBOR plus a spread of 10.0%. | ||||||||||||||||||||||||||
Equity Securities | ||||||||||||||||||||||||||
On December 14, 2012, we acquired 9,140,000 ordinary shares (approximately a 4% interest) in Starwood European Real Estate Finance Limited (“SEREF”), a debt fund that is externally managed by an affiliate of our Manager and is listed on the London Stock Exchange, for approximately $14.7 million. We have elected to report the investment at fair value because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market, and also due to potential lags in reporting resulting from differences in the respective regulatory requirements. We have not received any distributions from SEREF, and the fair value of the investment remeasured in USD was $15.0 million as of September 30, 2013. | ||||||||||||||||||||||||||
Residential_Real_Estate
Residential Real Estate | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Residential Real Estate | ' | |||||||||||||||
Residential Real Estate | ' | |||||||||||||||
7. Residential Real Estate | ||||||||||||||||
During the second quarter of 2012, we began to purchase single family residential homes and non-performing residential loans. At acquisition, a significant portion of the properties were either vacant or had occupants that were not subject to a lease and/or were not paying rent to the previous owner. Upon acquisition, we began actively preparing the properties to be either rented or sold, as applicable. For the three and nine months ended September 30, 2013, we incurred approximately $9.7 million and $31.3 million, respectively, in costs of preparing these properties for their intended use, and such costs were added to our investment basis. | ||||||||||||||||
Type | Depreciable | Acquisition | Cost Capitalized | Accumulated | Net Book | |||||||||||
Life | Cost | Subsequent to | Depreciation | Value | ||||||||||||
Acquisition | ||||||||||||||||
Building | 30 years | $ | 173,554 | $ | 19,909 | $ | 3,086 | $ | 190,377 | |||||||
Land | — | 49,706 | — | — | 49,706 | |||||||||||
Furniture & Fixtures | 5 years | 167 | 616 | 105 | 678 | |||||||||||
Development Assets (1) | — | 291,058 | 16,203 | — | 307,261 | |||||||||||
$ | 514,485 | $ | 36,728 | $ | 3,191 | $ | 548,022 | |||||||||
(1) Development Assets represent residential properties that are being renovated or otherwise prepared for their intended use, which is either sale or rental. Costs incurred during the development period are capitalized. |
Investment_in_Unconsolidated_E
Investment in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2013 | |
Investment in Unconsolidated Entities | ' |
Investment in Unconsolidated Entities | ' |
8. Investment in Unconsolidated Entities | |
In connection with our acquisition of LNR, we acquired a 50% interest in a joint venture which holds an investment in a privately-held commercial real estate services provider. We account for our interest in the joint venture under the equity method of accounting. The investment is reflected at a balance of $55.8 million as of September 30, 2013. | |
In connection with our acquisition of LNR, we acquired a 50% interest in a venture which holds investments in real estate, real estate-related income-bearing debt instruments and other forms of real estate related income bearing securities consisting of, but not limited to CMBS, B-notes, mezzanine debt and distressed debt products across Europe. The investment, which is accounted for under the equity method, is reflected at a balance of $23.8 million as of September 30, 2013. | |
In connection with our acquisition of LNR, we acquired a 50% interest in a venture which originates small balance real estate loans to commercial customers. The investment, which is accounted for under the equity method, is reflected at a balance of $21.1 million as of September 30, 2013. | |
In June 2011, we acquired a non-controlling 49% interest in a privately-held limited liability company (“LLC”) for $25.5 million, which is accounted for under the equity method. In December 2011 we sold 20% of this investment for an amount that approximated our carrying amount. The LLC owns a mezzanine loan participation, and our share of earnings for the three and nine months ended September 30, 2013 was $0.7 million and $2.2 million, respectively, which is included in earnings from unconsolidated entities in our condensed consolidated statements of operations. Our share of earnings for the three and nine months ended September 30, 2012 was $0.6 million and $1.7 million, respectively. As of September 30, 2013 and December 31, 2012, our carrying value was $24.0 million and $24.3 million, respectively. | |
Prior to 2011, we had committed $9.7 million to acquire at least a 5% interest in a privately-held limited liability company formed to acquire assets of a commercial real estate debt management and servicing business primarily for the opportunity to participate in debt opportunities arising from the venture’s special servicing business (the “Participation Right”). As of September 30, 2013, we had funded $8.0 million of our commitment. As of both September 30, 2013, and December 31, 2012, the cost basis was $8.0 million, and we recognized $0.2 million and $1.3 million of income from distributions during the three and nine months ended September 30, 2013, respectively, related to this investment, which is included in earnings from unconsolidated entities in our condensed consolidated statements of operations. We recognized $0.2 million and $1.0 million income from distributions during the three and nine months ended September 30, 2012, respectively, related to this investment. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Goodwill and Intangible Assets | ' | ||||
Goodwill and Intangible Assets | ' | ||||
9. Goodwill and Intangible Assets | |||||
Goodwill | |||||
Goodwill at September 30, 2013 represents the excess of consideration transferred over the fair value of net assets acquired on April 19, 2013 for the acquisition of LNR. The goodwill recognized is attributable to value embedded in LNR’s existing platform, which includes an international network of commercial real estate asset managers, work-out specialists, underwriters and administrative support professionals as well as proprietary historical performance data on commercial real estate assets. The tax deductible component of our goodwill as of April 19, 2013 is $101.7 million and is deductible over 15 years. | |||||
Servicing Rights Intangibles | |||||
In connection with the LNR acquisition, we identified domestic and European servicing rights that existed at the purchase date, based upon the expected future cash flows of the associated servicing contracts. All of our servicing fees are specified by these Pooling and Servicing Agreements. The table below presents information about our GAAP servicing intangibles for the LNR Stub Period (in thousands). At September 30, 2013, the balance of the domestic servicing intangible is net of $88.6 million that is eliminated in consolidation pursuant to ASC 810 against VIE assets in connection with our consolidation of securitization VIEs. Before VIE consolidation, the domestic servicing intangible has a balance of $246.6 million, which represents our economic interest in this asset. | |||||
Domestic servicing rights, at fair value | |||||
Fair value at April 19, 2013 | $ | 156,993 | |||
Changes in fair value due to changes in inputs and assumptions | 1,030 | ||||
Fair value at September 30, 2013 | 158,023 | ||||
European servicing rights | |||||
Carrying value at April 19, 2013 (fair value) | 32,649 | ||||
Amortization | (4,765 | ) | |||
Foreign exchange gain | 1,825 | ||||
Carrying value at September 30, 2013 (fair value of $31.4 million) | 29,709 | ||||
Total servicing rights at September 30, 2013 | $ | 187,732 | |||
The future amortization expense for the European servicing intangible is expected to be as follows (in thousands): | |||||
2013 (remainder of) | $ | 3,160 | |||
2014 | 12,961 | ||||
2015 | 8,808 | ||||
2016 | 3,472 | ||||
2017 and thereafter | 1,308 | ||||
Total | $ | 29,709 |
Secured_Financing_Agreements
Secured Financing Agreements | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Secured Financing Agreements | ' | ||||||||||||||||||||||
Secured Financing Agreements | ' | ||||||||||||||||||||||
10. Secured Financing Agreements | |||||||||||||||||||||||
The following table is a summary of our secured financing agreements in place as of September 30, 2013 (in thousands). Refer to our Form 10-K for additional information regarding our secured financing agreements: | |||||||||||||||||||||||
Facility | Revolver | Eligible | Current | Extended | Pricing | Pledged | Maximum | Carrying | |||||||||||||||
Type | Assets | Maturity | Maturity (a) | Asset | Facility | Value | |||||||||||||||||
Carrying | Size | ||||||||||||||||||||||
Value | |||||||||||||||||||||||
Wells Fargo II | Repurchase | Yes | Identified Loans | Aug-14 | Aug-15 | LIBOR + 1.75% to 6% | $ | 842,044 | $ | 550,000 | $ | 246,810 | |||||||||||
Wells Fargo III | Repurchase | Yes | Identified RMBS | (c) | N/A | LIBOR + 1.90% | $ | 289,830 | $ | 175,000 | $ | 72,719 | |||||||||||
Wells Fargo IV | Repurchase | No | Identified Loans | Dec-14 | Dec-16 | LIBOR + 2.75% | $ | 210,949 | $ | 154,935 | $ | 154,935 | |||||||||||
Goldman III | Repurchase | No | Single Borrower Secured Note | Sep-15 | N/A | LIBOR + 3.70% | $ | 210,125 | $ | 149,989 | $ | 149,989 | |||||||||||
Citibank | Repurchase | Yes | Identified Loans | Mar-14 | Mar-17 | LIBOR + 1.75% to 3.75% | $ | 158,643 | $ | 125,000 | $ | 100,952 | |||||||||||
Borrowing Base | Bank Credit Facility | Yes | Identified Loans | Sep-15 | Sep-17 | LIBOR + 3.25% (b) | $ | 591,916 | $ | 250,000 | — | ||||||||||||
Onewest Bank | Repurchase | No | Identified Loans | Jul-15 | Jul-17 | LIBOR + 3.00% | $ | 124,822 | $ | 84,012 | $ | 84,012 | |||||||||||
Conduit I | Repurchase | Yes | Identified Loans | Sep-14 | Sep-14 | LIBOR + 2.20% | $ | 75,234 | $ | 250,000 | $ | 55,395 | |||||||||||
Conduit II | Repurchase | Yes | Identified Loans | Nov-14 | Nov-14 | LIBOR + 2.10% | $ | 203,887 | $ | 150,000 | $ | 149,438 | |||||||||||
Term Loan | Syndicated Facility | Yes | Specifically Identified Assets | Apr-20 | Apr-20 | LIBOR + 2.75% (b) | $ | 1,726,171 | $ | 298,500 | $ | 297,794 | (d) | ||||||||||
Total | $ | 1,312,044 | |||||||||||||||||||||
(a) | Subject to certain conditions as defined in facility agreement. | ||||||||||||||||||||||
(b) | Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||||
(c) | The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 13, 2015. | ||||||||||||||||||||||
(d) | Term loan outstanding balance is net of $706 thousand in discount amortization. | ||||||||||||||||||||||
On April 19, 2013, we assumed two repurchase facilities from LNR. The first is an agreement between Starwood Mortgage Funding I LLC (“SMF I”), an indirect wholly owned subsidiary, and Goldman Sachs Mortgage Company (the “Conduit Repurchase Agreement I”). Conduit Repurchase Agreement I provides for funding of up to $250.0 million for the origination of commercial mortgage loans for securitization. This facility is secured by the mortgage loans originated under this facility and accrues interest at one-month LIBOR plus a pricing margin of 2.20%. As of September 30, 2013, $55.4 million was outstanding under this agreement and the carrying value of the pledged collateral was $75.2 million. The Company guarantees certain of the obligations of SMF I under the agreement up to a maximum liability of 25% of the then currently outstanding repurchase price of all purchased assets. | |||||||||||||||||||||||
The second agreement is between Starwood Mortgage Funding II LLC (“SMF II”), an indirect wholly owned subsidiary and Barclays Bank PLC (the “Conduit Repurchase Agreement II”). Conduit Repurchase Agreement II provides for funding of up to $150.0 million for the origination of commercial mortgage loans for securitization. This facility is secured by the mortgage loans originated under this facility and accrues interest at one-month LIBOR plus a pricing margin of 2.10%. As of September 30, 2013, $149.4 million was outstanding under this agreement and the carrying value of the pledged collateral was $203.9 million. The Company guarantees certain of the obligations of SMF II under the agreement up to a maximum liability of 20% of the then currently outstanding repurchase price of all purchased assets. | |||||||||||||||||||||||
Also on April 19, 2013, we assumed LNR’s senior credit facility. Simultaneously with the acquisition, we repaid the outstanding balance plus accrued interest totaling $268.9 million, and entered into a new $300 million term loan facility which is rated BB+/Ba2(S&P/Moody’s). The term loan facility has a seven year term maturing in April 2020. Advances under the Term Loan Facility accrue interest at a per annum rate of one-month LIBOR plus a spread of 2.75% with a 0.75% LIBOR floor and an overall borrowing cost of 3.84% per annum. In addition, the fees to obtain the facility were $7.1 million, which are reflected as other assets. | |||||||||||||||||||||||
The following table sets forth our five-year principal repayments schedule for the secured financings, assuming no defaults or expected extensions and excluding the loan transfer secured borrowings (amounts in thousands). Our credit facilities generally require principal to be paid down prior to the facilities’ respective maturities if and when we receive principal payments on, or sell, the investment collateral that we have pledged. The amount reflected in each period includes principal repayments on our credit facilities that would be required if (i) we received the repayments that we expect to receive on the investments that have been pledged as collateral under the credit facilities, as applicable, and (ii) if the credit facilities that are expected to have amounts outstanding at their current maturity dates are not extended or if the respective amounts outstanding are not otherwise refinanced: | |||||||||||||||||||||||
2013 (remainder of) | $ | 239,106 | |||||||||||||||||||||
2014 | 589,295 | ||||||||||||||||||||||
2015 | 192,599 | ||||||||||||||||||||||
2016 | 3,000 | ||||||||||||||||||||||
2017 and thereafter (1) | 288,750 | ||||||||||||||||||||||
Total | $ | 1,312,750 | |||||||||||||||||||||
(1) Principal paydown of the Term Loan in 2020 excludes $706 thousand in discount amortization. | |||||||||||||||||||||||
Secured financing maturities for 2013 primarily relate to $32.4 million on the OneWest Bank Repurchase Agreement, $55.4 million on the Conduit Repurchase Agreement I and $149.4 million on the Conduit Repurchase Agreement II. | |||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, we had approximately $11.6 million and $7.8 million, respectively, of capitalized financing costs, net of amortization which is included in other assets on our consolidated balance sheets. For the three and nine months ended September 30, 2013, approximately $2.1 million and $7.0 million, respectively, of amortization was included in interest expense on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2012, approximately $1.5 million and $3.9 million, respectively, of amortization was included in interest expense on our condensed consolidated statements of operations. | |||||||||||||||||||||||
Convertible_Senior_Notes
Convertible Senior Notes | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
11. Convertible Senior Notes | |||||||||||||||
On February 15, 2013, we issued $600.0 million of 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”). The 2018 Notes were sold to the underwriters at a discount of 2.05%, resulting in net proceeds to us of $587.7 million. On July 3, 2013, we issued $460.0 million of 4.00% Convertible Senior Notes due 2019 (the “2019 Notes”). The 2019 Notes were sold to the underwriters at a discount of 2.125%, resulting in net proceeds to us of $450.2 million. The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of September 30, 2013 (amounts in thousands, except rates): | |||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Remaining Period of | ||||||||||
Amount | Rate | Rate (1) | Rate (2) | Date | Amortization | ||||||||||
2018 Notes | $ | 600,000 | 4.55 | % | 6.08 | % | 35.5981 | 2/15/18 | 4.4 years | ||||||
2019 Notes | $ | 460,000 | 4 | % | 5.37 | % | 37.9896 | 1/15/19 | 5.3 years | ||||||
As of | |||||||||||||||
September 30, 2013 | |||||||||||||||
Total principal | $ | 1,060,000 | |||||||||||||
Net unamortized discount | (64,928 | ) | |||||||||||||
Carrying amount of debt components | $ | 995,072 | |||||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,502 | |||||||||||||
(1) Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
(2) The conversion rate represents the number of common shares issuable per $1,000 principal amount of Convertible Notes converted. The initial conversion rate for the 2018 Notes was 35.5391, but was adjusted to 35.5981 in accordance with the applicable indenture because the dividend distributions of $0.46 per share declared in each of the second and third quarters of 2013 exceeded the initial dividend threshold amount of $0.44 per share specified in the indenture. No such adjustment was necessary with respect to the 2019 Notes because the initial dividend threshold amount is $0.46 per share in the applicable indenture. The Company has the option to settle any conversions in cash, common shares or a combination thereof. The if-converted value of the Convertible Notes does not exceed their principal amount at September 30, 2013 since the closing market price of the Company’s common stock of $23.97 per share does not exceed the implicit conversion prices of $28.09 per share for the 2018 Notes and $26.32 for the 2019 Notes . | |||||||||||||||
ASC Topic 470-20 requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. The Company measured the fair value of the debt components of the 2018 Notes and 2019 Notes as of their respective issuance dates based on effective interest rates of 6.08% and 5.37%, respectively. As a result, the Company attributed an aggregate of approximately $48.5 million of the proceeds to the equity components of the notes, which represents the excess proceeds received over the fair value of the liability components of the notes at the date of issuance. The equity components of the Convertible Notes have been reflected within additional paid-in capital in the condensed consolidated balance sheet as of September 30, 2013. The resulting debt discount is being amortized over the period during which the Convertible Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Convertible Notes will increase in subsequent reporting periods through the maturity date as the notes accrete to their par value over the same period. The aggregate contractual interest expense was approximately $11.4 million and $21.5 million for the three and nine months ended September 30, 2013, respectively. With respect to the amortization of the discount on the liability components of the Convertible Notes, the Company reported additional non-cash interest expense of approximately $3.0 and $5.7 million for the three and nine months ended September 30, 2013, respectively. | |||||||||||||||
Prior to the close of the business day immediately preceding September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, the Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 130% of the conversion price of the respective Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the Convertible Notes was less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10-day average closing market price of its common stock or the per-share value of certain distributions exceeds the market price of the Company’s common stock by more than 10% or (4) other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.). On or after September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, holders may convert each of their notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date irrespective of the foregoing conditions. | |||||||||||||||
Loan_SecuritizationSale_Activi
Loan Securitization/Sale Activities | 9 Months Ended |
Sep. 30, 2013 | |
Loan Securitization/Sale Activities | ' |
Loan Securitization/Sale Activities | ' |
12. Loan Securitization/Sale Activities | |
As described below, we regularly sell loans and notes under various strategies. We evaluate such sales as to whether they meet the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transfer of control. Unless otherwise described below, the sales during the three and nine months ended September 30, 2013 met the criteria for sale accounting. | |
Within LNR, we originate commercial mortgage loans with the intent to sell these mortgage loans to SPEs for the purposes of securitization. These SPEs then issue CMBS that are collateralized in part by these assets, as well as other assets transferred to the SPE. In certain instances, we retain a subordinated interest in the SPE and serve as special servicer for the SPE. During the three months ended September 30, 2013 and the LNR Stub Period, we sold $363.7 million and $814.8 million, respectively, par value of loans held-for-sale from our conduit platform for their fair values of $375.2 million and $851.5 million, respectively. During the three months ended September 30, 2013 and the LNR Stub Period, the sale proceeds were used in part to repay $272.1 million and $610.4 million, respectively, of the outstanding balance of the repurchase agreements associated with these loans. | |
Within the Real Estate Investment Lending segment (refer to Note 24), we originate or acquire loans and then subsequently sell a senior portion, which can be represented in various forms including first mortgages, A-Notes and senior participations. Typically, our motivation for entering into these transactions is to effectively create leverage on the subordinated position that we will retain and hold for investment. During the third quarter 2013, we sold $261.6 million in face amount of first mortgage loans, including a $100.0 million A-note into securitization. LNR was engaged as the special servicer in the securitization transaction, which represents a form of continuing involvement that we concluded was not significant and therefore accounted for the transaction as a sale. During the second quarter 2013, we concurrently sold senior participations in two separate B-Notes, which generated $95.0 million in aggregate proceeds. We retained the subordinated interests and therefore accounted for the sales as secured borrowings as required by GAAP. In addition, we sold first mortgages in May and June where we held and retained mezzanine loans. These sales generated $52.9 million in total proceeds. During the three months ended March 31, 2013, a related party venture that we consolidate (refer to Note 11) sold its first mortgage loan to independent third parties. We immediately thereafter purchased a pari-passu participation in the loan such that our economic interest in the loan was effectively unchanged. We did not recognize any gain on sale from these transactions given that we held the same economic interest in the first mortgage loan after they were consummated. | |
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activity | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||||||||
13. Derivatives and Hedging Activity | ||||||||||||||||||||||
Risk Management Objective of Using Derivatives | ||||||||||||||||||||||
We are exposed to certain risk arising from both our business operations and economic conditions. Refer to our consolidated financial statements and notes thereto included in our Form 10-K for further discussion of our risk management objectives and policies. | ||||||||||||||||||||||
Cash Flow Hedges of Forecasted Interest Payments | ||||||||||||||||||||||
In connection with our repurchase agreements, we have entered into eight outstanding interest rate swaps that have been designated as cash flow hedges of the interest rate risk associated with forecasted interest payments. As of September 30, 2013, the aggregate notional of our interest rate swaps designated as cash flow hedges of interest rate risk totaled $183.4 million. Under these agreements, we will pay fixed monthly coupons at a fixed rates ranging from 0.557% to 2.228% of the notional amount to the counterparty and receive floating rate LIBOR. Our interest rate swaps designated as cash flow hedges of interest rate risk have maturities ranging from May 2014 to May 2021. | ||||||||||||||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2013 and 2012 we did not recognize any hedge ineffectiveness in earnings. | ||||||||||||||||||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the associated variable-rate debt. Over the next twelve months, we estimate that an additional $1.4 million will be reclassified as an increase to interest expense. We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 93 months. | ||||||||||||||||||||||
Non-designated Hedges | ||||||||||||||||||||||
Derivatives not designated as hedges are derivatives that do not meet the criteria for hedge accounting under GAAP or for which we have not elected to designate as hedges. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in gain (loss) on derivative financial instruments in the consolidated statements of operations. | ||||||||||||||||||||||
During the three months ended September 30, 2013, we entered into 14 forward contracts whereby we agree to sell an amount of GBP or EUR for agreed upon amount of USD at various dates from October 2013 through March 2016. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. | ||||||||||||||||||||||
As of September 30, 2013, we had 45 foreign exchange forward derivatives to sell GBP with a total notional amount of GBP 198.3 million, one foreign exchange forward derivative to buy GBP with a total notional amount of GBP 64.1 million and 20 foreign exchange forward derivatives to sell EUR with a total notional of EUR 132.4 million that were not designated as hedges in qualifying hedging relationships. | ||||||||||||||||||||||
The LNR conduit platform uses interest rate and credit index instruments to manage exposures related to commercial mortgage loans held-for-sale. As of September 30, 2013, there were 34 interest rate swaps where the Company is paying fixed rates, with maturities ranging from 3 to 10 years and a total notional amount of $239.1 million. As of September 30, 2013, there were four credit index instruments with a total notional amount of $50.0 million. | ||||||||||||||||||||||
The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of September 30, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||||
Tabular Disclosure of Fair Values of Derivative Instruments | ||||||||||||||||||||||
Derivatives in an Asset Position | Derivatives in a Liability Position | |||||||||||||||||||||
As of September 30, 2013 | As of December 31, | As of September 30, 2013 | As of December 31, | |||||||||||||||||||
2012 | 2012 | |||||||||||||||||||||
Balance | Fair | Balance | Fair | Balance Sheet | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | Location | Value | Sheet | Value | |||||||||||||||
Location | Location | Location | ||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||
Interest rate swaps | Derivative Assets | $ | 96 | Derivative Assets | $ | — | Derivative Liabilities | $ | 1,084 | Derivative Liabilities | $ | 2,571 | ||||||||||
Total derivatives designated as hedging instruments | 96 | — | 1,084 | 2,571 | ||||||||||||||||||
Derivatives not designatedas hedging instruments: | ||||||||||||||||||||||
Interest rate swaps | Derivative Assets | 3,243 | Derivative Assets | 4,892 | Derivative Liabilities | 6,186 | Derivative Liabilities | 1,772 | ||||||||||||||
Foreign exchange contracts | Derivative Assets | 3,243 | N/A | 4,335 | Derivative Liabilities | 24,982 | Derivative Liabilities | 23,427 | ||||||||||||||
Credit index instruments | Derivative Assets | 2,931 | N/A | — | Derivative Liabilities | — | N/A | — | ||||||||||||||
Total derivatives not designated as hedging instruments | 9,417 | 9,227 | 31,168 | 25,199 | ||||||||||||||||||
Total derivatives | $ | 9,513 | $ | 9,227 | $ | 32,252 | $ | 27,770 | ||||||||||||||
Cash flow hedges impact for the three months ended September 30, 2013: | ||||||||||||||||||||||
Derivative type for | Amount of Loss | Location of loss | Amount of loss | Location of loss | Amount of loss | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 594 | Interest Expense | $ | 397 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the three months ended September 30, 2012: | ||||||||||||||||||||||
Derivative type for | Amount of loss | Location of loss | Amount of loss | Location of gain | Amount of gain | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 1,072 | Interest Expense | $ | 661 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the nine months ended September 30, 2013: | ||||||||||||||||||||||
Derivative type for | Amount of Gain | Location of loss | Amount of loss | Location of loss | Amount of loss | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 332 | Interest Expense | $ | 1,251 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the nine months ended September 30, 2012: | ||||||||||||||||||||||
Derivative type for | Amount of loss | Location of loss | Amount of loss | Location of gain | Amount of gain | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 3,534 | Interest Expense | $ | 1,911 | Interest Expense | $ | — | ||||||||||||||
Non-Designated derivatives impact for the three months ended September 30, 2013 and 2012: | ||||||||||||||||||||||
Derivatives Not Designated | Location of Gain/(Loss) | Amount of Gain/(Loss) | ||||||||||||||||||||
Recognized in Income on | Recognized in Income on | |||||||||||||||||||||
Derivative | ||||||||||||||||||||||
as Hedging Instruments | Derivative | 2013 | 2012 | |||||||||||||||||||
Interest Rate Swaps | Gain (loss) on derivative financial instruments | $ | (4,261 | ) | $ | (51 | ) | |||||||||||||||
Foreign Exchange Contracts | Gain (loss) on derivative financial instruments | (17,459 | ) | (7,510 | ) | |||||||||||||||||
Credit Index Instruments | Gain (loss) on derivative financial instruments | (731 | ) | — | ||||||||||||||||||
$ | (22,451 | ) | $ | (7,561 | ) | |||||||||||||||||
Non-Designated derivatives impact for the nine months ended September 30, 2013 and 2012: | ||||||||||||||||||||||
Derivatives Not Designated | Location of Gain/(Loss) | Amount of Gain/(Loss) | ||||||||||||||||||||
Recognized in Income on | Recognized in Income on | |||||||||||||||||||||
Derivative | ||||||||||||||||||||||
as Hedging Instruments | Derivative | 2013 | 2012 | |||||||||||||||||||
Interest Rate Swaps | Gain (loss) on derivative financial instruments | $ | 2,752 | $ | 608 | |||||||||||||||||
Foreign Exchange Contracts | Gain (loss) on derivative financial instruments | (2,692 | ) | (10,392 | ) | |||||||||||||||||
Credit Index Instruments | Gain (loss) on derivative financial instruments | (125 | ) | — | ||||||||||||||||||
$ | (65 | ) | $ | (9,784 | ) | |||||||||||||||||
Credit-risk-related Contingent Features | ||||||||||||||||||||||
We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. We also have certain agreements that contain provisions where if our ratio of principal amount of indebtedness to total assets at any time exceeds 75%, then we could be declared in default of our derivative obligations. | ||||||||||||||||||||||
As of September 30, 2013, the fair value of derivatives in a liability position was $32.3 million. As of September 30, 2013, we had posted collateral of $14.6 million related to our derivative financial instruments. | ||||||||||||||||||||||
Offsetting_Assets_and_Liabilit
Offsetting Assets and Liabilities | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
14. Offsetting Assets and Liabilities | ||||||||||||||||||||
In accordance with Accounting Standards Update (“ASU”) No. 2011-11 and ASU No. 2013-01, we are disclosing the following information to enable users of our financial statements to understand the potential effect of netting arrangements on our financial position for recognized assets and liabilities within the scope of these standards, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | ||||||||||||||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Offset in the | Net Amounts of | Statement of Financial Position | ||||||||||||||||||
As of September 30, 2013 | Gross Amounts | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | of Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Assets | Position | Financial Position | Received | |||||||||||||||||
Derivatives | $ | 9,513 | $ | — | $ | 9,513 | $ | 6,269 | $ | 2,080 | $ | 1,164 | ||||||||
Total | $ | 9,513 | $ | — | $ | 9,513 | $ | 6,269 | $ | 2,080 | $ | 1,164 | ||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Offset in the | Net Amounts of | Statement of Financial Position | ||||||||||||||||||
As of September 30, 2013 | Gross Amounts | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | of Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Liabilities | Position | Financial Position | Pledged | |||||||||||||||||
Derivatives | $ | 32,252 | $ | — | $ | 32,252 | $ | 6,269 | $ | 2,239 | $ | 23,744 | ||||||||
Secured financing facilities (1) | 1,014,250 | — | 1,014,250 | 1,014,250 | — | — | ||||||||||||||
Total | $ | 1,046,502 | $ | — | $ | 1,046,502 | $ | 1,020,519 | $ | 2,239 | $ | 23,744 | ||||||||
(1) The fair value of assets pledged against the Company’s repurchase agreements was $2,115.5 million at September 30, 2013. | ||||||||||||||||||||
With regard to the repurchase agreement liabilities above, the actual fair values and carrying values (if carried at amortized cost) exceed the respective liabilities. However, the amount required to be disclosed as offsetting collateral is limited to the repurchase agreement liability. | ||||||||||||||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Gross | Offset in the | Net Amounts of | Statement of Financial Position | |||||||||||||||||
As of December 31, 2012 | Amounts of | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Assets | Position | Financial Position | Received | |||||||||||||||||
Derivatives | $ | 9,227 | $ | — | $ | 9,227 | $ | 4,335 | $ | 2,989 | $ | 1,903 | ||||||||
Total | $ | 9,227 | $ | — | $ | 9,227 | $ | 4,335 | $ | 2,989 | $ | 1,903 | ||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Gross | Offset in the | Net Amounts of | Statement of Financial Position | |||||||||||||||||
As of December 31, 2012 | Amounts of | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Liabilities | Position | Financial Position | Pledged | |||||||||||||||||
Derivatives | $ | 27,770 | $ | — | $ | 27,770 | $ | 4,335 | $ | — | $ | 23,435 | ||||||||
Secured financing facilities (1) | 1,305,812 | — | 1,305,812 | 1,305,812 | — | — | ||||||||||||||
Total | $ | 1,333,582 | $ | — | $ | 1,333,582 | $ | 1,310,147 | $ | — | $ | 23,435 | ||||||||
With regard to the repurchase agreement liabilities above, the actual fair values and carrying values (if carried at amortized cost) exceed the respective liabilities. However, the amount required to be disclosed as offsetting collateral is limited to the repurchase agreement liability. | ||||||||||||||||||||
(1) The fair value of assets pledged against the Company’s repurchase agreements was $2,502.9 million at December 31, 2012. | ||||||||||||||||||||
Variable_Interest_Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2013 | |
Variable Interest Entities | ' |
Variable Interest Entities | ' |
15. Variable Interest Entities | |
Investment Securities | |
As discussed in Note 2, we evaluate all of our investments and other interests in entities for consolidation, including our investments in CMBS and our retained interests in securitization transactions we initiated, all of which are generally considered to be variable interests in VIEs. | |
The VIEs consolidated in accordance with ASC 810 are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. The assets and other instruments held by these securitization entities are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the securitization entities do not have any recourse to the general credit of any other consolidated entities, nor to us as the primary beneficiary. The SPE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities and any associated components of equity, such as unrealized holding gains or losses or OTTI are eliminated, as is the interest income and any impairment losses related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | |
VIEs in which we are the Primary Beneficiary | |
The inclusion of the assets and liabilities of VIEs in which we are deemed the primary beneficiary has no economic effect on us. Our exposure to the obligations of VIEs is generally limited to our investment in these entities. We are not obligated to provide, nor have we provided, any financial support for any of these consolidated structures. | |
VIEs in which we are not the Primary Beneficiary | |
In certain instances, we hold a variable interest in a VIE in the form of CMBS, but either (i) we are not appointed, or do not serve as, special servicer or (ii) an unrelated third party has the rights to unilaterally remove us as special servicer. In these instances, we do not have the power to direct activities that most significantly impact the trust’s economic performance. In other cases, the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant. For these structures, we are not deemed to be the primary beneficiary of the VIE, and we do not consolidate these VIEs. | |
Two of our CDO structures are currently in default, which pursuant to the underlying indentures, changes the rights of the variable interest holders. Upon default of a CDO, the trustee or senior note holders are allowed to exercise certain rights, including liquidation of the collateral, which at that time, is the activity which would most significantly impact the CDO’s economic performance. Further, when the CDO is in default, the collateral administrator no longer has the option to purchase securities from the CDO. In cases where the CDO is in default and we do not have the ability to exercise rights which would most significantly impact the CDO’s economic performance, we do not consolidate the VIE. As of September 30, 2013, neither of these CDO structures was consolidated. | |
As noted above, we are not obligated to provide, nor have we provided, any financial support for any of our securitization SPEs, whether or not we are deemed to be the primary beneficiary. As such, the risk associated with our involvement in these VIEs is limited to the carrying value of our investment in the entity. As of September 30, 2013, our maximum risk of loss related to VIEs in which we were not the primary beneficiary was $85.7 million on a fair value basis. | |
As of September 30, 2013, the securitization SPEs which we do not consolidate have debt obligations to beneficial interest holders with unpaid principal balances of $142.4 billion. The corresponding assets are comprised primarily of commercial mortgage loans with unpaid principal balances corresponding to the amounts of the outstanding debt obligations. | |
RelatedParty_Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related-Party Transactions | ' |
Related-Party Transactions | ' |
16. Related-Party Transactions | |
Management Agreement | |
We entered into a Management Agreement with our Manager upon closing of our IPO, which provides for an initial term of three years with automatic one-year extensions thereafter unless terminated as described below. Under the Management Agreement, our Manager, subject to the oversight of our board of directors, is required to manage our day-to-day activities, for which our Manager receives a base management fee and is eligible for an incentive fee and stock awards. Our Manager is also entitled to charge us for certain expenses incurred on our behalf, as described below. Refer to our consolidated financial statements and notes thereto included in our Form 10-K for further discussion of this agreement. | |
Base Management Fee. For the three and nine months ended September 30, 2013, approximately $13.5 million and $35.9 million, respectively, was incurred for base management fees. For the three and nine months ended September 30, 2012, approximately $8.5 million and $23.3 million, respectively, was incurred for base management fees. Management fee payable as of September 30, 2013 and December 31, 2012 was $13.5 million and $0, respectively. | |
Incentive Fee. For the three and nine months ended September 30, 2013, approximately $4.8 million and $4.8 million, respectively, was incurred in incentive fees. For the three and nine months ended September 30, 2012, $2.1 million and $7.5 million, respectively, were incurred in incentive fees. During the quarter ended September 30, 2012, we paid the Manager $2.3 million of the incentive fee earned, 50% in cash and the remaining 50% in stock through the issuance of 50,203 shares of common stock at a price of $22.61 per share. Incentive fee payable as of September 30, 2013 and December 31, 2012 was $4.8 million and $0.7 million, respectively. | |
Expense Reimbursement. For the three and nine months ended September 30, 2013, approximately $1.8 million and $6.3 million was incurred, respectively, for executive compensation and other reimbursable expenses of which approximately $1.1 million and $1.1 million was payable as of September 30, 2013 and December 31, 2012, respectively. For the three and nine months ended September 30, 2012, approximately $1.7 million and $4.6 million was incurred, respectively, for executive compensation and other reimbursable expenses. | |
Loan Investments | |
On October 16, 2012, we co-originated $475.0 million in financing for the acquisition and redevelopment of a 10 story retail building located at 701 Seventh Avenue in the Times Square area of Manhattan through a joint venture with Starwood Distressed Opportunity Fund IX (“Fund IX”), an affiliate of our Manager. The financing consists of a fully funded $237.5 million first mortgage loan and a $237.5 million mezzanine loan, of which $137.5 million was funded at close. The remaining $100.0 million will be funded upon reaching certain milestones during the transformation of the property. On October 22, 2012, the joint venture sold a 25% participation in both the first mortgage and mezzanine loan to Vornado Realty Trust (“Vornado”). Upon settling this sale, the Company, Fund IX, and Vornado interest in the first mortgage and mezzanine loans are 56.25%, 18.75% and 25.0%, respectively, and each party will fund their pro rata share of any future fundings. On March 27, 2013, the joint venture, along with Vornado, sold its interest in the first mortgage to Berkadia Proprietary, LLC. Immediately following the sale of the first mortgage, the Company repurchased a 56.25% participation interest in the same first mortgage loan through a wholly owned subsidiary, resulting in no change in net interest for the Company. The joint venture distributed $43.9 million from the sale, net of fees, to Fund IX. The joint venture remains the holder of the mezzanine loan. | |
On April 17, 2013, we purchased two B-notes for $146.7 million from entities substantially all of whose equity was owned by an affiliate of our Manager. The B-Notes are secured by two Class-A office buildings located in Austin, Texas. On May 17, 2013, we sold senior participation interests in the B-notes to a third party, generating $95.0 million in aggregate proceeds. We retained the subordinated interests. | |
On August 12, 2013, we co-originated GBP-denominated first mortgage and mezzanine loans with Starfin Lux S.a.r.l. (“Starfin”), an affiliate of our Manager. The loans are collateralized by a development of a 109 unit retirement community and a 30 key nursing home in Battersea Park, London, England. We and Starfin committed $11.3 million and $22.5 million, respectively, in aggregate for the two loans. The first mortgage loan bears interest at 5.02% and the mezzanine loan bears interest at 15.12%, and the loans each have three-year terms. | |
On September 13, 2013, we co-originated a EUR-denominated first mortgage loan with Starfin. The loan had an initial funding of approximately $102.3 million ($53.8 million for us and $48.5 million for Starfin), and future funding commitments totaling $24.6 million, of which the Company is committed to fund $12.9 million and Starfin is committed to fund $11.7 million. The loan bears interest at three-month EURIBOR plus 7.0% and is secured by a portfolio of approximately 20 retail properties located throughout Finland. The loan matures in October 2016. | |
Related Party Arrangements Resulting from the LNR Acquisition | |
As discussed in Note 8, we acquired 50% of a joint venture in connection with our acquisition of LNR. An affiliate of ours, Fund IX, owns the remaining 50% of the venture. | |
As described in Note 4, in connection with the LNR acquisition, we were required to cash collateralize certain obligations of LNR, including letters of credit and performance obligations. Fund IX funded $6.2 million of this obligation, but the account is within our name and is thus reflected within our restricted cash balance. We have recognized a corresponding payable to Fund IX of $6.2 million within related party payable in our condensed consolidated balance sheets as of September 30, 2013. | |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Stockholders' Equity | ' | ||||||||||||
Stockholders' Equity | ' | ||||||||||||
17. Stockholders’ Equity | |||||||||||||
The Company’s authorized capital stock consists of 100,000,000 shares of preferred stock, $0.01 par value per share, and 500,000,000 shares of common stock, $0.01 par value per share. | |||||||||||||
Our board of directors declared the following dividends in 2013 and 2012: | |||||||||||||
Ex-Dividend Date | Record Date | Announce Date | Pay Date | Amount | Frequency | ||||||||
9/26/13 | 9/30/13 | 8/6/13 | 10/15/13 | $ | 0.46 | Quarterly | |||||||
6/26/13 | 6/28/13 | 5/8/13 | 7/15/13 | $ | 0.46 | Quarterly | |||||||
3/26/13 | 3/28/13 | 2/27/13 | 4/15/13 | $ | 0.44 | Quarterly | |||||||
12/27/12 | 12/31/12 | 12/13/12 | 1/15/13 | $ | 0.1 | Special | |||||||
12/17/12 | 12/31/12 | 11/6/12 | 1/15/13 | $ | 0.44 | Quarterly | |||||||
9/26/12 | 9/28/12 | 8/3/12 | 10/15/12 | $ | 0.44 | Quarterly | |||||||
6/27/12 | 6/29/12 | 5/8/12 | 7/13/13 | $ | 0.44 | Quarterly | |||||||
3/28/12 | 3/30/12 | 2/29/12 | 4/13/12 | $ | 0.44 | Quarterly | |||||||
Equity Incentive Plans | |||||||||||||
The Company currently maintains the Starwood Property Trust, Inc. Manager Equity Plan (the “Manager Equity Plan”), which provides for the grant of stock options, stock appreciation rights, restricted shares of Common stock, restricted stock units and other equity-based awards, including dividend equivalents, to the Manager. The Company also maintains the Starwood Property Trust, Inc. Equity Plan (the “Equity Plan”), which provides for the same types of equity-based awards to natural persons who provide services to the Company, including employees of the Manager. The maximum number of shares that may be made subject to awards granted under either the Manager Equity Plan or the Equity Plan, determined on a combined basis, was initially 3,112,500 shares. On March 26, 2013, the Company amended, subject to stockholder approval, the Manager Equity Plan (the “Amended Manager Equity Plan”) and the Equity Plan (the “Amended Equity Plan,” and together with the Amended Manager Equity Plan, the “Amended Plans”) to (i) increase the number of shares available under such plans for awards granted on or after January 1, 2013 to 6,000,000 shares of common stock (ii) clarify the prohibitions on the repricing of stock options and stock appreciation rights, and (iii) remove the restriction that no more than an aggregate of 50,000 shares may be subject to awards granted to the Company’s chief financial officer and/or compliance officer. On May 2, 2013, the Company’s stockholders voted to approve the Amended Plans. Additionally, we have reserved 100,000 shares of common stock for issuance under the Starwood Property Trust, Inc. Non-Executive Director Stock Plan (Non-Executive Director Stock Plan) which provides for the issuance of restricted stock, restricted stock units and other equity-based awards to non-executive directors. To date, we have only granted restricted stock and restricted stock units under the three equity incentive plans. The holders of awards of restricted stock or restricted stock units are entitled to receive dividends or “distribution equivalents,” which will be payable at such time dividends are paid on our outstanding shares of common stock. | |||||||||||||
Effective August 19, 2011, we granted each of our four independent directors an additional 2,877 shares of restricted stock, with a total fair value of approximately $200,000. The grant will vest in one annual installment on the first anniversary of the grant, subject to the director’s continued service. Effective August 19, 2012, we granted each of our four independent directors an additional 2,201 shares of restricted stock, with a total fair value of approximately $200,000. The grant will vest in one annual installment on the first anniversary of the grant, subject to the director’s continued service. Effective September 4, 2013, we granted each of our four directors an additional 2,807 shares of restricted stock, with a total fair value of approximately $281,000. These grants will vest in one annual installment of the first anniversary of the grant, subject to the director’s continued service. For the three months ended September 30, 2013 and 2012, approximately $47 thousand and $87 thousand were included in general and administrative expense, respectively, related to the grants. For the nine months ended September 30, 2013 and 2012, approximately $147 thousand and $216 thousand were included in general and administrative expense, respectively, related to the grants. | |||||||||||||
In August 2009, we granted 1,037,500 restricted stock units with a fair value of approximately $20.8 million at the grant date to our Manager under the Manager Equity Plan. The grant vested ratably in quarterly installments over three years beginning on October 1, 2009, with 86,458 shares vesting each quarter, respectively. In connection with the supplemental equity offering in December 2010, we granted 1,075,000 restricted stock units with a fair value of approximately $21.8 million at the grant date to our Manager under the Manager Equity Plan. The grant vests ratably in quarterly installments over three years beginning on March 31, 2011, with 89,583 shares vesting each quarter. In May 2012, we granted 30,000 restricted common shares to the Manager under the Manager Equity Plan. In connection with the supplemental equity offering in October 2012, we granted 875,000 restricted stock units with a fair value of approximately $19.9 million at the grant date to our Manager under the Manager Equity Plan. The grants vest ratably in quarterly installments over three years beginning on December 31, 2012, with 72,917 shares vesting each quarter. For the three months ended September 30, 2013 and September 30, 2012, approximately 162,501 and 178,542 shares have vested, respectively, and approximately $3.9 million and $4.1 million has been included in management fees related to these grants, respectively. | |||||||||||||
In May 2012, we issued 70,220 shares of common stock to our Manager at a price of $19.76 per share. The shares were issued to our Manager as a part of the incentive compensation due to our Manager under the Management Agreement with respect to the first quarter of 2012. | |||||||||||||
In March 2013, we issued 13,188 shares of common stock to our Manager at a price of $27.83 per share. The shares were issued to our Manager as a part of the incentive compensation due to our Manager under the Management Agreement with respect to the fourth quarter of 2012. | |||||||||||||
In February 2011, we granted 11,082 restricted shares with a fair value of $250 thousand to an employee under the Equity Plan. The award vests ratably in quarterly installments over three years beginning on March 31, 2011. In March 2012, we granted 17,500 restricted shares with a fair value of $368 thousand to employees under the Equity Plan. Of the total award, 12,500 restricted shares vest in quarterly installments over three years beginning on March 31, 2012 and 5,000 shares vest in annual installments over three years beginning on December 31, 2012. In March 2013, we granted 25,000 restricted shares with a fair value of $694 thousand to an employee under the Equity Plan. The award vests ratably in quarterly installments over three years beginning on March 31, 2013. For the three months ended September 30, 2013 and September 30, 2012, 4,048 and 1,965 shares have vested, respectively, and for the quarters ended September 30, 2013 and September 30, 2012, approximately $98 thousand and $52 thousand was included in general and administrative expense related to the grants, respectively. | |||||||||||||
Schedule of Non-Vested Share and Share Equivalents | |||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | Total | ||||||||||
Grants to | Grants | Unit and | |||||||||||
Independent | to Employees | Restricted Stock | |||||||||||
Directors | Grants | ||||||||||||
to Manager | |||||||||||||
Balance as of June 30, 2013 | 8,804 | 32,265 | 835,417 | 876,486 | |||||||||
Granted | 11,228 | — | — | 11,228 | |||||||||
Vested | (8,804 | ) | (4,048 | ) | (162,501 | ) | (175,353 | ) | |||||
Forfeited | — | — | — | — | |||||||||
Balance as of September 30, 2013 | 11,228 | 28,217 | 672,916 | 712,361 | |||||||||
Vesting Schedule | |||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | Total | ||||||||||
Grants to | Unit | Unit | |||||||||||
Independent | Grants to | Grants to | |||||||||||
Directors | Employees | Manager | |||||||||||
2013 (remainder of) | — | 5,715 | 162,501 | 168,216 | |||||||||
2014 | 11,228 | 14,168 | 291,667 | 317,063 | |||||||||
2015 | — | 8,334 | 218,748 | 227,082 | |||||||||
Total | 11,228 | 28,217 | 672,916 | 712,361 | |||||||||
Benefit_Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2013 | |
Benefit Plans | ' |
Benefit Plans | ' |
18. Benefit Plans | |
Savings Plan | |
In connection with the acquisition of LNR, we assumed LNR’s obligation pursuant to the LNR Property Corporation Savings Plan (the “Savings Plan”), which allows employees to participate and make contributions to the Savings Plan. We may also make discretionary matching contributions to the Savings Plan for the benefit of employees. Participants in the plan self-direct both salary deferral and any employer discretionary matching contributions. The Savings Plan offers various investment options for participants to direct their contributions. Matching contributions to the Savings Plan are recorded as general and administrative expense in the condensed consolidated statements of operations. During the LNR Stub Period, matching contributions to the Savings Plan were immaterial. | |
Long-Term Incentive Arrangements | |
In connection with the LNR acquisition, we also assumed long-term incentive compensation arrangements with certain employees. These arrangements provide for fixed cash payments which vest over three to four year periods and are payable at certain dates within these periods. During the LNR Stub Period, compensation expense associated with these arrangements was immaterial. | |
Change in Control Retention Arrangements | |
In connection with the LNR acquisition, we assumed certain performance obligations under the LNR Property LLC Change in Control Bonus Plan (the “Change in Control Plan”). The purpose of the Change in Control Plan was to provide an incentive to certain key employees upon a change in control, as defined in the plan document. Pursuant to the plan document, cash bonus awards are payable to participants as follows: (i) 50% upon a change in control, which was paid by the sellers on April 19, 2013, and (ii) the remaining 50% on the nine-month anniversary of a change in control, or sooner if the employee is terminated without cause. The remaining 50% totaled $23.1 million at the acquisition date and was pre-funded by the sellers into a Rabbi Trust account. The balance of this account totaled $19.6 million at September 30, 2013 and is reflected within restricted cash on our condensed consolidated balance sheet (see Note 4). We recognized $15.8 million in general and administrative expense during the LNR Stub Period with respect to this plan. | |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||
19. Accumulated Other Comprehensive Income | ||||||||||||||
The changes in accumulated other comprehensive income by component for the three months ended September 30, 2013 are as follows: | ||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||
Cash Flow Hedges | on Available-for- | Translation | ||||||||||||
Sale Securities | ||||||||||||||
Beginning balance | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||
Other comprehensive (loss) income before reclassifications | (594 | ) | 6,821 | 10,967 | 17,194 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 397 | (8,589 | ) | — | (8,192 | ) | ||||||||
Net current period other comprehensive income | (197 | ) | (1,768 | ) | 10,967 | 9,002 | ||||||||
Ending balance | $ | (988 | ) | $ | 66,351 | $ | 3,924 | $ | 69,287 | |||||
The changes in accumulated other comprehensive income by component for the nine months ended September 30, 2013 are as follows: | ||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||
Cash Flow Hedges | on Available-for- | Translation | ||||||||||||
Sale Securities | ||||||||||||||
Beginning balance | $ | (2,571 | ) | $ | 82,246 | $ | — | $ | 79,675 | |||||
Other comprehensive income before reclassifications | 332 | 7,360 | 3,924 | 11,616 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 1,251 | (23,255 | ) | — | (22,004 | ) | ||||||||
Net current period other comprehensive income | 1,583 | (15,895 | ) | 3,924 | (10,388 | ) | ||||||||
Ending balance | $ | (988 | ) | $ | 66,351 | $ | 3,924 | $ | 69,287 | |||||
The reclassifications out of accumulated other comprehensive income impacted the statement of operations for the three months ended September 30, 2013 as follows: | ||||||||||||||
Details about Accumulated Other Comprehensive Income | Amounts Reclassified | Affected Line Item in the Statement of | ||||||||||||
Components | from Accumulated | Operations | ||||||||||||
Other Comprehensive | ||||||||||||||
Income | ||||||||||||||
Losses on cash flow hedges | ||||||||||||||
Interest rate contracts | $ | 397 | Interest expense | |||||||||||
Total | 397 | |||||||||||||
Unrealized gains and losses on available for sale securities | ||||||||||||||
Net realized gain/(loss) on sale of investments | (8,537 | ) | Gain on sale of investments, net | |||||||||||
OTTI | (52 | ) | OTTI | |||||||||||
Total | (8,589 | ) | ||||||||||||
Total reclassifications for the period | $ | (8,192 | ) | |||||||||||
The reclassifications out of accumulated other comprehensive income impacted the statement of operations for the nine months ended September 30, 2013 as follows: | ||||||||||||||
Details about Accumulated Other Comprehensive Income | Amounts Reclassified | Affected Line Item in the Statement of | ||||||||||||
Components | from Accumulated | Operations | ||||||||||||
Other Comprehensive | ||||||||||||||
Income | ||||||||||||||
Losses on cash flow hedges | ||||||||||||||
Interest rate contracts | 1,251 | Interest expense | ||||||||||||
Total | 1,251 | |||||||||||||
Unrealized gains and losses on available for sale securities | ||||||||||||||
Net realized gain/(loss) on sale of investments | (22,802 | ) | Gain on sale of investments, net | |||||||||||
OTTI | (453 | ) | OTTI | |||||||||||
Total | (23,255 | ) | ||||||||||||
Total reclassifications for the period | $ | (22,004 | ) | |||||||||||
Net_Income_per_Share
Net Income per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Net Income per Share | ' | |||||||||||||
Net Income per Share | ' | |||||||||||||
20. Net Income per Share | ||||||||||||||
The following table provides a reconciliation of both net income and the number of common shares used in the computation of basic and diluted income per share. We use the two-class method in calculating both basic and diluted earnings per share as our unvested restricted stock units (refer to Note 17) are participating securities as defined in GAAP (amounts in thousands, except share and per share amounts): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 89,715 | $ | 50,212 | $ | 214,239 | $ | 144,861 | ||||||
Net income allocated to participating securities | (310 | ) | (275 | ) | (1,133 | ) | (980 | ) | ||||||
Numerator for basic and diluted net income per share | $ | 89,405 | $ | 49,937 | $ | 213,106 | $ | 143,881 | ||||||
Basic weighted average shares outstanding | 171,520,231 | 116,673,477 | 156,614,647 | 107,077,837 | ||||||||||
Diluted weighted average shares outstanding(1) | 172,394,882 | 117,381,559 | 157,650,258 | 107,958,047 | ||||||||||
Basic income per share | $ | 0.52 | $ | 0.43 | $ | 1.36 | 1.34 | |||||||
Diluted income per share | $ | 0.52 | $ | 0.43 | $ | 1.36 | 1.34 | |||||||
(1) The weighted average number of diluted shares outstanding includes the impact of (i) unvested restricted stock units and restricted stock awards totaling 712,361 and 478,947 as of September 30, 2013 and September 30, 2012, respectively, and (ii) 99,601 and 47,736 shares that were estimated to be issued in connection with the incentive fee payable to the Manager for the quarters ended September 30, 2013 and September 30, 2012, respectively. | ||||||||||||||
As of September 30, 2013, there were 38.8 million potential common shares contingently issuable upon the conversion of the Convertible Notes excluded from the calculation of diluted income per share because the effect would have been anti-dilutive. | ||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||||
21. Fair Value of Financial Instruments | |||||||||||||||||||||||
GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: | |||||||||||||||||||||||
Level I— Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | |||||||||||||||||||||||
Level II— Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. | |||||||||||||||||||||||
Level III— Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | |||||||||||||||||||||||
We have implemented valuation control processes to validate the fair value of our financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable. Refer to our Form 10-K for further discussion of our valuation control process. | |||||||||||||||||||||||
We determine the fair value of our assets and liabilities measured at fair value on a recurring and nonrecurring basis in accordance with the methodology described in our Form 10-K. For those assets and liabilities acquired in connection with our acquisition of LNR, and arising due to other material transactions, and measured at fair value on a recurring or nonrecurring basis, we have determined fair value as follows: | |||||||||||||||||||||||
Available-for-sale CMBS | |||||||||||||||||||||||
Available-for-sale CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar securities and the spreads used in the prior valuation. We obtain current market spread information where available and use this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these securities are classified in either Level II or Level III of the fair value hierarchy. CMBS may shift between Level II and Level III of the fair value hierarchy if the significant fair value inputs used to price the CMBS become or cease to be observable. | |||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||
The valuation of derivative contracts are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market based inputs, including interest rate curves, spot and market forward points and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. | |||||||||||||||||||||||
We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. | |||||||||||||||||||||||
Although we have determined that the majority of the inputs used to value our derivatives fall within Level II of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level III inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of September 30, 2013, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not as significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level II of the fair value hierarchy. | |||||||||||||||||||||||
As of January 1, 2013, the Company changed its valuation methodology for over-the-counter (“OTC”) derivatives to discount cash flows based on Overnight Index Swap (“OIS”) rates. Fully collateralized trades are discounted using OIS with no additional economic adjustments to arrive at fair value. Uncollateralized or partially-collateralized trades are also discounted at OIS, but include appropriate economic adjustments for funding costs (i.e., a LIBOR-OIS basis adjustment to approximate uncollateralized cost of funds) and credit risk. The Company is making the changes to better align its inputs, assumptions, and pricing methodologies with those used in its principal market by most dealers and major market participants. The changes in valuation methodology are applied prospectively as a change in accounting estimate and are immaterial to the Company’s financial statements. | |||||||||||||||||||||||
For credit index instruments acquired in connection with our acquisition of LNR, fair value is determined based on changes in the relevant indices from the date of initiation of the instrument to the reporting date, as these changes determine the amount of any future cash settlement between us and the counterparty. These indices are considered Level II inputs as they are directly observable. We have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our credit index instruments and have determined that any credit valuation adjustment would not be significant to the overall valuation as the counterparty to these contracts is a highly rated global financial institution. As a result, we have determined that credit index instruments are classified in Level II of the fair value hierarchy. | |||||||||||||||||||||||
Loans held-for-investment | |||||||||||||||||||||||
The fair value of our loans held-for-investment acquired in connection with our acquisition of LNR is based on the estimated fair value of the underlying real estate, which was determined through a combination of appraisals, discounted future cash flows and market capitalization rates. Since the most significant of these inputs are unobservable, we have determined that the fair value of these loans in their entirety should be classified in Level III of the fair value hierarchy. | |||||||||||||||||||||||
Loans held-for-sale | |||||||||||||||||||||||
We measure the fair value of our mortgage loans held-for-sale within LNR’s conduit platform using a discounted cash flow analysis unless observable market data (i.e. securitized pricing) is available. A discounted cash flow analysis requires management to make estimates regarding future interest rates and credit spreads. The most significant of these inputs relates to credit spreads and is unobservable. Thus, we have determined that the fair values of mortgage loans valued using a discounted cash flow analysis should be classified in Level III of the fair value hierarchy, while mortgage loans valued using securitized pricing should be classified in Level II of the fair value hierarchy. Mortgage loans classified in Level III are transferred to Level II if securitized pricing becomes available. | |||||||||||||||||||||||
Intangible asset — Domestic servicing rights | |||||||||||||||||||||||
The fair value of this intangible is determined using discounted cash flow modeling techniques which require management to make estimates regarding future net servicing cash flows, including forecasted loan defeasance, delinquency and anticipated maturity defaults which are calculated assuming a debt yield at which default occurs. Since the most significant of these inputs are unobservable, we have determined that the fair values of these intangibles in their entirety should be classified in Level III of the fair value hierarchy. | |||||||||||||||||||||||
Intangible assets — European servicing rights | |||||||||||||||||||||||
The fair value of this intangible was determined using discounted cash flow modeling techniques which require management to make estimates regarding future net servicing cash flows. Since the most significant of these inputs are unobservable, we have determined that the fair values of these intangibles in their entirety should be classified in Level III of the fair value hierarchy. | |||||||||||||||||||||||
Non-performing residential loans | |||||||||||||||||||||||
We estimate the fair value of our non-performing loans by applying an estimated current market discount to the estimated fair value of the underlying residential property collateral. | |||||||||||||||||||||||
Investment in unconsolidated entities | |||||||||||||||||||||||
The fair value of these investments acquired in connection with our acquisition of LNR was determined using discounted expected future cash flows from the ventures. Since these inputs are unobservable, we have determined that the fair values of these investments should be classified in Level III of the fair value hierarchy at the date of our acquisition of LNR. | |||||||||||||||||||||||
Liabilities of consolidated VIEs | |||||||||||||||||||||||
We utilize several inputs and factors in determining the fair value of VIE liabilities, including future cash flows, market transaction information, ratings, subordination levels, and current market spread and pricing information where available. Quoted market prices are used when this debt trades as an asset. Depending upon the significance of the fair value inputs used in determining these fair values these liabilities are classified in either Level II or Level III of the fair value hierarchy. VIE liabilities may shift between Level II and Level III of the fair value hierarchy if the significant fair value inputs used to price the VIE liabilities become observable or cease to be observable. | |||||||||||||||||||||||
Assets of consolidated VIEs | |||||||||||||||||||||||
The VIEs in which we invest are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets of the VIE, we maximize the use of observable inputs over unobservable inputs. We also acknowledge that our principal market for selling CMBS assets is the securitization market where the market participant is considered to be a CMBS trust or a CDO. This methodology results in the fair value of the assets of a static CMBS trust being equal to the fair value of its liabilities. The individual assets of a VIE are inherently incapable of precise measurement given their illiquid nature and the limitations on available information related to these assets. Because our methodology for valuing these assets does not value the individual assets of a VIE, but rather uses the value of the VIE liabilities as an indicator of the fair value of VIE assets as a whole, we have determined that our valuations of VIE assets in their entirety should be classified in Level III of the fair value hierarchy. | |||||||||||||||||||||||
Secured financing agreements | |||||||||||||||||||||||
The fair value of the secured financing agreements acquired in connection with our acquisition of LNR approximates the carrying value of these instruments due to their short-term nature. | |||||||||||||||||||||||
Convertible senior notes | |||||||||||||||||||||||
The fair value of our convertible senior notes is estimated by discounting the contractual cash flows at the interest rate we estimate such notes would bear if sold in the current market. | |||||||||||||||||||||||
Non-controlling interests | |||||||||||||||||||||||
The fair value of non-controlling interests acquired in connection with our acquisition of LNR are based on the estimated underlying fair value of equity associated with the non-wholly owned consolidated entity. This fair value is determined using a combination of the above techniques, depending upon the exact nature of the assets and liabilities of the entity. Since most of these inputs are unobservable, we have determined that the fair value of non-controlling interests at the date of our acquisition of LNR should be classified in Level III of the fair value hierarchy. | |||||||||||||||||||||||
The following table presents our financial instruments carried at fair value on a recurring basis in the consolidated balance sheet by their level in the fair value hierarchy as of September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 279,121 | $ | — | $ | — | $ | 279,121 | |||||||||||||||
RMBS | 316,261 | — | — | 316,261 | |||||||||||||||||||
CMBS | 198,146 | — | — | 198,146 | |||||||||||||||||||
Domestic servicing rights | 158,023 | — | — | 158,023 | |||||||||||||||||||
Equity securities | 15,016 | 15,016 | — | — | |||||||||||||||||||
Derivative assets | 9,513 | — | 9,513 | — | |||||||||||||||||||
VIE assets | 97,359,666 | — | — | 97,359,666 | |||||||||||||||||||
Total | $ | 98,335,746 | $ | 15,016 | $ | 9,513 | $ | 98,311,217 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 32,252 | $ | — | $ | 32,252 | $ | — | |||||||||||||||
VIE liabilities | 96,934,006 | — | 95,150,366 | 1,783,640 | |||||||||||||||||||
Total | $ | 96,966,258 | $ | — | $ | 95,182,618 | $ | 1,783,640 | |||||||||||||||
During the three and nine months ended September 30, 2013, we transferred $5.1 million and $117.4 million, respectively, of CMBS investments from Level II to Level III due to a decrease in the observable, relevant market activity. | |||||||||||||||||||||||
The changes in financial instruments classified as Level III are as follows for the three months ended September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
Loans Held- | RMBS | CMBS | Domestic | VIE assets | VIE | Total | |||||||||||||||||
for-sale | Servicing | liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
Beginning balance, June 30, 2013 | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value | 25,856 | — | 4,620 | (1,868 | ) | (4,283,956 | ) | 239,094 | (4,016,254 | ) | |||||||||||||
Impairment | — | (52 | ) | — | — | — | — | (52 | ) | ||||||||||||||
Included in other comprehensive income | — | 4,842 | 474 | — | — | — | 5,316 | ||||||||||||||||
Net accretion | — | 5,940 | — | — | — | — | 5,940 | ||||||||||||||||
Purchases / Originations | 457,468 | — | 23,871 | — | — | — | 481,339 | ||||||||||||||||
Sales | (375,204 | ) | — | — | — | — | — | (375,204 | ) | ||||||||||||||
Issuances | — | — | — | — | — | (8,760 | ) | (8,760 | ) | ||||||||||||||
Cash repayments / receipts | (175 | ) | (14,124 | ) | (163 | ) | — | — | (5,041 | ) | (19,503 | ) | |||||||||||
Transfers into Level III | — | — | 5,098 | — | — | (88,806 | ) | (83,708 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | — | — | 483,608 | 483,608 | ||||||||||||||||
Consolidations of VIEs | — | — | — | — | 4,359,149 | (69,075 | ) | 4,290,074 | |||||||||||||||
Deconsolidations of VIEs | — | — | (153 | ) | — | — | — | (153 | ) | ||||||||||||||
Ending balance, as of September 30, 2013 | $ | 279,121 | $ | 316,261 | $ | 198,146 | $ | 158,023 | $ | 97,359,666 | $ | (1,783,640 | ) | $ | 96,527,577 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at September 30, 2013 | $ | 6,011 | 7,057 | 5,428 | (1,868 | ) | (4,283,956 | ) | 239,094 | $ | (4,028,234 | ) | |||||||||||
The changes in financial instruments classified as Level III are as follows for the nine months ended September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
Loans Held- | RMBS | CMBS | Domestic | VIE assets | VIE liabilities | Total | |||||||||||||||||
for-sale | Servicing | ||||||||||||||||||||||
Rights | |||||||||||||||||||||||
Beginning balance, December 31, 2012 | $ | — | $ | 333,153 | $ | — | $ | — | $ | — | $ | — | $ | 333,153 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | — | ||||||||||||||||||||||
Change in fair value | 26,315 | 2,129 | 3,452 | 1,030 | (8,078,597 | ) | 333,542 | (7,712,129 | ) | ||||||||||||||
Impairment | — | (453 | ) | — | — | — | — | (453 | ) | ||||||||||||||
Included in other comprehensive income | — | 2,970 | 2,382 | — | — | — | 5,352 | ||||||||||||||||
Net accretion | — | 17,846 | — | — | — | — | 17,846 | ||||||||||||||||
Purchases / Originations | 848,137 | 20,090 | 23,910 | — | — | — | 892,137 | ||||||||||||||||
Sales | (851,539 | ) | (12,712 | ) | (10,072 | ) | — | — | — | (874,323 | ) | ||||||||||||
Issuances | — | — | — | — | — | (8,760 | ) | (8,760 | ) | ||||||||||||||
Cash repayments / receipts | (294 | ) | (46,762 | ) | (163 | ) | — | — | 74,694 | 27,475 | |||||||||||||
Transfers into Level III | — | — | 117,413 | — | — | (578,319 | ) | (460,906 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | — | — | 636,291 | 636,291 | ||||||||||||||||
Consolidations of VIEs | — | — | (1,208 | ) | — | 15,033,274 | (247,706 | ) | 14,784,360 | ||||||||||||||
Deconsolidations of VIEs | — | — | — | — | (584,804 | ) | 861 | (583,943 | ) | ||||||||||||||
Ending balance, as of September 30, 2013 | $ | 279,121 | $ | 316,261 | $ | 198,146 | $ | 158,023 | $ | 97,359,666 | $ | (1,783,640 | ) | $ | 96,527,577 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at September 30, 2013 | $ | 6,011 | 21,363 | 1,854 | 1,030 | (8,078,597 | ) | 333,542 | $ | (7,714,797 | ) | ||||||||||||
The following table presents our financial instruments carried at fair value on a recurring basis in the consolidated balance sheet by their level in the fair value hierarchy as of December 31, 2012 (amounts in thousands): | |||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
RMBS | $ | 333,153 | $ | — | $ | — | $ | 333,153 | |||||||||||||||
CMBS | 529,434 | — | 529,434 | — | |||||||||||||||||||
Total available-for-sale debt securities | 862,587 | — | 529,434 | 333,153 | |||||||||||||||||||
Available-for-sale equity securities: | |||||||||||||||||||||||
Real estate industry | 21,667 | 21,667 | — | — | |||||||||||||||||||
Total available-for-sale equity securities: | 21,667 | 21,667 | — | — | |||||||||||||||||||
Total investments | 884,254 | 21,667 | 529,434 | 333,153 | |||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||
Foreign exchange contracts | $ | 4,335 | $ | — | $ | 4,335 | $ | — | |||||||||||||||
Interest rate contracts | 4,892 | — | 4,892 | — | |||||||||||||||||||
Derivatives liabilities: | |||||||||||||||||||||||
Interest rate contracts | (4,343 | ) | — | (4,343 | ) | — | |||||||||||||||||
Foreign exchange contracts | (23,427 | ) | — | (23,427 | ) | — | |||||||||||||||||
Total derivatives | (18,543 | ) | — | (18,543 | ) | — | |||||||||||||||||
Total | $ | 865,711 | $ | 21,667 | $ | 510,891 | $ | 333,153 | |||||||||||||||
The changes in investments classified as Level III are as follows for the three months ended September 30, 2012 (amounts in thousands): | |||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
(Level III) | |||||||||||||||||||||||
Loans held-for-sale, at | MBS available- | Total | |||||||||||||||||||||
fair value | for-sale, at fair value | ||||||||||||||||||||||
Beginning balance, June 30, 2012 | $ | — | $ | 233,456 | $ | 233,456 | |||||||||||||||||
Purchases | — | 95,814 | 95,814 | ||||||||||||||||||||
Originations | — | — | — | ||||||||||||||||||||
Transfer out | — | — | — | ||||||||||||||||||||
Sales | — | (9,425 | ) | (9,425 | ) | ||||||||||||||||||
Maturities | — | — | — | ||||||||||||||||||||
Principal amortization | — | (18,542 | ) | (18,542 | ) | ||||||||||||||||||
Net decrease in assets | — | 67,847 | 67,847 | ||||||||||||||||||||
Gain (loss) amounts from Level III investments: | |||||||||||||||||||||||
Unrealized (loss) gain on assets | — | 30,575 | 30,575 | ||||||||||||||||||||
Realized gain on assets | — | 730 | 730 | ||||||||||||||||||||
Accretion of discount | — | 5,924 | 5,924 | ||||||||||||||||||||
OTTI | — | (637 | ) | (637 | ) | ||||||||||||||||||
Other | — | 5 | 5 | ||||||||||||||||||||
Net gain on assets | — | 36,597 | 36,597 | ||||||||||||||||||||
Ending balance, as of September 30, 2012 | $ | — | $ | 337,900 | $ | 337,900 | |||||||||||||||||
The changes in investments classified as Level III are as follows for the nine months ended September 30, 2012 (amounts in thousands): | |||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
(Level III) | |||||||||||||||||||||||
Loans held-for-sale, at | MBS available- | Total | |||||||||||||||||||||
fair value | for-sale, at fair value | ||||||||||||||||||||||
Beginning balance, January 1, 2012 | $ | 128,593 | $ | 341,734 | $ | 470,327 | |||||||||||||||||
Purchases | — | 203,433 | 203,433 | ||||||||||||||||||||
Originations | — | — | — | ||||||||||||||||||||
Transfer out | — | (176,786 | ) | (176,786 | ) | ||||||||||||||||||
Sales | (132,128 | ) | (26,049 | ) | (158,177 | ) | |||||||||||||||||
Maturities | — | — | — | ||||||||||||||||||||
Principal amortization | (122 | ) | (52,310 | ) | (52,432 | ) | |||||||||||||||||
Net decrease in assets | (132,250 | ) | (51,712 | ) | (183,962 | ) | |||||||||||||||||
Gain (loss) amounts from Level III investments: | |||||||||||||||||||||||
Unrealized (loss) gain on assets | (5,760 | ) | 34,371 | 28,611 | |||||||||||||||||||
Realized gain on assets | 9,417 | 3,643 | 13,060 | ||||||||||||||||||||
Accretion of discount | — | 12,548 | 12,548 | ||||||||||||||||||||
OTTI | — | (2,689 | ) | (2,689 | ) | ||||||||||||||||||
Other | — | 5 | 5 | ||||||||||||||||||||
Net gain on assets | 3,657 | 47,878 | 51,535 | ||||||||||||||||||||
Ending balance, as of September 30, 2012 | $ | — | $ | 337,900 | $ | 337,900 | |||||||||||||||||
The following table presents the fair value of our financial instruments, which are classified as Level III, including loans transferred as secured borrowings, not carried at fair value on the condensed consolidated balance sheet (amounts in thousands): | |||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value as of | Value as of | Value as of | Value as of | ||||||||||||||||||||
September 30, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2012 | ||||||||||||||||||||
Financial instruments not carried at fair value: | |||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 3,875,852 | $ | 3,974,875 | $ | 3,000,335 | $ | 3,097,089 | |||||||||||||||
Loans held-for-sale | 66,018 | 66,813 | — | — | |||||||||||||||||||
Securities, held-to-maturity | 37,370 | 37,600 | — | — | |||||||||||||||||||
European servicing rights | 29,709 | 31,448 | — | — | |||||||||||||||||||
Non-performing residential loans | 197,716 | 203,700 | 68,883 | 68,883 | |||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Secured financing agreements, loan transfer secured borrowings, and loan participation liability | $ | 1,493,726 | $ | 1,493,257 | $ | 1,393,705 | $ | 1,397,128 | |||||||||||||||
Convertible senior notes | 995,072 | 1,102,300 | — | — | |||||||||||||||||||
The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | |||||||||||||||||||||||
Quantitative Information about Level III Fair Value Measurements | |||||||||||||||||||||||
Carrying Value | Valuation Technique | Unobservable Input | Range (1) | ||||||||||||||||||||
at September 30, 2013 | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 279,121 | Discounted cash flow | Yield (b) | 4.65% - 5.61% | ||||||||||||||||||
Duration (c) | 5.0 to 10.0 years | ||||||||||||||||||||||
RMBS | 316,261 | Discounted cash flow | Constant prepayment rate (a) | (0.6)%-14.9% | |||||||||||||||||||
Constant default rate (b) | 2.0%-13.3% | ||||||||||||||||||||||
Loss severity (b) | 10%-83%(e) | ||||||||||||||||||||||
Delinquency Rate (c) | 5%-47% | ||||||||||||||||||||||
Servicer Advances (a) | 8%-100% | ||||||||||||||||||||||
Annual Coupon Deterioration (b) | 0.025%-0.18% | ||||||||||||||||||||||
Putback Amount per Projected | |||||||||||||||||||||||
Total Collateral Loss (d) | 0%-9% | ||||||||||||||||||||||
CMBS and CMBS, fair value option | 198,146 | Discounted cash flow | Yield (b) | 0% to 767.0% | |||||||||||||||||||
Duration (c) | 0 to 10.0 years | ||||||||||||||||||||||
Domestic servicing rights | 158,023 | Discounted cash flow | Debt yield (a) | 8.75% | |||||||||||||||||||
Discount rate (b) | 15% | ||||||||||||||||||||||
VIE assets | 97,359,666 | Discounted cash flow | Yield (b) | 0% to 791.8% | |||||||||||||||||||
Duration (c) | 0 to 23.5 years | ||||||||||||||||||||||
VIE liabilities | 1,783,640 | Discounted cash flow | Yield (b) | 0% to 791.8% | |||||||||||||||||||
Duration (c) | 0 to 23.5 years | ||||||||||||||||||||||
(1) The ranges of significant unobservable inputs are represented in percentages and years. | |||||||||||||||||||||||
Sensitivity of the Fair Value to Changes in the Unobservable Inputs | |||||||||||||||||||||||
(a) Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement. | |||||||||||||||||||||||
(b) Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement. | |||||||||||||||||||||||
(c) Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question. | |||||||||||||||||||||||
(d) Any delay in the Putback Recovery Date leads to a decrease in fair value, for the majority of securities in our RMBS portfolio. | |||||||||||||||||||||||
(e) 90% of the portfolio falls within a range of 40%-80%. | |||||||||||||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
22. Income Taxes | ||||||||||||||||||||||
As described in Note 1, we established several TRSs to house certain operations of the LNR segment. As a result, our income tax provision significantly increased during the LNR Stub Period. Our income tax provision consisted of the following for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Current | ||||||||||||||||||||||
Federal | $ | 11,465 | $ | 244 | 21,396 | $ | 682 | |||||||||||||||
Foreign | 1,011 | — | 1,581 | — | ||||||||||||||||||
State | 1,892 | 57 | 3,753 | 158 | ||||||||||||||||||
Total current | 14,368 | 301 | 26,730 | 840 | ||||||||||||||||||
Deferred | ||||||||||||||||||||||
Federal | 59 | — | 122 | — | ||||||||||||||||||
Foreign | (716 | ) | — | (1,181 | ) | — | ||||||||||||||||
State | 10 | — | 20 | — | ||||||||||||||||||
Total deferred | (647 | ) | — | (1,039 | ) | — | ||||||||||||||||
Total income tax provision | $ | 13,721 | $ | 301 | $ | 25,691 | $ | 840 | ||||||||||||||
Deferred income taxes reflect 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. Deferred tax assets and liabilities are presented net by tax jurisdiction and are reported in other assets and other liabilities, respectively. At September 30, 2013, our U.S. tax jurisdiction was in a net deferred tax asset position, while our European tax jurisdiction was in a net deferred tax liability position. The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | ||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||
U.S. | ||||||||||||||||||||||
Deferred tax asset, net | ||||||||||||||||||||||
Reserves and accruals | $ | 10,595 | $ | — | ||||||||||||||||||
Domestic intangible assets | (4,844 | ) | — | |||||||||||||||||||
Investment securities and loans | (165 | ) | — | |||||||||||||||||||
Investment in unconsolidated entities | (2,102 | ) | — | |||||||||||||||||||
Deferred income | 39 | — | ||||||||||||||||||||
Other U.S. temporary differences | (287 | ) | — | |||||||||||||||||||
3,236 | — | |||||||||||||||||||||
Europe | ||||||||||||||||||||||
Deferred tax liability, net | — | |||||||||||||||||||||
European servicing rights | (7,368 | ) | — | |||||||||||||||||||
Net operating and capital loss carryforwards | 9,935 | — | ||||||||||||||||||||
Valuation allowance | (9,935 | ) | — | |||||||||||||||||||
Other European temporary differences | 215 | — | ||||||||||||||||||||
(7,153 | ) | — | ||||||||||||||||||||
Net deferred tax assets (liabilities) | $ | (3,917 | ) | $ | — | |||||||||||||||||
Based on our assessment, it is more likely than not that the U.S. deferred tax assets will be realized through future taxable income. | ||||||||||||||||||||||
The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three and nine months ended September 30, 2013 and 2012 (dollar amounts in thousands): | ||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Federal statutory tax rate | $ | 36,933 | 35 | % | $ | 17,725 | 35 | % | $ | 85,489 | 35 | % | $ | 51,131 | 35 | % | ||||||
REIT and other non-taxable income | (24,886 | ) | (23.6 | )% | (17,481 | ) | (34.5 | )% | (62,818 | ) | (25.7 | )% | (50,449 | ) | (34.5 | )% | ||||||
State income taxes | 1,902 | 1.8 | % | 57 | 0.1 | % | 3,774 | 1.5 | % | 158 | 0.1 | % | ||||||||||
Federal benefit of state tax deduction | (666 | ) | (0.6 | )% | — | — | % | (1,321 | ) | (0.5 | )% | — | — | % | ||||||||
Other | 438 | 0.4 | % | — | — | % | 567 | 0.2 | % | — | — | % | ||||||||||
Effective tax rate | $ | 13,721 | 13 | % | $ | 301 | 0.6 | % | $ | 25,691 | 10.5 | % | $ | 840 | 0.6 | % | ||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
23. Commitments and Contingencies | |
As of September 30, 2013, we had future funding commitments on 34 loans totaling $608.7 million, primarily related to construction projects capital improvements, tenant improvements, and leasing commissions. Generally, funding commitments are subject to certain conditions that must be met, such as minimum debt service coverage ratios or executions of new leases before advances are made to the borrower. | |
In connection with our acquisition of LNR, we recognized an intangible unfavorable lease liability of $15.3 million related to an operating lease for LNR’s offices in Miami Beach, Florida. This liability is included in accounts payable, accrued expenses and other liabilities and is being amortized over the remaining eight years of the underlying lease term. Amortization of this liability is reflected in depreciation and amortization expense in our condensed consolidated statements of operations. The liability balance was $14.4 million as of September 30, 2013. | |
Management is not aware of any other contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our condensed consolidated financial statements. | |
Segment_Reporting
Segment Reporting | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Segment Reporting | ' | |||||||||||||||||||
Segment Reporting | ' | |||||||||||||||||||
24. Segment Reporting | ||||||||||||||||||||
In its operation of the business, management, including our chief operating decision maker, the company’s Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis prior to the impact of consolidating VIEs under ASC 810. The segment information within this note is reported on that basis. We have also provided the reconciliation adjustments to the GAAP amounts which appear in the LNR VIEs column. | ||||||||||||||||||||
Prior to the acquisition of LNR, we operated in one reportable business segment. As a result of the LNR acquisition and the expansion of our residential property business, we currently have three reportable business segments: | ||||||||||||||||||||
· Real estate investment lending — includes all business activities of Starwood Property Trust, excluding the residential and LNR businesses, which generally represents investments in real estate related loans and securities that are held for investment. | ||||||||||||||||||||
· Single family residential —includes the business activities associated with our investments in single-family residential properties and non-performing single-family residential mortgage loans. | ||||||||||||||||||||
· LNR — includes all business activities of the acquired LNR business excluding the consolidation of securitization VIEs. | ||||||||||||||||||||
Due to the structure of our business, certain costs incurred by one segment may benefit other segments. Costs that are identifiable are allocated to the segments that benefit so that one segment is not solely burdened by this cost. Allocated costs currently include interest expense related to our consolidated debt (excluding VIEs) and management fees payable to our Manager, both of which represent shared costs. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. As we work to integrate LNR into our legacy business, we expect future allocations to include costs relating to services performed by one segment on behalf of other segments. | ||||||||||||||||||||
We have recast certain prior period amounts within this note to conform to the way we internally manage and monitor segment performance in the current periods. The table below presents our results of operations for the three months ended September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 90,837 | $ | — | $ | 3,208 | $ | 94,045 | $ | — | $ | 94,045 | ||||||||
Interest income from investment securities | 12,301 | — | 18,792 | 31,093 | (13,289 | ) | 17,804 | |||||||||||||
Servicing fees | — | — | 59,566 | 59,566 | (23,057 | ) | 36,509 | |||||||||||||
Other revenues | 116 | 75 | 2,229 | 2,420 | (322 | ) | 2,098 | |||||||||||||
Rental income | — | 5,080 | — | 5,080 | — | 5,080 | ||||||||||||||
Total revenues | 103,254 | 5,155 | 83,795 | 192,204 | (36,668 | ) | 155,536 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 15,581 | 3,310 | 5,298 | 24,189 | 46 | 24,235 | ||||||||||||||
Interest expense | 29,866 | 2,287 | 4,590 | 36,743 | — | 36,743 | ||||||||||||||
General and administrative | 3,748 | 652 | 43,752 | 48,152 | 183 | 48,335 | ||||||||||||||
Business combination costs | 342 | — | — | 342 | — | 342 | ||||||||||||||
Acquisition and investment pursuit costs | 742 | 223 | 212 | 1,177 | — | 1,177 | ||||||||||||||
Residential segment, other operating costs | — | 6,023 | — | 6,023 | — | 6,023 | ||||||||||||||
Depreciation and amortization | — | 1,553 | 3,435 | 4,988 | — | 4,988 | ||||||||||||||
Loan loss allowance | 1,160 | — | — | 1,160 | — | 1,160 | ||||||||||||||
Other expense | 59 | — | 245 | 304 | — | 304 | ||||||||||||||
Total costs and expenses | 51,498 | 14,048 | 57,532 | 123,078 | 229 | 123,307 | ||||||||||||||
Income before other income (loss), income taxes and non-controlling interests | 51,756 | (8,893 | ) | 26,263 | 69,126 | (36,897 | ) | 32,229 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 47,963 | 47,963 | ||||||||||||||
Change in fair value of servicing rights | — | — | (3,939 | ) | (3,939 | ) | 2,072 | (1,867 | ) | |||||||||||
Change in fair value of investment securities, net | (157 | ) | — | 9,820 | 9,663 | (11,941 | ) | (2,278 | ) | |||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | — | 25,857 | 25,857 | — | 25,857 | ||||||||||||||
Earnings from unconsolidated entities | 896 | — | 4,459 | 5,355 | (778 | ) | 4,577 | |||||||||||||
Gain on sale of investments, net | 6,184 | 1,875 | — | 8,059 | — | 8,059 | ||||||||||||||
Loss on derivative financial instruments, net | (17,166 | ) | — | (5,285 | ) | (22,451 | ) | — | (22,451 | ) | ||||||||||
Foreign currency gain, net | 9,555 | — | 25 | 9,580 | — | 9,580 | ||||||||||||||
OTTI | (52 | ) | — | — | (52 | ) | — | (52 | ) | |||||||||||
Other income | — | 3,320 | 385 | 3,705 | — | 3,705 | ||||||||||||||
Total other income (loss) | (740 | ) | 5,195 | 31,322 | 35,777 | 37,316 | 73,093 | |||||||||||||
Income (loss) before income taxes | 51,016 | (3,698 | ) | 57,585 | 104,903 | 419 | 105,322 | |||||||||||||
Income tax provision | 619 | — | 13,102 | 13,721 | — | 13,721 | ||||||||||||||
Net income (loss) | 50,397 | (3,698 | ) | 44,483 | 91,182 | 419 | 91,601 | |||||||||||||
Net income attributable to non-controlling interests | 1,451 | 16 | — | 1,467 | 419 | 1,886 | ||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 48,946 | $ | (3,714 | ) | $ | 44,483 | $ | 89,715 | $ | — | $ | 89,715 | |||||||
The table below presents our results of operations for the three months ended September 30, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family Residential | Total | ||||||||||||||||||
Investment Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 56,261 | $ | — | $ | 56,261 | ||||||||||||||
Interest income from investment securities | 16,585 | — | 16,585 | |||||||||||||||||
Other revenues | 64 | 2 | 66 | |||||||||||||||||
Rental income | — | 59 | 59 | |||||||||||||||||
Total revenues | 72,910 | 61 | 72,971 | |||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 14,563 | 96 | 14,659 | |||||||||||||||||
Interest expense | 12,030 | — | 12,030 | |||||||||||||||||
General and administrative | 3,084 | — | 3,084 | |||||||||||||||||
Acquisition and investment pursuit costs | 465 | 157 | 622 | |||||||||||||||||
Residential segment, other operating costs | — | 327 | 327 | |||||||||||||||||
Depreciation and amortization | — | 78 | 78 | |||||||||||||||||
Total costs and expenses | 30,142 | 658 | 30,800 | |||||||||||||||||
Income before other income (loss), income taxes and non-controlling interests | 42,768 | (597 | ) | 42,171 | ||||||||||||||||
Other income: | ||||||||||||||||||||
Earnings from unconsolidated entities | 787 | — | 787 | |||||||||||||||||
Gain (loss) on sale of investments, net | 9,019 | (2 | ) | 9,017 | ||||||||||||||||
Loss on derivative financial instruments, net | (7,561 | ) | — | (7,561 | ) | |||||||||||||||
Foreign currency gain, net | 6,725 | — | 6,725 | |||||||||||||||||
OTTI | (676 | ) | — | (676 | ) | |||||||||||||||
Other income | 180 | — | 180 | |||||||||||||||||
Total other income (loss) | 8,474 | (2 | ) | 8,472 | ||||||||||||||||
Income (loss) before income taxes | 51,242 | (599 | ) | 50,643 | ||||||||||||||||
Income tax provision | 301 | — | 301 | |||||||||||||||||
Net income (loss) | 50,941 | (599 | ) | 50,342 | ||||||||||||||||
Net income attributable to non-controlling interests | 130 | — | 130 | |||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 50,811 | $ | (599 | ) | $ | 50,212 | |||||||||||||
The table below presents our results of operations for the nine months ended September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Family | |||||||||||||||||||
Lending | Residential | |||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 231,203 | $ | — | $ | 5,468 | $ | 236,671 | $ | — | $ | 236,671 | ||||||||
Interest income from investment securities | 42,179 | — | 30,550 | 72,729 | (20,108 | ) | 52,621 | |||||||||||||
Servicing fees | — | — | 112,426 | 112,426 | (36,782 | ) | 75,644 | |||||||||||||
Other revenues | 291 | 180 | 4,201 | 4,672 | (595 | ) | 4,077 | |||||||||||||
Rental income | — | 8,733 | — | 8,733 | — | 8,733 | ||||||||||||||
Total revenues | 273,673 | 8,913 | 152,645 | 435,231 | (57,485 | ) | 377,746 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 44,504 | 6,535 | 7,572 | 58,611 | 64 | 58,675 | ||||||||||||||
Interest expense | 66,794 | 3,587 | 7,297 | 77,678 | — | 77,678 | ||||||||||||||
General and administrative | 11,401 | 1,713 | 84,325 | 97,439 | 330 | 97,769 | ||||||||||||||
Business combination costs | 17,958 | — | — | 17,958 | — | 17,958 | ||||||||||||||
Acquisition and investment pursuit costs | 1,787 | 2,105 | 603 | 4,495 | — | 4,495 | ||||||||||||||
Residential segment, other operating costs | — | 10,622 | — | 10,622 | — | 10,622 | ||||||||||||||
Depreciation and amortization | — | 2,981 | 5,663 | 8,644 | — | 8,644 | ||||||||||||||
Loan loss allowance | 1,915 | — | — | 1,915 | — | 1,915 | ||||||||||||||
Other expense | 150 | — | 383 | 533 | — | 533 | ||||||||||||||
Total costs and expenses | 144,509 | 27,543 | 105,843 | 277,895 | 394 | 278,289 | ||||||||||||||
Income (loss) before other income, income taxes and non-controlling interests | 129,164 | (18,630 | ) | 46,802 | 157,336 | (57,879 | ) | 99,457 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 79,912 | 79,912 | ||||||||||||||
Change in fair value of servicing rights | — | — | 2,175 | 2,175 | (1,144 | ) | 1,031 | |||||||||||||
Change in fair value of investment securities, net | (83 | ) | — | 16,208 | 16,125 | (19,390 | ) | (3,265 | ) | |||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | — | 26,315 | 26,315 | — | 26,315 | ||||||||||||||
Earnings from unconsolidated entities | 3,488 | — | 8,401 | 11,889 | (974 | ) | 10,915 | |||||||||||||
Gain on sale of investments, net | 19,690 | 3,278 | — | 22,968 | — | 22,968 | ||||||||||||||
Gain (loss) on derivative financial instruments, net | (2,939 | ) | — | 2,874 | (65 | ) | — | (65 | ) | |||||||||||
Foreign currency gain (loss), net | 3,537 | — | (42 | ) | 3,495 | — | 3,495 | |||||||||||||
OTTI | (453 | ) | — | — | (453 | ) | — | (453 | ) | |||||||||||
Other income | — | 3,320 | 424 | 3,744 | — | 3,744 | ||||||||||||||
Total other income | 23,240 | 6,598 | 56,355 | 86,193 | 58,404 | 144,597 | ||||||||||||||
Income (loss) before income taxes | 152,404 | (12,032 | ) | 103,157 | 243,529 | 525 | 244,054 | |||||||||||||
Income tax provision | 1,645 | 12 | 24,034 | 25,691 | — | 25,691 | ||||||||||||||
Net income (loss) | 150,759 | (12,044 | ) | 79,123 | 217,838 | 525 | 218,363 | |||||||||||||
Net income attributable to non-controlling interests | 3,599 | — | — | 3,599 | 525 | 4,124 | ||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 147,160 | $ | (12,044 | ) | $ | 79,123 | $ | 214,239 | $ | — | $ | 214,239 | |||||||
The table below presents our results of operations for the nine months ended September 30, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family Residential | Total | ||||||||||||||||||
Investment Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 179,078 | $ | — | $ | 179,078 | ||||||||||||||
Interest income from investment securities | 40,404 | — | 40,404 | |||||||||||||||||
Other revenues | 178 | 2 | 180 | |||||||||||||||||
Rental income | 59 | 59 | ||||||||||||||||||
Total revenues | 219,660 | 61 | 219,721 | |||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 42,526 | 147 | 42,673 | |||||||||||||||||
Interest expense | 34,345 | — | 34,345 | |||||||||||||||||
General and administrative | 8,838 | — | 8,838 | |||||||||||||||||
Acquisition and investment pursuit costs | 2,032 | 705 | 2,737 | |||||||||||||||||
Residential segment, other operating costs | — | 327 | 327 | |||||||||||||||||
Depreciation and amortization | — | 78 | 78 | |||||||||||||||||
Total costs and expenses | 87,741 | 1,257 | 88,998 | |||||||||||||||||
Income (loss) before other income (loss), income taxes and non-controlling interests | 131,919 | (1,196 | ) | 130,723 | ||||||||||||||||
Other income: | ||||||||||||||||||||
Change in fair value of mortgage loans held-for-sale | (5,760 | ) | — | (5,760 | ) | |||||||||||||||
Earnings from unconsolidated entities | 2,739 | — | 2,739 | |||||||||||||||||
Gain (loss) on sale of investments, net | 19,149 | (2 | ) | 19,147 | ||||||||||||||||
Loss on derivative financial instruments, net | (9,784 | ) | — | (9,784 | ) | |||||||||||||||
Foreign currency gain, net | 11,222 | — | 11,222 | |||||||||||||||||
OTTI | (2,728 | ) | — | (2,728 | ) | |||||||||||||||
Other income | 530 | — | 530 | |||||||||||||||||
Total other income (loss) | 15,368 | (2 | ) | 15,366 | ||||||||||||||||
Income (loss) before income taxes | 147,287 | (1,198 | ) | 146,089 | ||||||||||||||||
Income tax provision | 840 | — | 840 | |||||||||||||||||
Net income (loss) | 146,447 | (1,198 | ) | 145,249 | ||||||||||||||||
Net income attributable to non-controlling interests | 388 | — | 388 | |||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 146,059 | $ | (1,198 | ) | $ | 144,861 | |||||||||||||
The table below presents our condensed consolidated balance sheet as of September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 282,553 | $ | 30,089 | $ | 223,915 | $ | 536,557 | $ | 277 | $ | 536,834 | ||||||||
Restricted cash | 38,052 | 1,836 | 42,818 | 82,706 | — | 82,706 | ||||||||||||||
Loans held-for-investment, net | 3,782,479 | — | 7,783 | 3,790,262 | — | 3,790,262 | ||||||||||||||
Loans held-for-sale | 66,018 | — | 279,121 | 345,139 | — | 345,139 | ||||||||||||||
Loans transferred as secured borrowings | 85,590 | — | — | 85,590 | — | 85,590 | ||||||||||||||
Investment securities | 481,082 | — | 410,071 | 891,153 | (324,360 | ) | 566,793 | |||||||||||||
Intangible assets — servicing rights | — | — | 276,295 | 276,295 | (88,563 | ) | 187,732 | |||||||||||||
Residential real estate, net | — | 548,022 | — | 548,022 | — | 548,022 | ||||||||||||||
Non-performing residential loans | — | 197,716 | — | 197,716 | — | 197,716 | ||||||||||||||
Investment in unconsolidated entities | 35,413 | — | 106,675 | 142,088 | (3,920 | ) | 138,168 | |||||||||||||
Goodwill | — | — | 107,099 | 107,099 | — | 107,099 | ||||||||||||||
Derivative assets | 6,582 | — | 2,931 | 9,513 | — | 9,513 | ||||||||||||||
Accrued interest receivable | 20,679 | — | 273 | 20,952 | — | 20,952 | ||||||||||||||
Other assets | 41,415 | 18,882 | 38,799 | 99,096 | (713 | ) | 98,383 | |||||||||||||
VIE assets, at fair value | — | — | — | — | 97,359,666 | 97,359,666 | ||||||||||||||
Total Assets | $ | 4,839,863 | $ | 796,545 | $ | 1,495,780 | $ | 7,132,188 | $ | 96,942,387 | $ | 104,074,575 | ||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 55,953 | $ | 10,489 | $ | 122,512 | $ | 188,954 | $ | 218 | $ | 189,172 | ||||||||
Related-party payable | 20,780 | — | 6,008 | 26,788 | — | 26,788 | ||||||||||||||
Dividends payable | 90,130 | — | — | 90,130 | — | 90,130 | ||||||||||||||
Derivative liabilities | 27,082 | — | 5,170 | 32,252 | — | 32,252 | ||||||||||||||
Secured financing agreements, net | 1,107,211 | — | 204,833 | 1,312,044 | — | 1,312,044 | ||||||||||||||
Convertible senior notes, net | 995,072 | — | — | 995,072 | — | 995,072 | ||||||||||||||
Loan transfer secured borrowings | 86,682 | — | — | 86,682 | — | 86,682 | ||||||||||||||
Loan participation liability | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 96,934,006 | 96,934,006 | ||||||||||||||
Total Liabilities | 2,477,910 | 10,489 | 338,523 | 2,826,922 | 96,934,224 | 99,761,146 | ||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||
Common stock | 1,959 | — | — | 1,959 | — | 1,959 | ||||||||||||||
Additional paid-in capital | 2,320,035 | 791,817 | 1,183,206 | 4,295,058 | — | 4,295,058 | ||||||||||||||
Treasury stock | (10,642 | ) | — | — | (10,642 | ) | — | (10,642 | ) | |||||||||||
Accumulated other comprehensive income | 64,955 | — | 4,332 | 69,287 | — | 69,287 | ||||||||||||||
Accumulated deficit | (47,800 | ) | (7,258 | ) | (30,281 | ) | (85,339 | ) | — | (85,339 | ) | |||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,328,507 | 784,559 | 1,157,257 | 4,270,323 | — | 4,270,323 | ||||||||||||||
Non-controlling interests in consolidated subsidiaries | 33,446 | 1,497 | — | 34,943 | 8,163 | 43,106 | ||||||||||||||
Total Equity | 2,361,953 | 786,056 | 1,157,257 | 4,305,266 | 8,163 | 4,313,429 | ||||||||||||||
Total Liabilities and Equity | $ | 4,839,863 | $ | 796,545 | $ | 1,495,780 | $ | 7,132,188 | $ | 96,942,387 | $ | 104,074,575 | ||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate Investment | Single Family Residential | Total | ||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 169,427 | $ | 8,244 | $ | 177,671 | ||||||||||||||
Restricted cash | 3,298 | 131 | 3,429 | |||||||||||||||||
Loans held-for-investment, net | 2,914,434 | — | 2,914,434 | |||||||||||||||||
Loans held-for-sale | — | — | — | |||||||||||||||||
Loans transferred as secured borrowings | 85,901 | — | 85,901 | |||||||||||||||||
Investment securities | 884,254 | — | 884,254 | |||||||||||||||||
Intangible assets — servicing rights | — | — | — | |||||||||||||||||
Residential real estate, net | — | 99,115 | 99,115 | |||||||||||||||||
Non-performing residential loans | — | 68,883 | 68,883 | |||||||||||||||||
Investment in unconsolidated entities | 32,318 | — | 32,318 | |||||||||||||||||
Goodwill | — | — | — | |||||||||||||||||
Derivative assets | 9,227 | — | 9,227 | |||||||||||||||||
Accrued interest receivable | 24,120 | — | 24,120 | |||||||||||||||||
Other assets | 19,299 | 5,722 | 25,021 | |||||||||||||||||
VIE assets, at fair value | — | — | — | |||||||||||||||||
Total Assets | $ | 4,142,278 | $ | 182,095 | $ | 4,324,373 | ||||||||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 28,987 | 1,107 | 30,094 | ||||||||||||||||
Related-party payable | 1,803 | — | 1,803 | |||||||||||||||||
Dividends payable | 73,796 | — | 73,796 | |||||||||||||||||
Derivative liabilities | 27,770 | — | 27,770 | |||||||||||||||||
Secured financing agreements, net | 1,305,812 | — | 1,305,812 | |||||||||||||||||
Convertible senior notes, net | — | — | — | |||||||||||||||||
Loan transfer secured borrowings | 87,893 | — | 87,893 | |||||||||||||||||
VIE liabilities, at fair value | — | — | — | |||||||||||||||||
Total Liabilities | 1,526,061 | 1,107 | 1,527,168 | |||||||||||||||||
Commitments and contingencies | — | — | — | |||||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | |||||||||||||||||
Common stock | 1,361 | — | 1,361 | |||||||||||||||||
Additional paid-in capital | 2,538,860 | 182,493 | 2,721,353 | |||||||||||||||||
Treasury stock | (10,642 | ) | — | (10,642 | ) | |||||||||||||||
Accumulated other comprehensive income | 79,675 | — | 79,675 | |||||||||||||||||
Accumulated deficit | (70,396 | ) | (2,005 | ) | (72,401 | ) | ||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,538,858 | 180,488 | 2,719,346 | |||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 77,359 | 500 | 77,859 | |||||||||||||||||
Total Equity | 2,616,217 | 180,988 | 2,797,205 | |||||||||||||||||
Total Liabilities and Equity | $ | 4,142,278 | $ | 182,095 | $ | 4,324,373 | ||||||||||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
25. Subsequent Events | |
Our significant events subsequent to September 30, 2013 were as follows: | |
Spin-off of Single Family Residential (“SFR”) Segment | |
On October 31, 2013, our Board of Directors unanimously approved a spin-off of the SFR segment to our stockholders. The newly-formed real estate investment trust, to be called Starwood Waypoint Residential Trust, will apply to list on the New York Stock Exchange and trade under the ticker symbol “SWAY.” Upon completion of the spin-off, SWAY will be one of the largest publicly traded investors, owners and operators of U.S. single-family rental homes and non-performing residential mortgage loans (“NPLs”) in the United States. | |
As part of the spin-off, the Company expects to contribute $100 million in cash to the anticipated unlevered balance sheet of SWAY to fund its growth and operations. In addition, at the time of the spin-off, SWAY also expects to have a fully committed financing line of credit with initial available borrowing capacity in excess of $400 million. Together, the available cash and credit facility will provide SWAY with significant financial capacity to support its growth and operating plans. | |
Starwood Property Trust’s stockholders of record at the close of business on January 24, 2014, subject to the completion of the merger of Waypoint with SWAY Management, will receive one common share of SWAY for every five shares of Starwood Property Trust common stock. Notice of the spin-off has been given to holders of Starwood Property Trust’s convertible senior notes. Starwood Property Trust expects that the spin-off will be treated for tax purposes as a distribution equal to the value of the distributed SWAY shares. The transaction is expected to close during the first quarter of 2014. | |
Investment Lending Activity | |
Loans originated within the Real Estate Investment Lending segment subsequent to September 30, 2013 included the following: | |
· Co-origination, with Starwood European Real Estate Finance, of a £288 million first mortgage loan collateralized by the Heron Tower in London. In conjunction with the loan closing, we obtained a LIBOR-based £210 million collateralized term financing facility, and retained a £60 million junior investment. | |
· Origination of a $106.0 million mezzanine loan secured by the Hyatt Regency in New Orleans. Approximately $84.0 million was funded at close. | |
· Origination of an $86.0 million first mortgage secured by 432 multifamily units and 23 ground floor retails units in San Francisco, CA. | |
· As of September 30, 2013, we owned a $217.6 million participation in a mezzanine loan that was secured by indirect equity interests in subsidiaries that own substantially all of the assets of a worldwide operator of hotels, resorts, and timeshare properties. In October 2013, the loan was repaid resulting in net proceeds to us of $63.6 million, after the repayment of a $140.2 million financing facility secured by this investment. | |
· Origination of a $250.0 million preferred equity investment on a 41 property portfolio of single tenant office and industrial buildings comprised of approximately 9.1 million square feet located across the United States. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Basis of Accounting and Principles of Consolidation | ' | |||||||
Basis of Accounting and Principles of Consolidation | ||||||||
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. Our results include those of LNR for the period from April 19, 2013 (LNR acquisition date) through September 30, 2013 (the “LNR Stub Period”). Intercompany amounts have been eliminated. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | ||||||||
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the operating results for the full year. | ||||||||
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that either (i) became significant as a result of our acquisition of LNR, or (ii) became significant due to an increase in the significance of the underlying business activity. | ||||||||
Entities not deemed to be variable interest entities (“VIEs”) are consolidated if we own a majority of the voting securities or interests or hold the general partnership interest, except in those instances in which the minority voting interest owner or limited partner effectively participates through substantive participative rights. Substantive participative rights include the ability to select, terminate and set compensation of the investee’s management, if applicable, and the ability to participate in capital and operating decisions of the investee, including budgets, in the ordinary course of business. | ||||||||
We invest in entities with varying structures, many of which do not have voting securities or interests, such as general partnerships, limited partnerships, and limited liability companies. In many of these structures, control of the entity rests with the general partners or managing members, while other members hold passive interests. The general partner or managing member may hold anywhere from a relatively small percentage of the total financial interests to a majority of the financial interests. For entities not deemed to be VIEs, where we serve as the sole general partner or managing member, we are considered to have the controlling financial interest and therefore the entity is consolidated, regardless of our financial interest percentage, unless there are other limited partners or investing members that effectively participate through substantive participative rights. In those circumstances where we, as majority controlling interest owner, cannot cause the entity to take actions that are significant in the ordinary course of business, because such actions could be vetoed by the minority controlling interest owner, we do not consolidate the entity. | ||||||||
As noted above, the most common type of VIE is an SPE. SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. SPEs are an important part of the financial markets, including the mortgage- and asset-backed securities and commercial paper markets, as they provide market liquidity by facilitating investors’ access to specific portfolios of assets and risks. SPEs may be organized as trusts, partnerships or corporations and are typically established for a single, discrete purpose. SPEs are not typically operating entities and usually have a limited life and no employees. The basic SPE structure involves a company selling assets to the SPE; the SPE funds the purchase of those assets by issuing securities to investors. The legal documents that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s assets by creditors of other entities, including the creditors of the seller of the assets. | ||||||||
When we consolidate entities other than SPEs, the ownership interests of any minority parties are reflected as non-controlling interests. A non-controlling interest in a consolidated subsidiary is defined as “the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent”. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheets. In addition, the presentation of net income attributes earnings to controlling and non-controlling interests. | ||||||||
When we consolidate SPEs, beneficial interests payable to third parties are reflected as liabilities when the interests are legally issued in the form of debt. Investments in entities which are not consolidated are accounted for by the equity method or by the cost method if either our investment is considered to be minor or we lack significant influence over the investee. | ||||||||
Variable Interest Entities | ' | |||||||
Variable Interest Entities | ||||||||
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | ||||||||
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our 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 we have 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, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply 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 us. | ||||||||
Our purchased investment securities include CMBS which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | ||||||||
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset are also eliminated in consolidation. | ||||||||
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | ||||||||
We have elected the fair value option in measuring the assets and liabilities of any VIEs we consolidate. Fluctuations in the fair values of the VIE assets and liabilities, along with trust interest income and trust interest and administrative expenses, are presented net in income of consolidated VIEs in our condensed consolidated statements of operations. | ||||||||
Segment Reporting | ' | |||||||
Segment Reporting | ||||||||
Prior to the acquisition of LNR, we focused primarily on originating and acquiring real estate-related debt investments and operated in one reportable segment. As a result of the acquisition of LNR, as well as the increased significance of our single family home business, we now have the following three reportable segments: real estate investment lending, single family residential, and LNR. Refer to Note 24 for further discussion of our reportable segments. | ||||||||
Business Combinations | ' | |||||||
Business Combinations | ||||||||
Under FASB ASC Topic 805, Business Combinations, the acquirer in a business combination must recognize, with certain exceptions, the fair values of assets acquired, liabilities assumed, and non-controlling interests when the acquisition constitutes a change in control of the acquired entity. As goodwill is calculated as a residual, all goodwill of the acquired business, not just the acquirer’s share, is recognized under this “full goodwill” approach. | ||||||||
We applied the provisions of ASC 805 in accounting for our acquisition of LNR. In doing so, we recorded provisional amounts for certain items as of the date of the acquisition, including the fair value of certain assets and liabilities. During the measurement period, a period which shall not exceed one year, we retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of such date that, if known, would have affected the measurement of the amounts recognized. See further discussion in Note 3. | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Goodwill and Intangible Assets | ||||||||
Goodwill is not amortized, but rather tested for impairment annually or more frequently if events or changes in circumstances indicate potential impairment. Goodwill at September 30, 2013 represents the excess of the consideration paid in connection with the acquisition of LNR over the fair value of net assets acquired. | ||||||||
In testing goodwill for impairment, we follow ASC Topic 350, Intangibles — Goodwill and Other, which permits a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill. If the qualitative assessment determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill, then no impairment is determined to exist for the reporting unit. However, if the qualitative assessment determines that it is more likely than not that the fair value of the reporting unit is less than its carrying value including goodwill, we compare the fair value of that reporting unit with its carrying value, including goodwill. If the carrying value of a reporting unit exceeds its fair value, goodwill is considered impaired with the impairment loss equal to the amount by which the carrying value of the goodwill exceeds the implied fair value of that goodwill. | ||||||||
Our identifiable intangible assets include special servicing rights for both our domestic and European servicing operations. The fair value measurement method has been elected for measurement of our domestic servicing asset. Election of this method is necessary to conform to our election of the fair value option for measuring the assets and liabilities of the VIEs consolidated pursuant to ASC 810. The amortization method has been elected for our European servicing asset. This asset is amortized in proportion to and over the period of estimated net servicing income, and is tested for potential impairment whenever events or changes in circumstances suggest that its carrying value may not be recoverable. | ||||||||
For purposes of testing our European servicing intangible for impairment, we first determine whether facts and circumstances exist that would suggest the carrying value of the intangible is not recoverable. If so, we then compare the fair value of the servicing intangible with its carrying value. The estimated fair value of the intangible is determined using discounted cash flow modeling techniques which require management to make estimates regarding future net servicing cash flows, taking into consideration historical and forecasted loan defeasance rates, delinquency rates and anticipated maturity defaults. If the carrying value of the intangible exceeds its fair value, the intangible is considered impaired and an impairment loss is recognized for the amount by which carrying value exceeds fair value. | ||||||||
Loans Held-For-Sale | ' | |||||||
Loans Held-For-Sale | ||||||||
Our loans that we intend to sell or liquidate in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value, unless we have elected to apply the fair value option at origination or purchase. Refer to Note 21 for further disclosure regarding loan transfer activity. The conduit business we acquired from LNR originates fixed rate commercial mortgage loans for future sale to multi-seller securitization trusts. We periodically enter into derivative financial instruments to hedge unpredictable changes in fair value of this loan portfolio, including changes resulting from both interest rates and credit quality. Because these derivatives are not designated, changes in their fair value are recorded in earnings. In order to best reflect the results of the hedged loan portfolio in earnings, we have elected the fair value option for these loans. As a result, changes in the fair value of the loans are also recorded in earnings. | ||||||||
Fair Value Option | ' | |||||||
Fair Value Option | ||||||||
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | ||||||||
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by LNR’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by LNR’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | ||||||||
Fair Value Measurements | ' | |||||||
Fair Value Measurements | ||||||||
We measure our mortgage-backed securities, derivative assets and liabilities, domestic servicing rights intangible asset and any assets or liabilities where we have elected the fair value option at fair value. When actively quoted observable prices are not available, we either use implied pricing from similar assets and liabilities or valuation models based on net present values of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | ||||||||
As discussed above, we measure the assets and liabilities of consolidated VIEs at fair value pursuant to our election of the fair value option. The VIEs in which we invest are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets and liabilities of the VIE, we maximize the use of observable inputs over unobservable inputs. We also acknowledge that our principal market for selling CMBS assets is the securitization market where the market participant is considered to be a CMBS trust or a collateralized debt obligation (“CDO”). This methodology results in the fair value of the assets of a static CMBS trust being equal to the fair value of its liabilities. | ||||||||
Residential Real Estate & Non-Performing Residential Loans | ' | |||||||
Residential Real Estate & Non-Performing Residential Loans | ||||||||
Residential Real Estate | ||||||||
Acquired residential real estate is evaluated to determine whether it meets the definition of a business or of an asset under GAAP. For asset acquisitions, we capitalize (1) pre-acquisition costs to the extent such costs would have been capitalized had we owned the asset when the cost was incurred, and (2) closing and other direct acquisition costs. We then allocate the total asset acquisitions cost among land, building and furniture and fixtures, based on their relative fair values, generally utilizing the relative allocation that was contained in the property tax assessment of the same or a similar property, adjusted as deemed necessary. | ||||||||
If, at acquisition, a property needs to be renovated before it is ready for its intended use, we commence the necessary development activities. During this development period, we capitalize all direct and indirect costs incurred in renovating the property. Once a property is ready for its intended use, expenditures for ordinary maintenance and repairs thereafter are expensed as incurred, and we capitalize expenditures that improve or extend the life of a home and for furniture, fixtures and equipment. | ||||||||
We begin depreciating properties to be held and used when they are ready for their intended use. We compute depreciation using the straight-line method over the estimated useful lives of the respective assets. We depreciate buildings over 30 years, and we depreciate furniture and fixtures over five years. Land is not depreciated. | ||||||||
Properties are classified as held for sale when they meet the applicable GAAP criteria, including that the property is being listed for sale and that it is ready to be sold in its current condition. Held for sale properties are reported at the lower of their carrying amount or estimated fair value less costs to sell. | ||||||||
We evaluate our properties to be held and used for indications of impairment at least quarterly, typically in connection with preparing the quarter-end financial statements. We assess impairment at the lowest level for which cash flows are available, which is on a per-property basis. If an impairment indicator exists, we compare the property’s expected future undiscounted cash flows to the carrying amount of the property. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the property, we record an impairment charge equal to the excess of the property’s carrying amount over the estimated fair value. In estimating fair value, we primarily consider the local broker price opinion, but also consider any other comparable home sales or other market data, as necessary. | ||||||||
Non-Performing Residential Loans | ||||||||
We have purchased pools of distressed and non-performing residential mortgage loans, which we generally seek to (1) convert into homes through the foreclosure or other resolution process that can then either be contributed to our rental portfolio or sold or, to a lesser extent, (2) modify and hold or resell at higher prices if circumstances warrant. In situations where property foreclosure is subject to an auction process and a third party submits the winning bid, we recognize the resulting gain as a gain on the sale of loans held for investment. | ||||||||
Our distressed and non-performing residential mortgage loans are on nonaccrual status at the time of purchase as it is probable that principal or interest is not fully collectible. Any payments received thereafter are applied as a reduction to the remaining principal balance as long as concern exists as to the ultimate collection of amounts contractually due. | ||||||||
We evaluate our non-performing residential mortgage loans for impairment at least quarterly, typically in connection with preparing the quarter-end financial statements. As our loans held for investment were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. As described in our real estate accounting policy above, we primarily utilize the local broker price opinion, but also consider any other comparable home sales or other market data as considered necessary, in estimating a property’s fair value. If the carrying amount of a loan exceeds the estimated fair value of the underlying collateral, we will record an impairment loss for the difference between the estimated fair value of the property collateral and the carrying amount of the loan. Through September 30, 2013, no impairments have been recorded on any of our loans. | ||||||||
Revenue Recognition | ' | |||||||
Revenue Recognition | ||||||||
Interest Income | ||||||||
Interest income on performing loans and financial instruments is accrued based on the outstanding principal amount and contractual terms of the instrument. Discounts or premiums associated with the purchase of non-performing loans and investment securities are amortized or accreted into interest income as a yield adjustment on the effective interest method, based on expected cash flows through the expected maturity date of the investment. On at least a quarterly basis, we review and, if appropriate, make adjustments to our cash flow projections. For loans and CMBS in which we expect to collect all contractual amounts due, we do not adjust the projected cash flows to reflect anticipated credit losses. | ||||||||
Conversely, for the majority of our RMBS, which have been purchased at a discount to par value, we do not expect to collect all amounts contractually due at the time we acquired the securities. Accordingly, we expect that a portion of the purchase discount will not be recognized as interest income, and is instead viewed as a non-accretable yield. The amount considered as non-accretable yield may change over time based on the actual performance of these securities, their underlying collateral, actual and projected cash flow from such collateral, economic conditions and other factors. If the performance of a credit deteriorated security is more favorable than forecasted, we will generally accrete more credit discount into interest income than initially or previously expected. These adjustments are made prospectively beginning in the period subsequent to the determination that a favorable change in performance is projected. Conversely, if the performance of a credit deteriorated security is less favorable than forecasted, an other-than-temporary impairment may be taken, and the amount of discount accreted into income will generally be less than previously expected. | ||||||||
For loans where we have not elected the fair value option, origination fees and direct loan origination costs are also recognized in interest income over the loan term as a yield adjustment using the effective interest method. When we elected the fair value option, origination fees and direct loan costs are recorded directly in income and are not deferred. | ||||||||
Upon the sale of loans or securities which are not accounted for pursuant to the fair value option, the excess (or deficiency) of net proceeds over the net carrying value of such loans or securities is recognized as a realized gain (or loss). | ||||||||
Servicing Fees | ||||||||
We typically seek to be the special servicer on CMBS transactions in which we invest. When we are appointed to serve in this capacity, we earn special servicing fees from the related activities performed, which consist primarily of overseeing the workout of under-performing and non-performing loans underlying the CMBS transactions. These fees are recognized in income in the period in which the services are performed and the revenue recognition criteria have been met. | ||||||||
Transfers | ||||||||
Transfers of investment securities, mortgage loans, and investments in unconsolidated entities are accounted for as sales pursuant to the accounting guidance governing transfers and servicing of financial assets, providing that we have surrendered control over the assets and to the extent that we received consideration other than beneficial interests in the assets. The cost of assets sold is based on the specific identification method. | ||||||||
We recognize sales of residential real estate when the sale has closed, title has passed, adequate initial and continuing investment by the buyer is received, possession and other attributes of ownership have been transferred to the buyer, and we are not obligated to perform significant additional activities after closing. All these conditions are typically met at or shortly after closing. | ||||||||
Rental Income | ||||||||
Rental income attributable to residential leases is recorded when due from tenants, which approximates the amount that would result from straight-lining rents over the lease term. The initial term of our residential leases is generally one year, with renewals upon consent of both parties on an annual or monthly basis. | ||||||||
Investment in Unconsolidated Entities | ' | |||||||
Investment in Unconsolidated Entities | ||||||||
We own non-controlling equity interests in various privately-held partnerships and limited liability companies. Unless we elect the fair value option under ASC 825, we use the cost method to account for investments in which we own less than 20% and do not have significant influence over the underlying investees. We use the equity method to account for all other non-controlling interests in partnerships and limited liability companies. Cost method investments are initially recorded at cost and income is generally recorded when distributions are received. Equity method investments are initially recorded at cost and subsequently adjusted for our share of income or loss, as well as contributions made or distributions received. | ||||||||
Investments in unconsolidated entities are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. Impairment analyses are based on current plans, intended holding periods and available information at the time the analyses are prepared. | ||||||||
For investments in publicly traded companies where we have virtually no influence over the activities of these companies and minimal ownership percentages, such investments are classified as available-for-sale and reported at fair value in the balance sheet, with unrealized gains and losses reported as a component of other comprehensive income (loss). For investments in publicly traded securities where we have the ability to exercise significant influence, but not control, over underlying investees, we have elected the fair value option and report the assets at fair value on the balance sheet with unrealized gains and losses reported in earnings. Dividends on our available-for-sale equity securities are recorded in the statement of operations on the record date. | ||||||||
Securitization/Sale and Financing Arrangements | ' | |||||||
Securitization/Sale and Financing Arrangements | ||||||||
We periodically sell our financial assets, such as commercial mortgage loans, CMBS and other assets. In connection with these transactions, we may retain or acquire senior or subordinated interests in the related assets. Gains and losses on such transactions are recognized using the guidance in ASC Topic 860, Transfers and Servicing, which is based on a financial components approach that focuses on control. Under this approach, after a transfer of financial assets that meets the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transferred control—an entity recognizes the financial assets it retains and any liabilities it has incurred, derecognizes the financial assets it has sold, and derecognizes liabilities when extinguished. We determine the gain or loss on sale of the assets by allocating the carrying value of the sold asset between the sold asset and the interests retained based on their relative fair values, as applicable. The gain or loss on sale is the difference between the cash proceeds from the sale and the amount allocated to the sold asset. If the sold asset is being accounted for pursuant to the fair value option, there is no gain or loss. | ||||||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
The Company has elected to be qualified and taxed as a REIT under the Code. The Company is subject to federal income taxation at corporate rates on its REIT taxable income, however, the Company is allowed a deduction for the amount of dividends paid to its shareholders, thereby subjecting the distributed net income of the Company to taxation at the shareholder level only. In addition, the Company is allowed several other deductions in computing its REIT taxable income, including non-cash items such as depreciation expense and certain specific reserve amounts that the Company deems to be uncollectable. The Company intends to operate in a manner consistent with and to elect to be treated as a REIT for tax purposes. | ||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. | ||||||||
We recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained upon examination of the relevant taxing authority, based on the technical merits of the tax position. A tax position is measured at the largest amount of benefit that will more likely than not be realized upon settlement. A liability is established for the differences between positions taken in a tax return and amounts recognized in the financial statements and no portion of the benefit is recognized in our condensed consolidated statements of operations. We report interest and penalties related to income tax matters as a component of income tax expense. | ||||||||
Foreign Currency Transactions | ' | |||||||
Foreign Currency Transactions | ||||||||
Our assets and liabilities denominated in foreign currencies are translated into U.S. dollars using foreign currency exchange rates at the end of the reporting period. Income and expenses are translated at the average exchange rates for each reporting period. The effects of translating the assets, liabilities and income of our foreign investments held by entities with a U.S. dollar functional currency are included in foreign currency gain (loss) in the condensed consolidated statements of operations or other comprehensive income for securities available for sale for which the fair value option has not been elected. The effects of translating the assets, liabilities and income of our foreign investments held by entities with functional currencies other than the U.S. dollar are included in other comprehensive income. Realized foreign currency gains and losses and changes in the value of foreign currency denominated monetary assets and liabilities are included in the determination of net income and are reported as foreign currency gain (loss) in our condensed consolidated statements of operations. | ||||||||
Earnings Per Share | ' | |||||||
Earnings Per Share | ||||||||
We calculate basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average of shares of common stock outstanding for that period after consideration of the earnings allocated to our restricted stock units, which are participating securities as defined in GAAP. Diluted earnings per share reflects the potential dilution that that could occur from shares issuable in connection with the incentive fee paid to our Manager under the management agreement and conversion of the convertible senior notes into shares of common stock, except when doing so would be anti-dilutive. | ||||||||
Underwriting Commissions and Offering Costs | ' | |||||||
Underwriting Commissions and Offering Costs | ||||||||
Underwriting and offering costs related to our equity offering activities, which consist primarily of our equity offerings in September 2013, April 2013 and October 2012 as well as our at-the-market offering program, were $0.3 million and $1.0 million for the three and nine months ended September 30, 2013, respectively, and are reflected as a reduction of additional paid-in capital in the condensed consolidated statements of equity. Underwriting and offering costs were $2.3 million and $2.3 million for the three and nine months ended September 30, 2012, respectively. | ||||||||
Use of Estimates | ' | |||||||
Use of Estimates | ||||||||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our investments, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial instruments that are estimated using a discounted cash flows method are significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | ||||||||
Reclassification | ' | |||||||
Reclassification | ||||||||
As a result of the LNR acquisition as well as the increased significance of our single family home segment as discussed above (also refer to Note 24), certain items in our December 31, 2012 consolidated balance sheet and condensed consolidated statements of operations for the three and nine months ended September 30, 2012 as well as in our condensed consolidated statements of cash flows for the nine months ended September 30, 2012, have been reclassified to conform to the current presentation. The tables below describe the reclassifications to these respective financial statements: | ||||||||
December 31, 2012 Consolidated Balance Sheet (amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Mortgage-backed securities, available-for-sale, at fair value | 862,587 | (862,587 | )(a) | — | ||||
Investment securities | — | 862,587 | (a) | |||||
21,667 | (b) | 884,254 | ||||||
Other investments | 221,983 | (21,667 | )(b) | |||||
(167,998 | )(c) | |||||||
(32,318 | )(d) | — | ||||||
Residential real estate, net | — | 99,115 | (c) | 99,115 | ||||
Non-performing residential loans | — | 68,883 | (c) | 68,883 | ||||
Investment in unconsolidated entities | — | 32,318 | (d) | 32,318 | ||||
Accounts payable, accrued expenses and other liabilities | — | 21,204 | (e) | |||||
8,890 | (e) | 30,094 | ||||||
Accounts payable and accrued expenses | 8,890 | (8,890 | )(e) | — | ||||
Other liabilities | 21,204 | (21,204 | )(e) | — | ||||
(a) Mortgage-backed securities, available-for-sale, at fair value are now included in “Investment securities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(b) There were $21.7 million of marketable equity securities reported within “Other investments” as of December 31, 2012, which are now classified as “Investment securities,” a new caption in the September 30, 2013 balance sheet. | ||||||||
(c) Our investments in residential real estate and non-performing residential loans have increased significantly during 2013, and are now separately reported in the September 30, 2013 balance sheet. Such amounts were classified within “Other investments” as of December 31, 2012. | ||||||||
(d) Represents investments in unconsolidated entities that were classified within “Other investments” as of December 31, 2012. Such investments are now reported within “Investment in unconsolidated entities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(e) We have combined accounts payable, accrued expenses and other liabilities into one caption in the September 30, 2013 balance sheet. Other liabilities were presented separately in the December 31, 2012 balance sheet. | ||||||||
Given the nature and significance of LNR’s operations, we removed the “Net interest margin,” subtotal from our condensed consolidated statement of operations, with interest income now included in a new “total revenues” subtotal, and interest expense now included within the new “Total costs and expenses” subtotal. The tables below describe the reclassification adjustments made to specific financial statement captions. | ||||||||
Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 180 | (a) | 180 | ||||
Interest income from cash balances | 180 | (180 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 2,739 | (b) | 2,739 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 2,923 | (2,393 | )(b) | 530 | ||||
Net gains (losses) on currency hedges | (10,392 | ) | 10,392 | (c) | — | |||
Net gains (losses) on interest rate hedges | 608 | (608 | )(c) | — | ||||
Loss on derivative financial instruments | — | (9,784 | )(c) | (9,784 | ) | |||
Net realized foreign currency gains (losses) | 8,515 | (8,515 | )(d) | — | ||||
Unrealized foreign currency remeasurement gains | 2,707 | (2,707 | )(d) | — | ||||
Foreign currency gain, net | — | 11,222 | (d) | 11,222 | ||||
Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 66 | (a) | 66 | ||||
Interest income from cash balances | 66 | (66 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 787 | (b) | 787 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 621 | (441 | )(b) | 180 | ||||
Net gains (losses) on currency hedges | (7,510 | ) | 7,510 | (c) | — | |||
Net gains (losses) on interest rate hedges | (51 | ) | 51 | (c) | — | |||
Loss on derivative financial instruments | — | (7,561 | )(c) | (7,561 | ) | |||
Net realized foreign currency gains (losses) | (337 | ) | 337 | (d) | — | |||
Unrealized foreign currency remeasurement gains (losses) | 7,062 | (7,062 | )(d) | — | ||||
Foreign currency gain, net | — | 6,725 | (d) | 6,725 | ||||
(a) Interest income from cash balances has been reclassified into “Other revenues,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(b) Earnings from unconsolidated entities and various other items are now separate captions in the income statement for the three and nine months ended September 30, 2013. We previously classified such items for the three and nine months ended September 30, 2012, within “Other income.” | ||||||||
(c) The amounts in “Net gains (losses) on currency hedges” and “Net gains (losses) on interest rate hedges” have been reclassified into “Loss on derivative financial instruments,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(d) The amounts in “Net realized foreign currency gains (losses) and “Unrealized foreign currency remeasurement gains (losses)” have been reclassified into “Foreign currency gain, net,” which is a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Gain on sale of available-for-sale securities | (12,097 | ) | 12,097 | (a) | — | |||
Gain on sale of loans | (7,177 | ) | 7,177 | (a) | — | |||
Gain on sale of investments | — | (19,274 | )(a) | (19,274 | ) | |||
Unrealized gains (losses) on interest rate hedges | (9,991 | ) | 9,991 | (b) | — | |||
Unrealized losses on currency hedges | 13,319 | (13,319 | )(b) | — | ||||
Change in fair value of derivatives | — | 3,328 | (b) | 3,328 | ||||
Gain on foreign currency remeasurement | (8,809 | ) | 8,809 | (c) | — | |||
Unrealized foreign currency remeasurement losses (gains) | (2,707 | ) | 2,707 | (c) | — | |||
Foreign currency gain, net | — | (11,516 | )(c) | (11,516 | ) | |||
Purchased interest on investments | (638 | ) | 638 | (d) | — | |||
Origination and purchase of loans held-for-investment | (942,692 | ) | (638 | )(d) | (943,330 | ) | ||
Loan maturities | 460,789 | (460,789 | )(e) | — | ||||
Loan investment principal repayments | 33,518 | (33,518 | )(e) | — | ||||
Proceeds from principal collections on loans | — | 494,307 | (e) | 494,307 | ||||
(a) We have combined “Gain on sale of available-for-sale securities” and “Gain on sale of loans” into “Gain on sale of investments,” a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(b) We have combined “Unrealized gains (losses) on interest rate hedges” and “Unrealized (gains) losses on currency hedges” into “Change in fair value of derivatives,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(c) We have combined “Gain on foreign currency remeasurement” and “Unrealized foreign currency remeasurement losses (gains)” into “Foreign currency gain, net,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(d) We have combined “Purchased interest on investments” into “Origination and purchase of loans held-for-investment.” | ||||||||
(e) We have combined “Loan maturities” and “Loan investment principal repayments” into “Proceeds from principal collections on loans,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Schedule of reclassification adjustments in balance sheet | ' | |||||||
December 31, 2012 Consolidated Balance Sheet (amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Mortgage-backed securities, available-for-sale, at fair value | 862,587 | (862,587 | )(a) | — | ||||
Investment securities | — | 862,587 | (a) | |||||
21,667 | (b) | 884,254 | ||||||
Other investments | 221,983 | (21,667 | )(b) | |||||
(167,998 | )(c) | |||||||
(32,318 | )(d) | — | ||||||
Residential real estate, net | — | 99,115 | (c) | 99,115 | ||||
Non-performing residential loans | — | 68,883 | (c) | 68,883 | ||||
Investment in unconsolidated entities | — | 32,318 | (d) | 32,318 | ||||
Accounts payable, accrued expenses and other liabilities | — | 21,204 | (e) | |||||
8,890 | (e) | 30,094 | ||||||
Accounts payable and accrued expenses | 8,890 | (8,890 | )(e) | — | ||||
Other liabilities | 21,204 | (21,204 | )(e) | — | ||||
(a) Mortgage-backed securities, available-for-sale, at fair value are now included in “Investment securities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(b) There were $21.7 million of marketable equity securities reported within “Other investments” as of December 31, 2012, which are now classified as “Investment securities,” a new caption in the September 30, 2013 balance sheet. | ||||||||
(c) Our investments in residential real estate and non-performing residential loans have increased significantly during 2013, and are now separately reported in the September 30, 2013 balance sheet. Such amounts were classified within “Other investments” as of December 31, 2012. | ||||||||
(d) Represents investments in unconsolidated entities that were classified within “Other investments” as of December 31, 2012. Such investments are now reported within “Investment in unconsolidated entities,” which is a new caption in the September 30, 2013 balance sheet. | ||||||||
(e) We have combined accounts payable, accrued expenses and other liabilities into one caption in the September 30, 2013 balance sheet. Other liabilities were presented separately in the December 31, 2012 balance sheet. | ||||||||
Schedule of reclassification adjustments in statements of operations | ' | |||||||
Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 180 | (a) | 180 | ||||
Interest income from cash balances | 180 | (180 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 2,739 | (b) | 2,739 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 2,923 | (2,393 | )(b) | 530 | ||||
Net gains (losses) on currency hedges | (10,392 | ) | 10,392 | (c) | — | |||
Net gains (losses) on interest rate hedges | 608 | (608 | )(c) | — | ||||
Loss on derivative financial instruments | — | (9,784 | )(c) | (9,784 | ) | |||
Net realized foreign currency gains (losses) | 8,515 | (8,515 | )(d) | — | ||||
Unrealized foreign currency remeasurement gains | 2,707 | (2,707 | )(d) | — | ||||
Foreign currency gain, net | — | 11,222 | (d) | 11,222 | ||||
Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Other revenues | — | 66 | (a) | 66 | ||||
Interest income from cash balances | 66 | (66 | )(a) | — | ||||
Earnings from unconsolidated entities | — | 787 | (b) | 787 | ||||
Rental income | — | 59 | (b) | 59 | ||||
Residential segment, other operating costs | — | 327 | (b) | 327 | ||||
Depreciation and amortization | — | 78 | (b) | 78 | ||||
Other income | 621 | (441 | )(b) | 180 | ||||
Net gains (losses) on currency hedges | (7,510 | ) | 7,510 | (c) | — | |||
Net gains (losses) on interest rate hedges | (51 | ) | 51 | (c) | — | |||
Loss on derivative financial instruments | — | (7,561 | )(c) | (7,561 | ) | |||
Net realized foreign currency gains (losses) | (337 | ) | 337 | (d) | — | |||
Unrealized foreign currency remeasurement gains (losses) | 7,062 | (7,062 | )(d) | — | ||||
Foreign currency gain, net | — | 6,725 | (d) | 6,725 | ||||
(a) Interest income from cash balances has been reclassified into “Other revenues,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(b) Earnings from unconsolidated entities and various other items are now separate captions in the income statement for the three and nine months ended September 30, 2013. We previously classified such items for the three and nine months ended September 30, 2012, within “Other income.” | ||||||||
(c) The amounts in “Net gains (losses) on currency hedges” and “Net gains (losses) on interest rate hedges” have been reclassified into “Loss on derivative financial instruments,” a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
(d) The amounts in “Net realized foreign currency gains (losses) and “Unrealized foreign currency remeasurement gains (losses)” have been reclassified into “Foreign currency gain, net,” which is a new caption in the income statement for the three and nine months ended September 30, 2013. | ||||||||
Schedule of reclassification adjustments in statements of cash flows | ' | |||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 | ||||||||
(amounts in thousands) | ||||||||
Financial Statement Caption | Amount As | Reclassification | Amount as | |||||
Previously | Adjustment | Adjusted | ||||||
Reported | ||||||||
Gain on sale of available-for-sale securities | (12,097 | ) | 12,097 | (a) | — | |||
Gain on sale of loans | (7,177 | ) | 7,177 | (a) | — | |||
Gain on sale of investments | — | (19,274 | )(a) | (19,274 | ) | |||
Unrealized gains (losses) on interest rate hedges | (9,991 | ) | 9,991 | (b) | — | |||
Unrealized losses on currency hedges | 13,319 | (13,319 | )(b) | — | ||||
Change in fair value of derivatives | — | 3,328 | (b) | 3,328 | ||||
Gain on foreign currency remeasurement | (8,809 | ) | 8,809 | (c) | — | |||
Unrealized foreign currency remeasurement losses (gains) | (2,707 | ) | 2,707 | (c) | — | |||
Foreign currency gain, net | — | (11,516 | )(c) | (11,516 | ) | |||
Purchased interest on investments | (638 | ) | 638 | (d) | — | |||
Origination and purchase of loans held-for-investment | (942,692 | ) | (638 | )(d) | (943,330 | ) | ||
Loan maturities | 460,789 | (460,789 | )(e) | — | ||||
Loan investment principal repayments | 33,518 | (33,518 | )(e) | — | ||||
Proceeds from principal collections on loans | — | 494,307 | (e) | 494,307 | ||||
(a) We have combined “Gain on sale of available-for-sale securities” and “Gain on sale of loans” into “Gain on sale of investments,” a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(b) We have combined “Unrealized gains (losses) on interest rate hedges” and “Unrealized (gains) losses on currency hedges” into “Change in fair value of derivatives,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(c) We have combined “Gain on foreign currency remeasurement” and “Unrealized foreign currency remeasurement losses (gains)” into “Foreign currency gain, net,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
(d) We have combined “Purchased interest on investments” into “Origination and purchase of loans held-for-investment.” | ||||||||
(e) We have combined “Loan maturities” and “Loan investment principal repayments” into “Proceeds from principal collections on loans,” which is a new caption in our cash flow statement for the nine months ended September 30, 2013. | ||||||||
Acquisition_of_LNR_Property_LL1
Acquisition of LNR Property LLC (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Acquisition of LNR Property LLC | ' | |||||||||||||
Schedule of the initial and adjusted provisional estimates of identified assets acquired and liabilities assumed | ' | |||||||||||||
The following table summarizes the initial and adjusted provisional estimates of identified assets acquired and liabilities assumed at the acquisition date, before consolidation of securitization VIEs, which had no impact on the purchase price (in thousands): | ||||||||||||||
Initial | Measurement | Adjusted | ||||||||||||
Provisional | Period | Provisional | ||||||||||||
Amounts | Adjustments | Amounts | ||||||||||||
Assets acquired: | ||||||||||||||
Cash and cash equivalents | $ | 143,771 | $ | — | $ | 143,771 | ||||||||
Restricted cash | 24,413 | — | 24,413 | |||||||||||
Loans held-for-investment | 8,015 | — | 8,015 | |||||||||||
Loans held-for-sale | 256,502 | — | 256,502 | |||||||||||
Investment securities | 314,471 | — | 314,471 | |||||||||||
Intangible assets — servicing rights | 276,989 | — | 276,989 | |||||||||||
Investment in unconsolidated entities | 97,588 | (1,170 | ) | 96,418 | ||||||||||
Derivative assets | 3,103 | — | 3,103 | |||||||||||
Interest receivable | 1,315 | — | 1,315 | |||||||||||
Other assets | 60,853 | (152 | ) | 60,701 | ||||||||||
Total assets acquired | 1,187,020 | (1,322 | ) | 1,185,698 | ||||||||||
Liabilities assumed: | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | 118,621 | 4,927 | 123,548 | |||||||||||
Secured financing agreements | 438,377 | — | 438,377 | |||||||||||
Derivative liabilities | 354 | — | 354 | |||||||||||
Total liabilities assumed | 557,352 | 4,927 | 562,279 | |||||||||||
Net assets acquired | $ | 629,668 | $ | (6,249 | ) | $ | 623,419 | |||||||
Schedule of Goodwill amount represents the purchase price over the fair value of net tangible and identifiable intangible assets | ' | |||||||||||||
Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed. This determination of goodwill is as follows (amounts in thousands): | ||||||||||||||
Initial | Measurement | Adjusted | ||||||||||||
Provisional | Period | Provisional | ||||||||||||
Amounts | Adjustments | Amounts | ||||||||||||
Purchase price | $ | 730,518 | — | $ | 730,518 | |||||||||
Provisional estimates of the fair value of net assets acquired | 629,668 | (6,249 | ) | 623,419 | ||||||||||
Goodwill | $ | 100,850 | 6,249 | $ | 107,099 | |||||||||
Schedule of pro forma revenue and net earnings assuming the acquisition occurred on January 1, 2012 | ' | |||||||||||||
The pro forma revenue and net income of the combined entity for the three and nine months ended September 30, 2013 and 2012, assuming the business combination was consummated on January 1, 2012, are as follows (amounts in thousands): | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | $ | 155,536 | $ | 150,058 | $ | 459,856 | $ | 416,109 | ||||||
Net income | 97,288 | 112,757 | 299,338 | 263,908 | ||||||||||
Schedule of adjustments related to pro forma revenue and net income assuming the acquisition occurred on January 1, 2012 | ' | |||||||||||||
Pro forma revenues and expenses were adjusted to exclude interest expense on LNR’s senior credit facility, which was repaid at the acquisition date, and certain other non-recurring acquisition related costs. We included an estimated income tax provision and management fee expense for periods prior to the acquisition date and estimated interest expense for the term loan facility discussed in Note 10. The amounts of these adjustments are as follows (in thousands): | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net interest expense addition (deduction) | $ | — | $ | (1,416 | ) | $ | 752 | $ | (4,385 | ) | ||||
Non-recurring acquisition costs addition (deduction) | (7,291 | ) | 7,699 | (125,936 | ) | 23,097 | ||||||||
Income tax provision addition | 1,604 | 15,722 | 15,577 | 28,647 | ||||||||||
Management fee expense addition | — | 23,164 | 18,657 | 32,907 | ||||||||||
Restricted_Cash_Tables
Restricted Cash (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Restricted Cash | ' | |||||||
Summary of restricted cash | ' | |||||||
A summary of our restricted cash as of September 30, 2013 and December 31, 2012, is as follows (amounts in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Funds held in escrow for employees | $ | 19,587 | $ | — | ||||
Cash collateral for derivative financial instruments | 14,608 | — | ||||||
Cash collateral for performance obligations | 9,482 | — | ||||||
Funds held in escrow on behalf of borrowers and other | 39,029 | 3,429 | ||||||
$ | 82,706 | $ | 3,429 |
Loans_Tables
Loans (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Loans | ' | |||||||||||||||||||
Schedule of investments in mortgages and loans by subordination class | ' | |||||||||||||||||||
The following table summarizes our investments in mortgages and loans by subordination class as of September 30, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||
September 30, 2013 | Carrying | Face | Weighted | WAL | ||||||||||||||||
Value | Amount | Average | (years)(2) | |||||||||||||||||
Coupon | ||||||||||||||||||||
First mortgages | $ | 1,928,052 | $ | 1,975,959 | 6.1 | % | 4.3 | |||||||||||||
Subordinated mortgages(1) | 523,393 | 560,147 | 7.9 | % | 3.5 | |||||||||||||||
Mezzanine loans | 1,342,793 | 1,354,863 | 10.8 | % | 3.5 | |||||||||||||||
Total loans held-for-investment | 3,794,238 | 3,890,969 | ||||||||||||||||||
First mortgages held-for-sale, lower of cost or fair value | 66,018 | 67,000 | 3.5 | % | 4.9 | |||||||||||||||
First mortgages held-for-sale, fair value option elected | 279,121 | 273,110 | 5.3 | % | 9.3 | |||||||||||||||
Loans transferred as secured borrowings | 85,590 | 85,740 | 4.7 | % | 2.4 | |||||||||||||||
Total gross loans | 4,224,967 | 4,316,819 | ||||||||||||||||||
Loan loss allowance | (3,976 | ) | — | |||||||||||||||||
Total net loans | $ | 4,220,991 | $ | 4,316,819 | ||||||||||||||||
December 31, 2012 | Carrying | Face | Weighted | WAL | ||||||||||||||||
Value | Amount | Average | (years)(2) | |||||||||||||||||
Coupon | ||||||||||||||||||||
First mortgages | $ | 1,461,666 | $ | 1,502,382 | 6.2 | % | 3.8 | |||||||||||||
Subordinated mortgages(1) | 397,159 | 430,444 | 9.8 | % | 4 | |||||||||||||||
Mezzanine loans | 1,057,670 | 1,079,897 | 10.3 | % | 3.6 | |||||||||||||||
Total loans held-for-investment | 2,916,495 | 3,012,723 | ||||||||||||||||||
Loans transferred as secured borrowings | 85,901 | 86,337 | 4.7 | % | 3.2 | |||||||||||||||
Total gross loans | 3,002,396 | 3,099,060 | ||||||||||||||||||
Loan loss allowance | (2,061 | ) | — | |||||||||||||||||
Total net loans | $ | 3,000,335 | $ | 3,099,060 | ||||||||||||||||
(1) Subordinated mortgages include (i) subordinated mortgages that we retain after having sold first mortgage positions related to the same collateral, (ii) B-Notes, and (iii) subordinated loan participations. | ||||||||||||||||||||
(2) Represents the WAL of each respective group of loans. The WAL of each individual loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of September 30, 2013 and December 31, 2012. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the loan. | ||||||||||||||||||||
Schedule of investments in floating rate loans | ' | |||||||||||||||||||
The following table summarizes our investments in floating rate loans (amounts in thousands): | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Index | Rate | Carrying Value | Rate | Carrying Value | ||||||||||||||||
1 Month LIBOR | 0.18% | $ | 453,690 | 0.21% | $ | 674,327 | ||||||||||||||
1 Month Citibank LIBOR(1) | N/A | — | 0.19% | 93,195 | ||||||||||||||||
3 Month Citibank LIBOR(1) | N/A | — | 0.30% | 7,217 | ||||||||||||||||
3 Month EURIBOR | 0.22% | 54,091 | N/A | — | ||||||||||||||||
LIBOR Floor | 0.19% - 3.0%(2) | 2,201,216 | 0.5% - 2.0% | 1,143,443 | ||||||||||||||||
Total | $ | 2,708,997 | $ | 1,918,182 | ||||||||||||||||
(1) The Citibank LIBOR rate is equal to the rate per annum at which deposits in United States dollars are offered by the principal office of Citibank, N.A. in London, England to prime banks in the London interbank market. | ||||||||||||||||||||
(2) The weighted-average LIBOR Floor is 0.52% as of September 30, 2013. | ||||||||||||||||||||
Schedule of risk ratings by class of loan | ' | |||||||||||||||||||
As of September 30, 2013, the risk ratings for loans subject to our rating system, which is described in our Form 10-K, and excludes loans on cost recovery method and loans for which the fair value option has been elected, by class of loan were as follows (amounts in thousands): | ||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||
Risk | Loans Held-For-Investment | Loans | ||||||||||||||||||
Transferred | ||||||||||||||||||||
Rating | First | Subordinated | Mezzanine | Loans Held- | As Secured | Total | ||||||||||||||
Category | Mortgages | Mortgages | Loans | For-Sale | Borrowings | |||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
2 | 25,473 | 2,422 | 343,818 | — | 13,046 | 384,759 | ||||||||||||||
3 | 1,740,951 | 489,430 | 919,293 | 66,018 | 72,544 | 3,288,236 | ||||||||||||||
4 | 153,845 | 31,541 | 79,682 | — | — | 265,068 | ||||||||||||||
5 | — | — | — | — | — | — | ||||||||||||||
Not Rated | 7,783 | — | — | 279,121 | — | 286,904 | ||||||||||||||
$ | 1,928,052 | $ | 523,393 | $ | 1,342,793 | $ | 345,139 | $ | 85,590 | $ | 4,224,967 | |||||||||
As of December 31, 2012, the risk ratings by class of loan, excluding loans where we have elected the fair value option, were as follows (amounts in thousands): | ||||||||||||||||||||
Balance Sheet Classification | ||||||||||||||||||||
Risk | Loans Held-For-Investment | Loans | ||||||||||||||||||
Transferred | ||||||||||||||||||||
Rating | First | Subordinated | Mezzanine | Loans Held- | As Secured | Total | ||||||||||||||
Category | Mortgages | Mortgages | Loans | For-Sale | Borrowings | |||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
2 | 39,734 | 2,434 | 370,671 | — | 13,113 | 425,952 | ||||||||||||||
3 | 1,350,455 | 363,275 | 679,371 | — | 72,788 | 2,465,889 | ||||||||||||||
4 | 59,970 | 31,450 | 7,628 | — | — | 99,048 | ||||||||||||||
5 | 11,507 | — | — | — | — | 11,507 | ||||||||||||||
$ | 1,461,666 | $ | 397,159 | $ | 1,057,670 | $ | — | $ | 85,901 | $ | 3,002,396 | |||||||||
Schedule of changes in reserve for loan losses | ' | |||||||||||||||||||
We recorded an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4,” plus (ii) 5% of the aggregate carrying amount of loans rated as a “5.” These groups accounted for 6.3% and 3.7% of our loan portfolio as of September 30, 2013 and December 31, 2012, respectively (amounts in thousands): | ||||||||||||||||||||
For the Nine | For the Nine | |||||||||||||||||||
Months Ended | Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Reserve for loan losses at beginning of year | $ | 2,061 | $ | — | ||||||||||||||||
Provision for loan losses | 1,915 | — | ||||||||||||||||||
Charge-offs | — | — | ||||||||||||||||||
Recoveries | — | — | ||||||||||||||||||
Reserve for loan losses at end of period | $ | 3,976 | $ | — | ||||||||||||||||
Recorded investment in loans related to the allowance for loan loss | $ | 265,068 | $ | — | ||||||||||||||||
Schedule of activity in loan portfolio | ' | |||||||||||||||||||
For the nine months ended September 30, 2013, the activity in our loan portfolio was as follows (amounts in thousands): | ||||||||||||||||||||
Balance December 31, 2012 | $ | 3,000,335 | ||||||||||||||||||
Acquisition of LNR loans | 264,517 | |||||||||||||||||||
Acquisitions/originations | 2,506,378 | |||||||||||||||||||
Capitalized interest (1) | 12,481 | |||||||||||||||||||
Basis of loans sold (2) | (1,221,396 | ) | ||||||||||||||||||
Loan maturities | (329,636 | ) | ||||||||||||||||||
Principal repayments | (65,272 | ) | ||||||||||||||||||
Discount accretion/premium amortization | 26,917 | |||||||||||||||||||
Changes in fair value | 26,315 | |||||||||||||||||||
Unrealized foreign currency remeasurement gain | 3,784 | |||||||||||||||||||
Capitalized cost written off | (1,517 | ) | ||||||||||||||||||
Loan loss allowance | (1,915 | ) | ||||||||||||||||||
Balance September 30, 2013 | $ | 4,220,991 | ||||||||||||||||||
(1) Represents accrued interest income on loans whose terms do not require current payment of interest. | ||||||||||||||||||||
(2) See Note 12 of the condensed consolidated financial statements for additional disclosure on these transactions. | ||||||||||||||||||||
Investment_Securities_Tables
Investment Securities (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
Schedule of investment securities | ' | |||||||||||||||||||||||||
Investment securities are comprised of the following as of September 30, 2013 and December 31, 2012, (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Carrying Value | Carrying Value | |||||||||||||||||||||||||
CMBS | $ | 112,436 | $ | 529,434 | ||||||||||||||||||||||
CMBS, fair value option (1) | 85,710 | — | ||||||||||||||||||||||||
RMBS | 316,261 | 333,153 | ||||||||||||||||||||||||
Held-to-maturity (“HTM”) Securities | 37,370 | — | ||||||||||||||||||||||||
Equity Securities | 15,016 | 21,667 | ||||||||||||||||||||||||
Total | $ | 566,793 | $ | 884,254 | ||||||||||||||||||||||
(1) We also had $324.4 million of fair value option CMBS that are eliminated in consolidation against VIE liabilities pursuant to ASC 810. | ||||||||||||||||||||||||||
Schedule of purchases, sales and principal collections for all investment securities | ' | |||||||||||||||||||||||||
During the three and nine months ended September 30, 2013, purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three months ended September 30, 2013 | Equity | HTM | RMBS | CMBS | CMBS, fair | Total | ||||||||||||||||||||
Securities | Security | value option | ||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | — | $ | 1,889 | $ | 21,982 | $ | 23,871 | ||||||||||||||
Sales | — | — | — | (206,972 | ) | — | (206,972 | ) | ||||||||||||||||||
Principal collections | — | — | (14,124 | ) | (2,546 | ) | — | (16,670 | ) | |||||||||||||||||
Nine months ended September 30, 2013 | Equity | HTM | RMBS | CMBS | CMBS, fair | Total | ||||||||||||||||||||
Securities | Security | value option | ||||||||||||||||||||||||
Purchases | $ | — | $ | 37,174 | $ | 20,090 | $ | 1,889 | $ | 23,601 | $ | 82,754 | ||||||||||||||
Sales | (6,769 | ) | — | (12,713 | ) | (413,323 | ) | (10,072 | ) | (442,877 | ) | |||||||||||||||
Principal collections | — | — | (46,762 | ) | (10,031 | ) | — | (56,793 | ) | |||||||||||||||||
During the three and nine months ended September 30, 2012, purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three months ended September 30, 2012 | RMBS | CMBS | Total | |||||||||||||||||||||||
Purchases | $ | 95,820 | $ | — | $ | 95,820 | ||||||||||||||||||||
Sales | (9,425 | ) | (173,461 | ) | (182,886 | ) | ||||||||||||||||||||
Principal collections | (18,542 | ) | (5,874 | ) | (24,416 | ) | ||||||||||||||||||||
Nine months ended September 30, 2012 | RMBS | CMBS | Total | |||||||||||||||||||||||
Purchases | $ | 203,438 | $ | 372,252 | $ | 575,690 | ||||||||||||||||||||
Sales | (26,049 | ) | (173,461 | ) | (199,510 | ) | ||||||||||||||||||||
Principal collections | (52,310 | ) | (15,142 | ) | (67,452 | ) | ||||||||||||||||||||
Schedule of various attributes of investment in fair value option CMBS | ' | |||||||||||||||||||||||||
The table below summarizes various attributes of our investment in fair value option CMBS as of September 30, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(1) | ||||||||||||||||||||||||||
CMBS, fair value option | 5.6 | % | D | -2 | 3.4 | |||||||||||||||||||||
(1) The WAL of each security is calculated based on the period of time over which we expect to receive principal cash flows. Expected principal cash flows are based on contractual payments net of expected losses. | ||||||||||||||||||||||||||
(2) Includes $56.1 million in fair value option CMBS that are not rated. The remaining $29.6 million in fair value option CMBS have a weighted average rating of CCC-. | ||||||||||||||||||||||||||
Schedule of investments in available-for-sale CMBS and RMBS where the fair value option has not been elected | ' | |||||||||||||||||||||||||
The tables below summarize various attributes of our investments in available-for-sale CMBS and RMBS where the fair value option has not been elected as of September 30, 2013 and December 31, 2012, (amounts in thousands): | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) Recognized in | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||
September 30, 2013 | Purchase | Credit | Recorded | Non-Credit | Unrealized | Unrealized | Net | Fair Value | ||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Gains | Losses | Fair Value | ||||||||||||||||||||
Cost | Cost | Adjustment | ||||||||||||||||||||||||
CMBS | $ | 99,081 | $ | — | $ | 99,081 | $ | — | $ | 13,355 | $ | — | $ | 13,355 | $ | 112,436 | ||||||||||
RMBS | 273,836 | (10,573 | ) | 263,263 | (34 | ) | 56,390 | (3,358 | ) | 52,998 | 316,261 | |||||||||||||||
Total | $ | 372,917 | $ | (10,573 | ) | $ | 362,344 | $ | (34 | ) | $ | 69,745 | $ | (3,358 | ) | $ | 66,353 | $ | 428,697 | |||||||
September 30, 2013 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon(1) | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(2) | ||||||||||||||||||||||||||
CMBS | 11.5 | % | BB+ | 6 | ||||||||||||||||||||||
RMBS | 1 | % | CCC | 5.9 | ||||||||||||||||||||||
(1) Calculated using the one-month LIBOR rate as of September 30, 2013 of 0.17885% for variable rate securities. | ||||||||||||||||||||||||||
(2) Represents the WAL of each respective group of MBS. The WAL of each individual security is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with the denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of September 30, 2013. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) Recognized in | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||
December 31, 2012 | Purchase | Credit | Recorded | Non-Credit | Unrealized | Unrealized | Net | Fair Value | ||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Gains | Losses | Fair Value | ||||||||||||||||||||
Cost | Cost | Adjustment | ||||||||||||||||||||||||
CMBS | $ | 498,064 | $ | — | $ | 498,064 | $ | — | $ | 31,370 | $ | — | $ | 31,370 | $ | 529,434 | ||||||||||
RMBS | 293,321 | (10,194 | ) | 283,127 | — | 50,717 | (691 | ) | 50,026 | 333,153 | ||||||||||||||||
Total | $ | 791,385 | $ | (10,194 | ) | $ | 781,191 | $ | — | $ | 82,087 | $ | (691 | ) | $ | 81,396 | $ | 862,587 | ||||||||
December 31, 2012 | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||
Coupon(1) | Rating | Life | ||||||||||||||||||||||||
(“WAL”) | ||||||||||||||||||||||||||
(Years)(3) | ||||||||||||||||||||||||||
CMBS | 4.3 | % | BB+ | -2 | 3.3 | |||||||||||||||||||||
RMBS | 1.1 | % | CCC+ | 5.4 | ||||||||||||||||||||||
(1) Calculated using the December 31, 2012 one-month LIBOR rate of 0.2087% for floating rate securities. | ||||||||||||||||||||||||||
(2) Approximately 20.4% of the CMBS securities are rated BB+. The remaining 79.6% are securities where the obligors are certain special purpose entities that were formed to hold substantially all of the assets of a worldwide operator of hotels, resorts and timeshare properties; the securities are not rated but the loan-to-value ratio was estimated to be in the range of 39%-44% at December 31, 2012. | ||||||||||||||||||||||||||
(3) Represents the WAL of each respective group of MBS. The WAL of each individual security or loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. This calculation was made as of December 31, 2012. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
Schedule of reconciliation of aggregate principal balance to amortized cost for the entity's CMBS and RMBS, excluding CMBS where the entity have elected the fair value option | ' | |||||||||||||||||||||||||
The following table contains a reconciliation of aggregate principal balance to amortized cost for our CMBS and RMBS as of September 30, 2013 and December 31, 2012, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Principal balance | $ | 99,081 | $ | 452,868 | $ | 519,575 | $ | 489,218 | ||||||||||||||||||
Accretable yield | — | (110,265 | ) | (21,511 | ) | (108,486 | ) | |||||||||||||||||||
Non-accretable difference | — | (79,340 | ) | — | (97,605 | ) | ||||||||||||||||||||
Total discount | — | (189,605 | ) | (21,511 | ) | (206,091 | ) | |||||||||||||||||||
Amortized cost | $ | 99,081 | $ | 263,263 | $ | 498,064 | $ | 283,127 | ||||||||||||||||||
Schedule of changes to accretable yield and non accretable difference for the entity's CMBS and RMBS, excluding CMBS where the entity have elected the fair value option | ' | |||||||||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our CMBS and RMBS during the three month period ended September 30, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
For the three months ended September 30, 2013 | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Balance as of June 30, 2013 | $ | 7,081 | $ | 107,317 | $ | — | $ | 89,306 | ||||||||||||||||||
Accretion of discount | (885 | ) | (5,940 | ) | — | — | ||||||||||||||||||||
Principal write-downs | — | — | — | (1,130 | ) | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (6,196 | ) | — | — | — | |||||||||||||||||||||
OTTI | — | 52 | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | — | 8,836 | — | (8,836 | ) | |||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | $ | 110,265 | $ | — | $ | 79,340 | ||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our CMBS and RMBS during the nine month period ended September 30, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
For the nine months ended September 30, 2013 | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
CMBS | RMBS | CMBS | RMBS | |||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 21,511 | $ | 108,486 | $ | — | $ | 97,605 | ||||||||||||||||||
Accretion of discount | (5,442 | ) | (17,846 | ) | — | — | ||||||||||||||||||||
Principal write-downs | — | — | — | (2,133 | ) | |||||||||||||||||||||
Purchases | — | 5,738 | — | 1,758 | ||||||||||||||||||||||
Sales | (16,069 | ) | (2,418 | ) | — | (2,038 | ) | |||||||||||||||||||
OTTI | — | 453 | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | — | 15,852 | — | (15,852 | ) | |||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | $ | 110,265 | $ | — | $ | 79,340 | ||||||||||||||||||
Schedule of gross unrealized losses and estimated fair value of securities in an unrealized loss position, excluding CMBS where we have elected the fair value option | ' | |||||||||||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of the available-for-sale securities where (i) we have not elected the fair value option, (ii) that were in an unrealized loss position as of September 30, 2013, and (iii) for which OTTIs (full or partial) have not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
As of September 30, 2013 | Securities with a loss less | Securities with a loss | Securities with a loss | Securities with a loss | ||||||||||||||||||||||
than 12 months | greater than 12 months | less than 12 months | greater than 12 months | |||||||||||||||||||||||
CMBS | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
RMBS | 45,304 | 1,604 | (2,874 | ) | (519 | ) | ||||||||||||||||||||
Total | 45,304 | $ | 1,604 | $ | (2,874 | ) | $ | (519 | ) | |||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of our securities that were in an unrealized loss position as of December 31, 2012 for which OTTIs (full or partial) had not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
As of December 31, 2012 | Securities with a loss less | Securities with a loss | Securities with a loss | Securities with a loss | ||||||||||||||||||||||
than 12 months | greater than 12 months | less than 12 months | greater than 12 months | |||||||||||||||||||||||
CMBS | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
RMBS | 4,096 | 599 | (654 | ) | (37 | ) | ||||||||||||||||||||
Total | $ | 4,096 | $ | 599 | $ | (654 | ) | $ | (37 | ) |
Residential_Real_Estate_Tables
Residential Real Estate (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Other Investments | ' | |||||||||||||||
Schedule of properties | ' | |||||||||||||||
Type | Depreciable | Acquisition | Cost Capitalized | Accumulated | Net Book | |||||||||||
Life | Cost | Subsequent to | Depreciation | Value | ||||||||||||
Acquisition | ||||||||||||||||
Building | 30 years | $ | 173,554 | $ | 19,909 | $ | 3,086 | $ | 190,377 | |||||||
Land | — | 49,706 | — | — | 49,706 | |||||||||||
Furniture & Fixtures | 5 years | 167 | 616 | 105 | 678 | |||||||||||
Development Assets (1) | — | 291,058 | 16,203 | — | 307,261 | |||||||||||
$ | 514,485 | $ | 36,728 | $ | 3,191 | $ | 548,022 | |||||||||
(1) Development Assets represent residential properties that are being renovated or otherwise prepared for their intended use, which is either sale or rental. Costs incurred during the development period are capitalized. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Goodwill and Intangible Assets | ' | ||||
Schedule of information about servicing intangibles for the LNR Stub Period | ' | ||||
Domestic servicing rights, at fair value | |||||
Fair value at April 19, 2013 | $ | 156,993 | |||
Changes in fair value due to changes in inputs and assumptions | 1,030 | ||||
Fair value at September 30, 2013 | 158,023 | ||||
European servicing rights | |||||
Carrying value at April 19, 2013 (fair value) | 32,649 | ||||
Amortization | (4,765 | ) | |||
Foreign exchange gain | 1,825 | ||||
Carrying value at September 30, 2013 (fair value of $31.4 million) | 29,709 | ||||
Total servicing rights at September 30, 2013 | $ | 187,732 | |||
Schedule of future amortization expense for the European servicing intangible | ' | ||||
The future amortization expense for the European servicing intangible is expected to be as follows (in thousands): | |||||
2013 (remainder of) | $ | 3,160 | |||
2014 | 12,961 | ||||
2015 | 8,808 | ||||
2016 | 3,472 | ||||
2017 and thereafter | 1,308 | ||||
Total | $ | 29,709 |
Secured_Financing_Agreements_T
Secured Financing Agreements (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Secured Financing Agreements | ' | ||||||||||||||||||||||
Summary of secured financing agreements | ' | ||||||||||||||||||||||
The following table is a summary of our secured financing agreements in place as of September 30, 2013 (in thousands). Refer to our Form 10-K for additional information regarding our secured financing agreements: | |||||||||||||||||||||||
Facility | Revolver | Eligible | Current | Extended | Pricing | Pledged | Maximum | Carrying | |||||||||||||||
Type | Assets | Maturity | Maturity (a) | Asset | Facility | Value | |||||||||||||||||
Carrying | Size | ||||||||||||||||||||||
Value | |||||||||||||||||||||||
Wells Fargo II | Repurchase | Yes | Identified Loans | Aug-14 | Aug-15 | LIBOR + 1.75% to 6% | $ | 842,044 | $ | 550,000 | $ | 246,810 | |||||||||||
Wells Fargo III | Repurchase | Yes | Identified RMBS | (c) | N/A | LIBOR + 1.90% | $ | 289,830 | $ | 175,000 | $ | 72,719 | |||||||||||
Wells Fargo IV | Repurchase | No | Identified Loans | Dec-14 | Dec-16 | LIBOR + 2.75% | $ | 210,949 | $ | 154,935 | $ | 154,935 | |||||||||||
Goldman III | Repurchase | No | Single Borrower Secured Note | Sep-15 | N/A | LIBOR + 3.70% | $ | 210,125 | $ | 149,989 | $ | 149,989 | |||||||||||
Citibank | Repurchase | Yes | Identified Loans | Mar-14 | Mar-17 | LIBOR + 1.75% to 3.75% | $ | 158,643 | $ | 125,000 | $ | 100,952 | |||||||||||
Borrowing Base | Bank Credit Facility | Yes | Identified Loans | Sep-15 | Sep-17 | LIBOR + 3.25% (b) | $ | 591,916 | $ | 250,000 | — | ||||||||||||
Onewest Bank | Repurchase | No | Identified Loans | Jul-15 | Jul-17 | LIBOR + 3.00% | $ | 124,822 | $ | 84,012 | $ | 84,012 | |||||||||||
Conduit I | Repurchase | Yes | Identified Loans | Sep-14 | Sep-14 | LIBOR + 2.20% | $ | 75,234 | $ | 250,000 | $ | 55,395 | |||||||||||
Conduit II | Repurchase | Yes | Identified Loans | Nov-14 | Nov-14 | LIBOR + 2.10% | $ | 203,887 | $ | 150,000 | $ | 149,438 | |||||||||||
Term Loan | Syndicated Facility | Yes | Specifically Identified Assets | Apr-20 | Apr-20 | LIBOR + 2.75% (b) | $ | 1,726,171 | $ | 298,500 | $ | 297,794 | (d) | ||||||||||
Total | $ | 1,312,044 | |||||||||||||||||||||
(a) | Subject to certain conditions as defined in facility agreement. | ||||||||||||||||||||||
(b) | Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||||
(c) | The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 13, 2015. | ||||||||||||||||||||||
(d) | Term loan outstanding balance is net of $706 thousand in discount amortization. | ||||||||||||||||||||||
Schedule of five-year principal repayments for secured financings | ' | ||||||||||||||||||||||
2013 (remainder of) | $ | 239,106 | |||||||||||||||||||||
2014 | 589,295 | ||||||||||||||||||||||
2015 | 192,599 | ||||||||||||||||||||||
2016 | 3,000 | ||||||||||||||||||||||
2017 and thereafter (1) | 288,750 | ||||||||||||||||||||||
Total | $ | 1,312,750 | |||||||||||||||||||||
(1) Principal paydown of the Term Loan in 2020 excludes $706 thousand in discount amortization. | |||||||||||||||||||||||
Convertible_Senior_Notes_Table
Convertible Senior Notes (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
Schedule of the unsecured convertible senior notes outstanding | ' | ||||||||||||||
The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of September 30, 2013 (amounts in thousands, except rates): | |||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Remaining Period of | ||||||||||
Amount | Rate | Rate (1) | Rate (2) | Date | Amortization | ||||||||||
2018 Notes | $ | 600,000 | 4.55 | % | 6.08 | % | 35.5981 | 2/15/18 | 4.4 years | ||||||
2019 Notes | $ | 460,000 | 4 | % | 5.37 | % | 37.9896 | 1/15/19 | 5.3 years | ||||||
As of | |||||||||||||||
September 30, 2013 | |||||||||||||||
Total principal | $ | 1,060,000 | |||||||||||||
Net unamortized discount | (64,928 | ) | |||||||||||||
Carrying amount of debt components | $ | 995,072 | |||||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,502 | |||||||||||||
(1) Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
(2) The conversion rate represents the number of common shares issuable per $1,000 principal amount of Convertible Notes converted. The initial conversion rate for the 2018 Notes was 35.5391, but was adjusted to 35.5981 in accordance with the applicable indenture because the dividend distributions of $0.46 per share declared in each of the second and third quarters of 2013 exceeded the initial dividend threshold amount of $0.44 per share specified in the indenture. No such adjustment was necessary with respect to the 2019 Notes because the initial dividend threshold amount is $0.46 per share in the applicable indenture. The Company has the option to settle any conversions in cash, common shares or a combination thereof. The if-converted value of the Convertible Notes does not exceed their principal amount at September 30, 2013 since the closing market price of the Company’s common stock of $23.97 per share does not exceed the implicit conversion prices of $28.09 per share for the 2018 Notes and $26.32 for the 2019 Notes . | |||||||||||||||
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activity (Tables) | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||||||||
Tabular Disclosure of Fair Values of Derivative Instruments | ' | |||||||||||||||||||||
The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of September 30, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||||
Tabular Disclosure of Fair Values of Derivative Instruments | ||||||||||||||||||||||
Derivatives in an Asset Position | Derivatives in a Liability Position | |||||||||||||||||||||
As of September 30, 2013 | As of December 31, | As of September 30, 2013 | As of December 31, | |||||||||||||||||||
2012 | 2012 | |||||||||||||||||||||
Balance | Fair | Balance | Fair | Balance Sheet | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | Location | Value | Sheet | Value | |||||||||||||||
Location | Location | Location | ||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||
Interest rate swaps | Derivative Assets | $ | 96 | Derivative Assets | $ | — | Derivative Liabilities | $ | 1,084 | Derivative Liabilities | $ | 2,571 | ||||||||||
Total derivatives designated as hedging instruments | 96 | — | 1,084 | 2,571 | ||||||||||||||||||
Derivatives not designatedas hedging instruments: | ||||||||||||||||||||||
Interest rate swaps | Derivative Assets | 3,243 | Derivative Assets | 4,892 | Derivative Liabilities | 6,186 | Derivative Liabilities | 1,772 | ||||||||||||||
Foreign exchange contracts | Derivative Assets | 3,243 | N/A | 4,335 | Derivative Liabilities | 24,982 | Derivative Liabilities | 23,427 | ||||||||||||||
Credit index instruments | Derivative Assets | 2,931 | N/A | — | Derivative Liabilities | — | N/A | — | ||||||||||||||
Total derivatives not designated as hedging instruments | 9,417 | 9,227 | 31,168 | 25,199 | ||||||||||||||||||
Total derivatives | $ | 9,513 | $ | 9,227 | $ | 32,252 | $ | 27,770 | ||||||||||||||
Schedule of cash flow hedges impact | ' | |||||||||||||||||||||
Cash flow hedges impact for the three months ended September 30, 2013: | ||||||||||||||||||||||
Derivative type for | Amount of Loss | Location of loss | Amount of loss | Location of loss | Amount of loss | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 594 | Interest Expense | $ | 397 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the three months ended September 30, 2012: | ||||||||||||||||||||||
Derivative type for | Amount of loss | Location of loss | Amount of loss | Location of gain | Amount of gain | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 1,072 | Interest Expense | $ | 661 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the nine months ended September 30, 2013: | ||||||||||||||||||||||
Derivative type for | Amount of Gain | Location of loss | Amount of loss | Location of loss | Amount of loss | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 332 | Interest Expense | $ | 1,251 | Interest Expense | $ | — | ||||||||||||||
Cash flow hedges impact for the nine months ended September 30, 2012: | ||||||||||||||||||||||
Derivative type for | Amount of loss | Location of loss | Amount of loss | Location of gain | Amount of gain | |||||||||||||||||
cash flow hedge | recognized in | reclassified from | reclassified from | recognized in | recognized in | |||||||||||||||||
OCI | accumulated OCI | accumulated OCI | income on | income on | ||||||||||||||||||
on derivative | into income | into income | derivative | derivative | ||||||||||||||||||
(effective portion) | (effective portion) | (effective portion) | (ineffective portion) | (ineffective portion) | ||||||||||||||||||
Interest Rate | $ | 3,534 | Interest Expense | $ | 1,911 | Interest Expense | $ | — | ||||||||||||||
Schedule of non-designated derivatives impact | ' | |||||||||||||||||||||
Non-Designated derivatives impact for the three months ended September 30, 2013 and 2012: | ||||||||||||||||||||||
Derivatives Not Designated | Location of Gain/(Loss) | Amount of Gain/(Loss) | ||||||||||||||||||||
Recognized in Income on | Recognized in Income on | |||||||||||||||||||||
Derivative | ||||||||||||||||||||||
as Hedging Instruments | Derivative | 2013 | 2012 | |||||||||||||||||||
Interest Rate Swaps | Gain (loss) on derivative financial instruments | $ | (4,261 | ) | $ | (51 | ) | |||||||||||||||
Foreign Exchange Contracts | Gain (loss) on derivative financial instruments | (17,459 | ) | (7,510 | ) | |||||||||||||||||
Credit Index Instruments | Gain (loss) on derivative financial instruments | (731 | ) | — | ||||||||||||||||||
$ | (22,451 | ) | $ | (7,561 | ) | |||||||||||||||||
Non-Designated derivatives impact for the nine months ended September 30, 2013 and 2012: | ||||||||||||||||||||||
Derivatives Not Designated | Location of Gain/(Loss) | Amount of Gain/(Loss) | ||||||||||||||||||||
Recognized in Income on | Recognized in Income on | |||||||||||||||||||||
Derivative | ||||||||||||||||||||||
as Hedging Instruments | Derivative | 2013 | 2012 | |||||||||||||||||||
Interest Rate Swaps | Gain (loss) on derivative financial instruments | $ | 2,752 | $ | 608 | |||||||||||||||||
Foreign Exchange Contracts | Gain (loss) on derivative financial instruments | (2,692 | ) | (10,392 | ) | |||||||||||||||||
Credit Index Instruments | Gain (loss) on derivative financial instruments | (125 | ) | — | ||||||||||||||||||
$ | (65 | ) | $ | (9,784 | ) | |||||||||||||||||
Offsetting_Assets_and_Liabilit1
Offsetting Assets and Liabilities (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
Schedule of offsetting assets and liabilities | ' | |||||||||||||||||||
In accordance with Accounting Standards Update (“ASU”) No. 2011-11 and ASU No. 2013-01, we are disclosing the following information to enable users of our financial statements to understand the potential effect of netting arrangements on our financial position for recognized assets and liabilities within the scope of these standards, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | ||||||||||||||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Offset in the | Net Amounts of | Statement of Financial Position | ||||||||||||||||||
As of September 30, 2013 | Gross Amounts | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | of Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Assets | Position | Financial Position | Received | |||||||||||||||||
Derivatives | $ | 9,513 | $ | — | $ | 9,513 | $ | 6,269 | $ | 2,080 | $ | 1,164 | ||||||||
Total | $ | 9,513 | $ | — | $ | 9,513 | $ | 6,269 | $ | 2,080 | $ | 1,164 | ||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Offset in the | Net Amounts of | Statement of Financial Position | ||||||||||||||||||
As of September 30, 2013 | Gross Amounts | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | of Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Liabilities | Position | Financial Position | Pledged | |||||||||||||||||
Derivatives | $ | 32,252 | $ | — | $ | 32,252 | $ | 6,269 | $ | 2,239 | $ | 23,744 | ||||||||
Secured financing facilities (1) | 1,014,250 | — | 1,014,250 | 1,014,250 | — | — | ||||||||||||||
Total | $ | 1,046,502 | $ | — | $ | 1,046,502 | $ | 1,020,519 | $ | 2,239 | $ | 23,744 | ||||||||
(1) The fair value of assets pledged against the Company’s repurchase agreements was $2,115.5 million at September 30, 2013. | ||||||||||||||||||||
With regard to the repurchase agreement liabilities above, the actual fair values and carrying values (if carried at amortized cost) exceed the respective liabilities. However, the amount required to be disclosed as offsetting collateral is limited to the repurchase agreement liability. | ||||||||||||||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Gross | Offset in the | Net Amounts of | Statement of Financial Position | |||||||||||||||||
As of December 31, 2012 | Amounts of | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Assets | Position | Financial Position | Received | |||||||||||||||||
Derivatives | $ | 9,227 | $ | — | $ | 9,227 | $ | 4,335 | $ | 2,989 | $ | 1,903 | ||||||||
Total | $ | 9,227 | $ | — | $ | 9,227 | $ | 4,335 | $ | 2,989 | $ | 1,903 | ||||||||
(ii) | (iv) | |||||||||||||||||||
(i) | Gross Amounts | (iii) =160;(i) - (ii) | Gross Amounts Not Offset in the | |||||||||||||||||
Gross | Offset in the | Net Amounts of | Statement of Financial Position | |||||||||||||||||
As of December 31, 2012 | Amounts of | Statement of | Assets Presented in | Financial | Cash | (v) =160;(iii) - (iv) | ||||||||||||||
Description | Recognized | Financial | the Statement of | Instruments | Collateral | Net Amount | ||||||||||||||
Liabilities | Position | Financial Position | Pledged | |||||||||||||||||
Derivatives | $ | 27,770 | $ | — | $ | 27,770 | $ | 4,335 | $ | — | $ | 23,435 | ||||||||
Secured financing facilities (1) | 1,305,812 | — | 1,305,812 | 1,305,812 | — | — | ||||||||||||||
Total | $ | 1,333,582 | $ | — | $ | 1,333,582 | $ | 1,310,147 | $ | — | $ | 23,435 | ||||||||
With regard to the repurchase agreement liabilities above, the actual fair values and carrying values (if carried at amortized cost) exceed the respective liabilities. However, the amount required to be disclosed as offsetting collateral is limited to the repurchase agreement liability. | ||||||||||||||||||||
(1) The fair value of assets pledged against the Company’s repurchase agreements was $2,502.9 million at December 31, 2012. | ||||||||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Stockholders' Equity | ' | ||||||||||||
Schedule of dividends declared by board of directors | ' | ||||||||||||
Our board of directors declared the following dividends in 2013 and 2012: | |||||||||||||
Ex-Dividend Date | Record Date | Announce Date | Pay Date | Amount | Frequency | ||||||||
9/26/13 | 9/30/13 | 8/6/13 | 10/15/13 | $ | 0.46 | Quarterly | |||||||
6/26/13 | 6/28/13 | 5/8/13 | 7/15/13 | $ | 0.46 | Quarterly | |||||||
3/26/13 | 3/28/13 | 2/27/13 | 4/15/13 | $ | 0.44 | Quarterly | |||||||
12/27/12 | 12/31/12 | 12/13/12 | 1/15/13 | $ | 0.1 | Special | |||||||
12/17/12 | 12/31/12 | 11/6/12 | 1/15/13 | $ | 0.44 | Quarterly | |||||||
9/26/12 | 9/28/12 | 8/3/12 | 10/15/12 | $ | 0.44 | Quarterly | |||||||
6/27/12 | 6/29/12 | 5/8/12 | 7/13/13 | $ | 0.44 | Quarterly | |||||||
3/28/12 | 3/30/12 | 2/29/12 | 4/13/12 | $ | 0.44 | Quarterly | |||||||
Schedule of Non-Vested Share and Share Equivalents | ' | ||||||||||||
Schedule of Non-Vested Share and Share Equivalents | |||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | Total | ||||||||||
Grants to | Grants | Unit and | |||||||||||
Independent | to Employees | Restricted Stock | |||||||||||
Directors | Grants | ||||||||||||
to Manager | |||||||||||||
Balance as of June 30, 2013 | 8,804 | 32,265 | 835,417 | 876,486 | |||||||||
Granted | 11,228 | — | — | 11,228 | |||||||||
Vested | (8,804 | ) | (4,048 | ) | (162,501 | ) | (175,353 | ) | |||||
Forfeited | — | — | — | — | |||||||||
Balance as of September 30, 2013 | 11,228 | 28,217 | 672,916 | 712,361 | |||||||||
Vesting Schedule | ' | ||||||||||||
Vesting Schedule | |||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | Total | ||||||||||
Grants to | Unit | Unit | |||||||||||
Independent | Grants to | Grants to | |||||||||||
Directors | Employees | Manager | |||||||||||
2013 (remainder of) | — | 5,715 | 162,501 | 168,216 | |||||||||
2014 | 11,228 | 14,168 | 291,667 | 317,063 | |||||||||
2015 | — | 8,334 | 218,748 | 227,082 | |||||||||
Total | 11,228 | 28,217 | 672,916 | 712,361 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||
Schedule of changes in accumulated other comprehensive income (loss) | ' | |||||||||||||
The changes in accumulated other comprehensive income by component for the three months ended September 30, 2013 are as follows: | ||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||
Cash Flow Hedges | on Available-for- | Translation | ||||||||||||
Sale Securities | ||||||||||||||
Beginning balance | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||
Other comprehensive (loss) income before reclassifications | (594 | ) | 6,821 | 10,967 | 17,194 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 397 | (8,589 | ) | — | (8,192 | ) | ||||||||
Net current period other comprehensive income | (197 | ) | (1,768 | ) | 10,967 | 9,002 | ||||||||
Ending balance | $ | (988 | ) | $ | 66,351 | $ | 3,924 | $ | 69,287 | |||||
The changes in accumulated other comprehensive income by component for the nine months ended September 30, 2013 are as follows: | ||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||
Cash Flow Hedges | on Available-for- | Translation | ||||||||||||
Sale Securities | ||||||||||||||
Beginning balance | $ | (2,571 | ) | $ | 82,246 | $ | — | $ | 79,675 | |||||
Other comprehensive income before reclassifications | 332 | 7,360 | 3,924 | 11,616 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 1,251 | (23,255 | ) | — | (22,004 | ) | ||||||||
Net current period other comprehensive income | 1,583 | (15,895 | ) | 3,924 | (10,388 | ) | ||||||||
Ending balance | $ | (988 | ) | $ | 66,351 | $ | 3,924 | $ | 69,287 | |||||
Schedule of reclassifications out of accumulated other comprehensive income that impacted the statement of operations | ' | |||||||||||||
The reclassifications out of accumulated other comprehensive income impacted the statement of operations for the three months ended September 30, 2013 as follows: | ||||||||||||||
Details about Accumulated Other Comprehensive Income | Amounts Reclassified | Affected Line Item in the Statement of | ||||||||||||
Components | from Accumulated | Operations | ||||||||||||
Other Comprehensive | ||||||||||||||
Income | ||||||||||||||
Losses on cash flow hedges | ||||||||||||||
Interest rate contracts | $ | 397 | Interest expense | |||||||||||
Total | 397 | |||||||||||||
Unrealized gains and losses on available for sale securities | ||||||||||||||
Net realized gain/(loss) on sale of investments | (8,537 | ) | Gain on sale of investments, net | |||||||||||
OTTI | (52 | ) | OTTI | |||||||||||
Total | (8,589 | ) | ||||||||||||
Total reclassifications for the period | $ | (8,192 | ) | |||||||||||
The reclassifications out of accumulated other comprehensive income impacted the statement of operations for the nine months ended September 30, 2013 as follows: | ||||||||||||||
Details about Accumulated Other Comprehensive Income | Amounts Reclassified | Affected Line Item in the Statement of | ||||||||||||
Components | from Accumulated | Operations | ||||||||||||
Other Comprehensive | ||||||||||||||
Income | ||||||||||||||
Losses on cash flow hedges | ||||||||||||||
Interest rate contracts | 1,251 | Interest expense | ||||||||||||
Total | 1,251 | |||||||||||||
Unrealized gains and losses on available for sale securities | ||||||||||||||
Net realized gain/(loss) on sale of investments | (22,802 | ) | Gain on sale of investments, net | |||||||||||
OTTI | (453 | ) | OTTI | |||||||||||
Total | (23,255 | ) | ||||||||||||
Total reclassifications for the period | $ | (22,004 | ) | |||||||||||
Net_Income_per_Share_Tables
Net Income per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Net Income per Share | ' | |||||||||||||
Net Income (Loss) per Share | ' | |||||||||||||
The following table provides a reconciliation of both net income and the number of common shares used in the computation of basic and diluted income per share. We use the two-class method in calculating both basic and diluted earnings per share as our unvested restricted stock units (refer to Note 17) are participating securities as defined in GAAP (amounts in thousands, except share and per share amounts): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 89,715 | $ | 50,212 | $ | 214,239 | $ | 144,861 | ||||||
Net income allocated to participating securities | (310 | ) | (275 | ) | (1,133 | ) | (980 | ) | ||||||
Numerator for basic and diluted net income per share | $ | 89,405 | $ | 49,937 | $ | 213,106 | $ | 143,881 | ||||||
Basic weighted average shares outstanding | 171,520,231 | 116,673,477 | 156,614,647 | 107,077,837 | ||||||||||
Diluted weighted average shares outstanding(1) | 172,394,882 | 117,381,559 | 157,650,258 | 107,958,047 | ||||||||||
Basic income per share | $ | 0.52 | $ | 0.43 | $ | 1.36 | 1.34 | |||||||
Diluted income per share | $ | 0.52 | $ | 0.43 | $ | 1.36 | 1.34 | |||||||
(1) The weighted average number of diluted shares outstanding includes the impact of (i) unvested restricted stock units and restricted stock awards totaling 712,361 and 478,947 as of September 30, 2013 and September 30, 2012, respectively, and (ii) 99,601 and 47,736 shares that were estimated to be issued in connection with the incentive fee payable to the Manager for the quarters ended September 30, 2013 and September 30, 2012, respectively. | ||||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||||
Schedule of financial instruments carried at fair value on a recurring basis | ' | ||||||||||||||||||||||
The following table presents our financial instruments carried at fair value on a recurring basis in the consolidated balance sheet by their level in the fair value hierarchy as of September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 279,121 | $ | — | $ | — | $ | 279,121 | |||||||||||||||
RMBS | 316,261 | — | — | 316,261 | |||||||||||||||||||
CMBS | 198,146 | — | — | 198,146 | |||||||||||||||||||
Domestic servicing rights | 158,023 | — | — | 158,023 | |||||||||||||||||||
Equity securities | 15,016 | 15,016 | — | — | |||||||||||||||||||
Derivative assets | 9,513 | — | 9,513 | — | |||||||||||||||||||
VIE assets | 97,359,666 | — | — | 97,359,666 | |||||||||||||||||||
Total | $ | 98,335,746 | $ | 15,016 | $ | 9,513 | $ | 98,311,217 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 32,252 | $ | — | $ | 32,252 | $ | — | |||||||||||||||
VIE liabilities | 96,934,006 | — | 95,150,366 | 1,783,640 | |||||||||||||||||||
Total | $ | 96,966,258 | $ | — | $ | 95,182,618 | $ | 1,783,640 | |||||||||||||||
Schedule of fair value measurements using significant unobservable inputs (level III) | ' | ||||||||||||||||||||||
The changes in financial instruments classified as Level III are as follows for the three months ended September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
Loans Held- | RMBS | CMBS | Domestic | VIE assets | VIE | Total | |||||||||||||||||
for-sale | Servicing | liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
Beginning balance, June 30, 2013 | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value | 25,856 | — | 4,620 | (1,868 | ) | (4,283,956 | ) | 239,094 | (4,016,254 | ) | |||||||||||||
Impairment | — | (52 | ) | — | — | — | — | (52 | ) | ||||||||||||||
Included in other comprehensive income | — | 4,842 | 474 | — | — | — | 5,316 | ||||||||||||||||
Net accretion | — | 5,940 | — | — | — | — | 5,940 | ||||||||||||||||
Purchases / Originations | 457,468 | — | 23,871 | — | — | — | 481,339 | ||||||||||||||||
Sales | (375,204 | ) | — | — | — | — | — | (375,204 | ) | ||||||||||||||
Issuances | — | — | — | — | — | (8,760 | ) | (8,760 | ) | ||||||||||||||
Cash repayments / receipts | (175 | ) | (14,124 | ) | (163 | ) | — | — | (5,041 | ) | (19,503 | ) | |||||||||||
Transfers into Level III | — | — | 5,098 | — | — | (88,806 | ) | (83,708 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | — | — | 483,608 | 483,608 | ||||||||||||||||
Consolidations of VIEs | — | — | — | — | 4,359,149 | (69,075 | ) | 4,290,074 | |||||||||||||||
Deconsolidations of VIEs | — | — | (153 | ) | — | — | — | (153 | ) | ||||||||||||||
Ending balance, as of September 30, 2013 | $ | 279,121 | $ | 316,261 | $ | 198,146 | $ | 158,023 | $ | 97,359,666 | $ | (1,783,640 | ) | $ | 96,527,577 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at September 30, 2013 | $ | 6,011 | 7,057 | 5,428 | (1,868 | ) | (4,283,956 | ) | 239,094 | $ | (4,028,234 | ) | |||||||||||
The changes in financial instruments classified as Level III are as follows for the nine months ended September 30, 2013 (amounts in thousands): | |||||||||||||||||||||||
Loans Held- | RMBS | CMBS | Domestic | VIE assets | VIE liabilities | Total | |||||||||||||||||
for-sale | Servicing | ||||||||||||||||||||||
Rights | |||||||||||||||||||||||
Beginning balance, December 31, 2012 | $ | — | $ | 333,153 | $ | — | $ | — | $ | — | $ | — | $ | 333,153 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | — | ||||||||||||||||||||||
Change in fair value | 26,315 | 2,129 | 3,452 | 1,030 | (8,078,597 | ) | 333,542 | (7,712,129 | ) | ||||||||||||||
Impairment | — | (453 | ) | — | — | — | — | (453 | ) | ||||||||||||||
Included in other comprehensive income | — | 2,970 | 2,382 | — | — | — | 5,352 | ||||||||||||||||
Net accretion | — | 17,846 | — | — | — | — | 17,846 | ||||||||||||||||
Purchases / Originations | 848,137 | 20,090 | 23,910 | — | — | — | 892,137 | ||||||||||||||||
Sales | (851,539 | ) | (12,712 | ) | (10,072 | ) | — | — | — | (874,323 | ) | ||||||||||||
Issuances | — | — | — | — | — | (8,760 | ) | (8,760 | ) | ||||||||||||||
Cash repayments / receipts | (294 | ) | (46,762 | ) | (163 | ) | — | — | 74,694 | 27,475 | |||||||||||||
Transfers into Level III | — | — | 117,413 | — | — | (578,319 | ) | (460,906 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | — | — | 636,291 | 636,291 | ||||||||||||||||
Consolidations of VIEs | — | — | (1,208 | ) | — | 15,033,274 | (247,706 | ) | 14,784,360 | ||||||||||||||
Deconsolidations of VIEs | — | — | — | — | (584,804 | ) | 861 | (583,943 | ) | ||||||||||||||
Ending balance, as of September 30, 2013 | $ | 279,121 | $ | 316,261 | $ | 198,146 | $ | 158,023 | $ | 97,359,666 | $ | (1,783,640 | ) | $ | 96,527,577 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at September 30, 2013 | $ | 6,011 | 21,363 | 1,854 | 1,030 | (8,078,597 | ) | 333,542 | $ | (7,714,797 | ) | ||||||||||||
The following table presents our financial instruments carried at fair value on a recurring basis in the consolidated balance sheet by their level in the fair value hierarchy as of December 31, 2012 (amounts in thousands): | |||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
RMBS | $ | 333,153 | $ | — | $ | — | $ | 333,153 | |||||||||||||||
CMBS | 529,434 | — | 529,434 | — | |||||||||||||||||||
Total available-for-sale debt securities | 862,587 | — | 529,434 | 333,153 | |||||||||||||||||||
Available-for-sale equity securities: | |||||||||||||||||||||||
Real estate industry | 21,667 | 21,667 | — | — | |||||||||||||||||||
Total available-for-sale equity securities: | 21,667 | 21,667 | — | — | |||||||||||||||||||
Total investments | 884,254 | 21,667 | 529,434 | 333,153 | |||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||
Foreign exchange contracts | $ | 4,335 | $ | — | $ | 4,335 | $ | — | |||||||||||||||
Interest rate contracts | 4,892 | — | 4,892 | — | |||||||||||||||||||
Derivatives liabilities: | |||||||||||||||||||||||
Interest rate contracts | (4,343 | ) | — | (4,343 | ) | — | |||||||||||||||||
Foreign exchange contracts | (23,427 | ) | — | (23,427 | ) | — | |||||||||||||||||
Total derivatives | (18,543 | ) | — | (18,543 | ) | — | |||||||||||||||||
Total | $ | 865,711 | $ | 21,667 | $ | 510,891 | $ | 333,153 | |||||||||||||||
The changes in investments classified as Level III are as follows for the three months ended September 30, 2012 (amounts in thousands): | |||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
(Level III) | |||||||||||||||||||||||
Loans held-for-sale, at | MBS available- | Total | |||||||||||||||||||||
fair value | for-sale, at fair value | ||||||||||||||||||||||
Beginning balance, June 30, 2012 | $ | — | $ | 233,456 | $ | 233,456 | |||||||||||||||||
Purchases | — | 95,814 | 95,814 | ||||||||||||||||||||
Originations | — | — | — | ||||||||||||||||||||
Transfer out | — | — | — | ||||||||||||||||||||
Sales | — | (9,425 | ) | (9,425 | ) | ||||||||||||||||||
Maturities | — | — | — | ||||||||||||||||||||
Principal amortization | — | (18,542 | ) | (18,542 | ) | ||||||||||||||||||
Net decrease in assets | — | 67,847 | 67,847 | ||||||||||||||||||||
Gain (loss) amounts from Level III investments: | |||||||||||||||||||||||
Unrealized (loss) gain on assets | — | 30,575 | 30,575 | ||||||||||||||||||||
Realized gain on assets | — | 730 | 730 | ||||||||||||||||||||
Accretion of discount | — | 5,924 | 5,924 | ||||||||||||||||||||
OTTI | — | (637 | ) | (637 | ) | ||||||||||||||||||
Other | — | 5 | 5 | ||||||||||||||||||||
Net gain on assets | — | 36,597 | 36,597 | ||||||||||||||||||||
Ending balance, as of September 30, 2012 | $ | — | $ | 337,900 | $ | 337,900 | |||||||||||||||||
The changes in investments classified as Level III are as follows for the nine months ended September 30, 2012 (amounts in thousands): | |||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
(Level III) | |||||||||||||||||||||||
Loans held-for-sale, at | MBS available- | Total | |||||||||||||||||||||
fair value | for-sale, at fair value | ||||||||||||||||||||||
Beginning balance, January 1, 2012 | $ | 128,593 | $ | 341,734 | $ | 470,327 | |||||||||||||||||
Purchases | — | 203,433 | 203,433 | ||||||||||||||||||||
Originations | — | — | — | ||||||||||||||||||||
Transfer out | — | (176,786 | ) | (176,786 | ) | ||||||||||||||||||
Sales | (132,128 | ) | (26,049 | ) | (158,177 | ) | |||||||||||||||||
Maturities | — | — | — | ||||||||||||||||||||
Principal amortization | (122 | ) | (52,310 | ) | (52,432 | ) | |||||||||||||||||
Net decrease in assets | (132,250 | ) | (51,712 | ) | (183,962 | ) | |||||||||||||||||
Gain (loss) amounts from Level III investments: | |||||||||||||||||||||||
Unrealized (loss) gain on assets | (5,760 | ) | 34,371 | 28,611 | |||||||||||||||||||
Realized gain on assets | 9,417 | 3,643 | 13,060 | ||||||||||||||||||||
Accretion of discount | — | 12,548 | 12,548 | ||||||||||||||||||||
OTTI | — | (2,689 | ) | (2,689 | ) | ||||||||||||||||||
Other | — | 5 | 5 | ||||||||||||||||||||
Net gain on assets | 3,657 | 47,878 | 51,535 | ||||||||||||||||||||
Ending balance, as of September 30, 2012 | $ | — | $ | 337,900 | $ | 337,900 | |||||||||||||||||
Schedule of fair value of financial instruments not carried at fair value (level III) | ' | ||||||||||||||||||||||
The following table presents the fair value of our financial instruments, which are classified as Level III, including loans transferred as secured borrowings, not carried at fair value on the condensed consolidated balance sheet (amounts in thousands): | |||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value as of | Value as of | Value as of | Value as of | ||||||||||||||||||||
September 30, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2012 | ||||||||||||||||||||
Financial instruments not carried at fair value: | |||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 3,875,852 | $ | 3,974,875 | $ | 3,000,335 | $ | 3,097,089 | |||||||||||||||
Loans held-for-sale | 66,018 | 66,813 | — | — | |||||||||||||||||||
Securities, held-to-maturity | 37,370 | 37,600 | — | — | |||||||||||||||||||
European servicing rights | 29,709 | 31,448 | — | — | |||||||||||||||||||
Non-performing residential loans | 197,716 | 203,700 | 68,883 | 68,883 | |||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Secured financing agreements, loan transfer secured borrowings, and loan participation liability | $ | 1,493,726 | $ | 1,493,257 | $ | 1,393,705 | $ | 1,397,128 | |||||||||||||||
Convertible senior notes | 995,072 | 1,102,300 | — | — | |||||||||||||||||||
Schedule of quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ||||||||||||||||||||||
The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | |||||||||||||||||||||||
Quantitative Information about Level III Fair Value Measurements | |||||||||||||||||||||||
Carrying Value | Valuation Technique | Unobservable Input | Range (1) | ||||||||||||||||||||
at September 30, 2013 | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 279,121 | Discounted cash flow | Yield (b) | 4.65% - 5.61% | ||||||||||||||||||
Duration (c) | 5.0 to 10.0 years | ||||||||||||||||||||||
RMBS | 316,261 | Discounted cash flow | Constant prepayment rate (a) | (0.6)%-14.9% | |||||||||||||||||||
Constant default rate (b) | 2.0%-13.3% | ||||||||||||||||||||||
Loss severity (b) | 10%-83%(e) | ||||||||||||||||||||||
Delinquency Rate (c) | 5%-47% | ||||||||||||||||||||||
Servicer Advances (a) | 8%-100% | ||||||||||||||||||||||
Annual Coupon Deterioration (b) | 0.025%-0.18% | ||||||||||||||||||||||
Putback Amount per Projected | |||||||||||||||||||||||
Total Collateral Loss (d) | 0%-9% | ||||||||||||||||||||||
CMBS and CMBS, fair value option | 198,146 | Discounted cash flow | Yield (b) | 0% to 767.0% | |||||||||||||||||||
Duration (c) | 0 to 10.0 years | ||||||||||||||||||||||
Domestic servicing rights | 158,023 | Discounted cash flow | Debt yield (a) | 8.75% | |||||||||||||||||||
Discount rate (b) | 15% | ||||||||||||||||||||||
VIE assets | 97,359,666 | Discounted cash flow | Yield (b) | 0% to 791.8% | |||||||||||||||||||
Duration (c) | 0 to 23.5 years | ||||||||||||||||||||||
VIE liabilities | 1,783,640 | Discounted cash flow | Yield (b) | 0% to 791.8% | |||||||||||||||||||
Duration (c) | 0 to 23.5 years | ||||||||||||||||||||||
(1) The ranges of significant unobservable inputs are represented in percentages and years. | |||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
Schedule of income tax provision | ' | |||||||||||||||||||||
Our income tax provision consisted of the following for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Current | ||||||||||||||||||||||
Federal | $ | 11,465 | $ | 244 | 21,396 | $ | 682 | |||||||||||||||
Foreign | 1,011 | — | 1,581 | — | ||||||||||||||||||
State | 1,892 | 57 | 3,753 | 158 | ||||||||||||||||||
Total current | 14,368 | 301 | 26,730 | 840 | ||||||||||||||||||
Deferred | ||||||||||||||||||||||
Federal | 59 | — | 122 | — | ||||||||||||||||||
Foreign | (716 | ) | — | (1,181 | ) | — | ||||||||||||||||
State | 10 | — | 20 | — | ||||||||||||||||||
Total deferred | (647 | ) | — | (1,039 | ) | — | ||||||||||||||||
Total income tax provision | $ | 13,721 | $ | 301 | $ | 25,691 | $ | 840 | ||||||||||||||
Schedule of tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities | ' | |||||||||||||||||||||
The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | ||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||
U.S. | ||||||||||||||||||||||
Deferred tax asset, net | ||||||||||||||||||||||
Reserves and accruals | $ | 10,595 | $ | — | ||||||||||||||||||
Domestic intangible assets | (4,844 | ) | — | |||||||||||||||||||
Investment securities and loans | (165 | ) | — | |||||||||||||||||||
Investment in unconsolidated entities | (2,102 | ) | — | |||||||||||||||||||
Deferred income | 39 | — | ||||||||||||||||||||
Other U.S. temporary differences | (287 | ) | — | |||||||||||||||||||
3,236 | — | |||||||||||||||||||||
Europe | ||||||||||||||||||||||
Deferred tax liability, net | — | |||||||||||||||||||||
European servicing rights | (7,368 | ) | — | |||||||||||||||||||
Net operating and capital loss carryforwards | 9,935 | — | ||||||||||||||||||||
Valuation allowance | (9,935 | ) | — | |||||||||||||||||||
Other European temporary differences | 215 | — | ||||||||||||||||||||
(7,153 | ) | — | ||||||||||||||||||||
Net deferred tax assets (liabilities) | $ | (3,917 | ) | $ | — | |||||||||||||||||
Schedule of reconciliation of federal income tax determined using statutory federal tax rate to reported income tax provision | ' | |||||||||||||||||||||
The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three and nine months ended September 30, 2013 and 2012 (dollar amounts in thousands): | ||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Federal statutory tax rate | $ | 36,933 | 35 | % | $ | 17,725 | 35 | % | $ | 85,489 | 35 | % | $ | 51,131 | 35 | % | ||||||
REIT and other non-taxable income | (24,886 | ) | (23.6 | )% | (17,481 | ) | (34.5 | )% | (62,818 | ) | (25.7 | )% | (50,449 | ) | (34.5 | )% | ||||||
State income taxes | 1,902 | 1.8 | % | 57 | 0.1 | % | 3,774 | 1.5 | % | 158 | 0.1 | % | ||||||||||
Federal benefit of state tax deduction | (666 | ) | (0.6 | )% | — | — | % | (1,321 | ) | (0.5 | )% | — | — | % | ||||||||
Other | 438 | 0.4 | % | — | — | % | 567 | 0.2 | % | — | — | % | ||||||||||
Effective tax rate | $ | 13,721 | 13 | % | $ | 301 | 0.6 | % | $ | 25,691 | 10.5 | % | $ | 840 | 0.6 | % | ||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Segment Reporting | ' | |||||||||||||||||||
Schedule of results of operations by business segment | ' | |||||||||||||||||||
The table below presents our results of operations for the three months ended September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 90,837 | $ | — | $ | 3,208 | $ | 94,045 | $ | — | $ | 94,045 | ||||||||
Interest income from investment securities | 12,301 | — | 18,792 | 31,093 | (13,289 | ) | 17,804 | |||||||||||||
Servicing fees | — | — | 59,566 | 59,566 | (23,057 | ) | 36,509 | |||||||||||||
Other revenues | 116 | 75 | 2,229 | 2,420 | (322 | ) | 2,098 | |||||||||||||
Rental income | — | 5,080 | — | 5,080 | — | 5,080 | ||||||||||||||
Total revenues | 103,254 | 5,155 | 83,795 | 192,204 | (36,668 | ) | 155,536 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 15,581 | 3,310 | 5,298 | 24,189 | 46 | 24,235 | ||||||||||||||
Interest expense | 29,866 | 2,287 | 4,590 | 36,743 | — | 36,743 | ||||||||||||||
General and administrative | 3,748 | 652 | 43,752 | 48,152 | 183 | 48,335 | ||||||||||||||
Business combination costs | 342 | — | — | 342 | — | 342 | ||||||||||||||
Acquisition and investment pursuit costs | 742 | 223 | 212 | 1,177 | — | 1,177 | ||||||||||||||
Residential segment, other operating costs | — | 6,023 | — | 6,023 | — | 6,023 | ||||||||||||||
Depreciation and amortization | — | 1,553 | 3,435 | 4,988 | — | 4,988 | ||||||||||||||
Loan loss allowance | 1,160 | — | — | 1,160 | — | 1,160 | ||||||||||||||
Other expense | 59 | — | 245 | 304 | — | 304 | ||||||||||||||
Total costs and expenses | 51,498 | 14,048 | 57,532 | 123,078 | 229 | 123,307 | ||||||||||||||
Income before other income (loss), income taxes and non-controlling interests | 51,756 | (8,893 | ) | 26,263 | 69,126 | (36,897 | ) | 32,229 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 47,963 | 47,963 | ||||||||||||||
Change in fair value of servicing rights | — | — | (3,939 | ) | (3,939 | ) | 2,072 | (1,867 | ) | |||||||||||
Change in fair value of investment securities, net | (157 | ) | — | 9,820 | 9,663 | (11,941 | ) | (2,278 | ) | |||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | — | 25,857 | 25,857 | — | 25,857 | ||||||||||||||
Earnings from unconsolidated entities | 896 | — | 4,459 | 5,355 | (778 | ) | 4,577 | |||||||||||||
Gain on sale of investments, net | 6,184 | 1,875 | — | 8,059 | — | 8,059 | ||||||||||||||
Loss on derivative financial instruments, net | (17,166 | ) | — | (5,285 | ) | (22,451 | ) | — | (22,451 | ) | ||||||||||
Foreign currency gain, net | 9,555 | — | 25 | 9,580 | — | 9,580 | ||||||||||||||
OTTI | (52 | ) | — | — | (52 | ) | — | (52 | ) | |||||||||||
Other income | — | 3,320 | 385 | 3,705 | — | 3,705 | ||||||||||||||
Total other income (loss) | (740 | ) | 5,195 | 31,322 | 35,777 | 37,316 | 73,093 | |||||||||||||
Income (loss) before income taxes | 51,016 | (3,698 | ) | 57,585 | 104,903 | 419 | 105,322 | |||||||||||||
Income tax provision | 619 | — | 13,102 | 13,721 | — | 13,721 | ||||||||||||||
Net income (loss) | 50,397 | (3,698 | ) | 44,483 | 91,182 | 419 | 91,601 | |||||||||||||
Net income attributable to non-controlling interests | 1,451 | 16 | — | 1,467 | 419 | 1,886 | ||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 48,946 | $ | (3,714 | ) | $ | 44,483 | $ | 89,715 | $ | — | $ | 89,715 | |||||||
The table below presents our results of operations for the three months ended September 30, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family Residential | Total | ||||||||||||||||||
Investment Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 56,261 | $ | — | $ | 56,261 | ||||||||||||||
Interest income from investment securities | 16,585 | — | 16,585 | |||||||||||||||||
Other revenues | 64 | 2 | 66 | |||||||||||||||||
Rental income | — | 59 | 59 | |||||||||||||||||
Total revenues | 72,910 | 61 | 72,971 | |||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 14,563 | 96 | 14,659 | |||||||||||||||||
Interest expense | 12,030 | — | 12,030 | |||||||||||||||||
General and administrative | 3,084 | — | 3,084 | |||||||||||||||||
Acquisition and investment pursuit costs | 465 | 157 | 622 | |||||||||||||||||
Residential segment, other operating costs | — | 327 | 327 | |||||||||||||||||
Depreciation and amortization | — | 78 | 78 | |||||||||||||||||
Total costs and expenses | 30,142 | 658 | 30,800 | |||||||||||||||||
Income before other income (loss), income taxes and non-controlling interests | 42,768 | (597 | ) | 42,171 | ||||||||||||||||
Other income: | ||||||||||||||||||||
Earnings from unconsolidated entities | 787 | — | 787 | |||||||||||||||||
Gain (loss) on sale of investments, net | 9,019 | (2 | ) | 9,017 | ||||||||||||||||
Loss on derivative financial instruments, net | (7,561 | ) | — | (7,561 | ) | |||||||||||||||
Foreign currency gain, net | 6,725 | — | 6,725 | |||||||||||||||||
OTTI | (676 | ) | — | (676 | ) | |||||||||||||||
Other income | 180 | — | 180 | |||||||||||||||||
Total other income (loss) | 8,474 | (2 | ) | 8,472 | ||||||||||||||||
Income (loss) before income taxes | 51,242 | (599 | ) | 50,643 | ||||||||||||||||
Income tax provision | 301 | — | 301 | |||||||||||||||||
Net income (loss) | 50,941 | (599 | ) | 50,342 | ||||||||||||||||
Net income attributable to non-controlling interests | 130 | — | 130 | |||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 50,811 | $ | (599 | ) | $ | 50,212 | |||||||||||||
The table below presents our results of operations for the nine months ended September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Family | |||||||||||||||||||
Lending | Residential | |||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 231,203 | $ | — | $ | 5,468 | $ | 236,671 | $ | — | $ | 236,671 | ||||||||
Interest income from investment securities | 42,179 | — | 30,550 | 72,729 | (20,108 | ) | 52,621 | |||||||||||||
Servicing fees | — | — | 112,426 | 112,426 | (36,782 | ) | 75,644 | |||||||||||||
Other revenues | 291 | 180 | 4,201 | 4,672 | (595 | ) | 4,077 | |||||||||||||
Rental income | — | 8,733 | — | 8,733 | — | 8,733 | ||||||||||||||
Total revenues | 273,673 | 8,913 | 152,645 | 435,231 | (57,485 | ) | 377,746 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 44,504 | 6,535 | 7,572 | 58,611 | 64 | 58,675 | ||||||||||||||
Interest expense | 66,794 | 3,587 | 7,297 | 77,678 | — | 77,678 | ||||||||||||||
General and administrative | 11,401 | 1,713 | 84,325 | 97,439 | 330 | 97,769 | ||||||||||||||
Business combination costs | 17,958 | — | — | 17,958 | — | 17,958 | ||||||||||||||
Acquisition and investment pursuit costs | 1,787 | 2,105 | 603 | 4,495 | — | 4,495 | ||||||||||||||
Residential segment, other operating costs | — | 10,622 | — | 10,622 | — | 10,622 | ||||||||||||||
Depreciation and amortization | — | 2,981 | 5,663 | 8,644 | — | 8,644 | ||||||||||||||
Loan loss allowance | 1,915 | — | — | 1,915 | — | 1,915 | ||||||||||||||
Other expense | 150 | — | 383 | 533 | — | 533 | ||||||||||||||
Total costs and expenses | 144,509 | 27,543 | 105,843 | 277,895 | 394 | 278,289 | ||||||||||||||
Income (loss) before other income, income taxes and non-controlling interests | 129,164 | (18,630 | ) | 46,802 | 157,336 | (57,879 | ) | 99,457 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 79,912 | 79,912 | ||||||||||||||
Change in fair value of servicing rights | — | — | 2,175 | 2,175 | (1,144 | ) | 1,031 | |||||||||||||
Change in fair value of investment securities, net | (83 | ) | — | 16,208 | 16,125 | (19,390 | ) | (3,265 | ) | |||||||||||
Change in fair value of mortgage loans held-for-sale, net | — | — | 26,315 | 26,315 | — | 26,315 | ||||||||||||||
Earnings from unconsolidated entities | 3,488 | — | 8,401 | 11,889 | (974 | ) | 10,915 | |||||||||||||
Gain on sale of investments, net | 19,690 | 3,278 | — | 22,968 | — | 22,968 | ||||||||||||||
Gain (loss) on derivative financial instruments, net | (2,939 | ) | — | 2,874 | (65 | ) | — | (65 | ) | |||||||||||
Foreign currency gain (loss), net | 3,537 | — | (42 | ) | 3,495 | — | 3,495 | |||||||||||||
OTTI | (453 | ) | — | — | (453 | ) | — | (453 | ) | |||||||||||
Other income | — | 3,320 | 424 | 3,744 | — | 3,744 | ||||||||||||||
Total other income | 23,240 | 6,598 | 56,355 | 86,193 | 58,404 | 144,597 | ||||||||||||||
Income (loss) before income taxes | 152,404 | (12,032 | ) | 103,157 | 243,529 | 525 | 244,054 | |||||||||||||
Income tax provision | 1,645 | 12 | 24,034 | 25,691 | — | 25,691 | ||||||||||||||
Net income (loss) | 150,759 | (12,044 | ) | 79,123 | 217,838 | 525 | 218,363 | |||||||||||||
Net income attributable to non-controlling interests | 3,599 | — | — | 3,599 | 525 | 4,124 | ||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 147,160 | $ | (12,044 | ) | $ | 79,123 | $ | 214,239 | $ | — | $ | 214,239 | |||||||
The table below presents our results of operations for the nine months ended September 30, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family Residential | Total | ||||||||||||||||||
Investment Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 179,078 | $ | — | $ | 179,078 | ||||||||||||||
Interest income from investment securities | 40,404 | — | 40,404 | |||||||||||||||||
Other revenues | 178 | 2 | 180 | |||||||||||||||||
Rental income | 59 | 59 | ||||||||||||||||||
Total revenues | 219,660 | 61 | 219,721 | |||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 42,526 | 147 | 42,673 | |||||||||||||||||
Interest expense | 34,345 | — | 34,345 | |||||||||||||||||
General and administrative | 8,838 | — | 8,838 | |||||||||||||||||
Acquisition and investment pursuit costs | 2,032 | 705 | 2,737 | |||||||||||||||||
Residential segment, other operating costs | — | 327 | 327 | |||||||||||||||||
Depreciation and amortization | — | 78 | 78 | |||||||||||||||||
Total costs and expenses | 87,741 | 1,257 | 88,998 | |||||||||||||||||
Income (loss) before other income (loss), income taxes and non-controlling interests | 131,919 | (1,196 | ) | 130,723 | ||||||||||||||||
Other income: | ||||||||||||||||||||
Change in fair value of mortgage loans held-for-sale | (5,760 | ) | — | (5,760 | ) | |||||||||||||||
Earnings from unconsolidated entities | 2,739 | — | 2,739 | |||||||||||||||||
Gain (loss) on sale of investments, net | 19,149 | (2 | ) | 19,147 | ||||||||||||||||
Loss on derivative financial instruments, net | (9,784 | ) | — | (9,784 | ) | |||||||||||||||
Foreign currency gain, net | 11,222 | — | 11,222 | |||||||||||||||||
OTTI | (2,728 | ) | — | (2,728 | ) | |||||||||||||||
Other income | 530 | — | 530 | |||||||||||||||||
Total other income (loss) | 15,368 | (2 | ) | 15,366 | ||||||||||||||||
Income (loss) before income taxes | 147,287 | (1,198 | ) | 146,089 | ||||||||||||||||
Income tax provision | 840 | — | 840 | |||||||||||||||||
Net income (loss) | 146,447 | (1,198 | ) | 145,249 | ||||||||||||||||
Net income attributable to non-controlling interests | 388 | — | 388 | |||||||||||||||||
Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 146,059 | $ | (1,198 | ) | $ | 144,861 | |||||||||||||
Schedule of condensed consolidated balance sheet by business segment | ' | |||||||||||||||||||
The table below presents our condensed consolidated balance sheet as of September 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | Single Family | LNR | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 282,553 | $ | 30,089 | $ | 223,915 | $ | 536,557 | $ | 277 | $ | 536,834 | ||||||||
Restricted cash | 38,052 | 1,836 | 42,818 | 82,706 | — | 82,706 | ||||||||||||||
Loans held-for-investment, net | 3,782,479 | — | 7,783 | 3,790,262 | — | 3,790,262 | ||||||||||||||
Loans held-for-sale | 66,018 | — | 279,121 | 345,139 | — | 345,139 | ||||||||||||||
Loans transferred as secured borrowings | 85,590 | — | — | 85,590 | — | 85,590 | ||||||||||||||
Investment securities | 481,082 | — | 410,071 | 891,153 | (324,360 | ) | 566,793 | |||||||||||||
Intangible assets — servicing rights | — | — | 276,295 | 276,295 | (88,563 | ) | 187,732 | |||||||||||||
Residential real estate, net | — | 548,022 | — | 548,022 | — | 548,022 | ||||||||||||||
Non-performing residential loans | — | 197,716 | — | 197,716 | — | 197,716 | ||||||||||||||
Investment in unconsolidated entities | 35,413 | — | 106,675 | 142,088 | (3,920 | ) | 138,168 | |||||||||||||
Goodwill | — | — | 107,099 | 107,099 | — | 107,099 | ||||||||||||||
Derivative assets | 6,582 | — | 2,931 | 9,513 | — | 9,513 | ||||||||||||||
Accrued interest receivable | 20,679 | — | 273 | 20,952 | — | 20,952 | ||||||||||||||
Other assets | 41,415 | 18,882 | 38,799 | 99,096 | (713 | ) | 98,383 | |||||||||||||
VIE assets, at fair value | — | — | — | — | 97,359,666 | 97,359,666 | ||||||||||||||
Total Assets | $ | 4,839,863 | $ | 796,545 | $ | 1,495,780 | $ | 7,132,188 | $ | 96,942,387 | $ | 104,074,575 | ||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 55,953 | $ | 10,489 | $ | 122,512 | $ | 188,954 | $ | 218 | $ | 189,172 | ||||||||
Related-party payable | 20,780 | — | 6,008 | 26,788 | — | 26,788 | ||||||||||||||
Dividends payable | 90,130 | — | — | 90,130 | — | 90,130 | ||||||||||||||
Derivative liabilities | 27,082 | — | 5,170 | 32,252 | — | 32,252 | ||||||||||||||
Secured financing agreements, net | 1,107,211 | — | 204,833 | 1,312,044 | — | 1,312,044 | ||||||||||||||
Convertible senior notes, net | 995,072 | — | — | 995,072 | — | 995,072 | ||||||||||||||
Loan transfer secured borrowings | 86,682 | — | — | 86,682 | — | 86,682 | ||||||||||||||
Loan participation liability | 95,000 | — | — | 95,000 | — | 95,000 | ||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 96,934,006 | 96,934,006 | ||||||||||||||
Total Liabilities | 2,477,910 | 10,489 | 338,523 | 2,826,922 | 96,934,224 | 99,761,146 | ||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||
Common stock | 1,959 | — | — | 1,959 | — | 1,959 | ||||||||||||||
Additional paid-in capital | 2,320,035 | 791,817 | 1,183,206 | 4,295,058 | — | 4,295,058 | ||||||||||||||
Treasury stock | (10,642 | ) | — | — | (10,642 | ) | — | (10,642 | ) | |||||||||||
Accumulated other comprehensive income | 64,955 | — | 4,332 | 69,287 | — | 69,287 | ||||||||||||||
Accumulated deficit | (47,800 | ) | (7,258 | ) | (30,281 | ) | (85,339 | ) | — | (85,339 | ) | |||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,328,507 | 784,559 | 1,157,257 | 4,270,323 | — | 4,270,323 | ||||||||||||||
Non-controlling interests in consolidated subsidiaries | 33,446 | 1,497 | — | 34,943 | 8,163 | 43,106 | ||||||||||||||
Total Equity | 2,361,953 | 786,056 | 1,157,257 | 4,305,266 | 8,163 | 4,313,429 | ||||||||||||||
Total Liabilities and Equity | $ | 4,839,863 | $ | 796,545 | $ | 1,495,780 | $ | 7,132,188 | $ | 96,942,387 | $ | 104,074,575 | ||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2012 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate Investment | Single Family Residential | Total | ||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 169,427 | $ | 8,244 | $ | 177,671 | ||||||||||||||
Restricted cash | 3,298 | 131 | 3,429 | |||||||||||||||||
Loans held-for-investment, net | 2,914,434 | — | 2,914,434 | |||||||||||||||||
Loans held-for-sale | — | — | — | |||||||||||||||||
Loans transferred as secured borrowings | 85,901 | — | 85,901 | |||||||||||||||||
Investment securities | 884,254 | — | 884,254 | |||||||||||||||||
Intangible assets — servicing rights | — | — | — | |||||||||||||||||
Residential real estate, net | — | 99,115 | 99,115 | |||||||||||||||||
Non-performing residential loans | — | 68,883 | 68,883 | |||||||||||||||||
Investment in unconsolidated entities | 32,318 | — | 32,318 | |||||||||||||||||
Goodwill | — | — | — | |||||||||||||||||
Derivative assets | 9,227 | — | 9,227 | |||||||||||||||||
Accrued interest receivable | 24,120 | — | 24,120 | |||||||||||||||||
Other assets | 19,299 | 5,722 | 25,021 | |||||||||||||||||
VIE assets, at fair value | — | — | — | |||||||||||||||||
Total Assets | $ | 4,142,278 | $ | 182,095 | $ | 4,324,373 | ||||||||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 28,987 | 1,107 | 30,094 | ||||||||||||||||
Related-party payable | 1,803 | — | 1,803 | |||||||||||||||||
Dividends payable | 73,796 | — | 73,796 | |||||||||||||||||
Derivative liabilities | 27,770 | — | 27,770 | |||||||||||||||||
Secured financing agreements, net | 1,305,812 | — | 1,305,812 | |||||||||||||||||
Convertible senior notes, net | — | — | — | |||||||||||||||||
Loan transfer secured borrowings | 87,893 | — | 87,893 | |||||||||||||||||
VIE liabilities, at fair value | — | — | — | |||||||||||||||||
Total Liabilities | 1,526,061 | 1,107 | 1,527,168 | |||||||||||||||||
Commitments and contingencies | — | — | — | |||||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | |||||||||||||||||
Common stock | 1,361 | — | 1,361 | |||||||||||||||||
Additional paid-in capital | 2,538,860 | 182,493 | 2,721,353 | |||||||||||||||||
Treasury stock | (10,642 | ) | — | (10,642 | ) | |||||||||||||||
Accumulated other comprehensive income | 79,675 | — | 79,675 | |||||||||||||||||
Accumulated deficit | (70,396 | ) | (2,005 | ) | (72,401 | ) | ||||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,538,858 | 180,488 | 2,719,346 | |||||||||||||||||
Non-controlling interests in consolidated subsidiaries | 77,359 | 500 | 77,859 | |||||||||||||||||
Total Equity | 2,616,217 | 180,988 | 2,797,205 | |||||||||||||||||
Total Liabilities and Equity | $ | 4,142,278 | $ | 182,095 | $ | 4,324,373 |
Business_and_Organization_Deta
Business and Organization (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | |
LNR | LNR | ||
Business and Organization | ' | ' | ' |
Minimum annual REIT taxable income distributable to stockholders (as a percent) | 90.00% | ' | ' |
Acquisition of LNR Property LLC | ' | ' | ' |
Initial agreed upon purchase price | ' | ' | $859,000,000 |
Net purchase price | ' | ' | 730,518,000 |
Cost of remaining net assets of acquiree purchased by an affiliate | ' | ' | 194,000,000 |
Assets owned by TRS entities | ' | $1,100,000,000 | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
segment | segment | |||||
Summary of Significant Accounting Policies | ' | ' | ' | ' | ' | ' |
Number of reportable segments | ' | ' | 1 | 3 | ' | ' |
Initial term of residential leases | ' | ' | ' | ' | '1 year | ' |
Maximum measurement period | ' | ' | ' | ' | '1 year | ' |
Goodwill and Intangible Assets | ' | ' | ' | ' | ' | ' |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | $0 | ' |
Fair Value Measurements | ' | ' | ' | ' | ' | ' |
Permitted reinvestment under static investment in VIEs | 0 | ' | ' | 0 | 0 | ' |
Maximum ownership percentage to classify investments as cost method investments | ' | ' | ' | ' | 20.00% | ' |
Underwriting Commissions and Offering Costs | ' | ' | ' | ' | ' | ' |
Underwriting and offering costs | 300,000 | 2,300,000 | ' | ' | 955,000 | 2,250,000 |
Non-performing residential loans | ' | ' | ' | ' | ' | ' |
Residential Real Estate | ' | ' | ' | ' | ' | ' |
Impairments of loans | $0 | ' | ' | ' | ' | ' |
Furniture and fixtures | ' | ' | ' | ' | ' | ' |
Residential Real Estate | ' | ' | ' | ' | ' | ' |
Depreciable life | ' | ' | ' | ' | '5 years | ' |
Buildings | ' | ' | ' | ' | ' | ' |
Residential Real Estate | ' | ' | ' | ' | ' | ' |
Depreciable life | ' | ' | ' | ' | '30 years | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Consolidated Balance Sheet | ' | ' | ' | ' | ' |
Investment securities | $566,793 | ' | $566,793 | ' | $884,254 |
Residential real estate, net | 548,022 | ' | 548,022 | ' | 99,115 |
Non-performing residential loans | 197,716 | ' | 197,716 | ' | 68,883 |
Investment in unconsolidated entities | 138,168 | ' | 138,168 | ' | 32,318 |
Accounts payable, accrued expenses and other liabilities combined from Other liabilities | 189,172 | ' | 189,172 | ' | 30,094 |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' |
Other revenues | 2,098 | 66 | 4,077 | 180 | ' |
Earnings from unconsolidated entities | 4,577 | 787 | 10,915 | 2,739 | ' |
Rental income | 5,080 | 59 | 8,733 | 59 | ' |
Residential segment, other operating costs | 6,023 | 327 | 10,622 | 327 | ' |
Depreciation and amortization | 4,988 | 78 | 8,644 | 78 | ' |
Other income | 3,705 | 180 | 3,744 | 530 | ' |
Loss on derivative financial instruments | -22,451 | -7,561 | -65 | -9,784 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | ' | 3,481 | 11,516 | ' |
Foreign currency gain, net | 9,580 | 6,725 | 3,495 | 11,222 | ' |
Condensed Consolidated Statements of Cash Flows | ' | ' | ' | ' | ' |
Gain on sale of investments | ' | ' | ' | -19,274 | ' |
Change in fair value of derivatives | ' | ' | -2,196 | 3,328 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | ' | 3,481 | 11,516 | ' |
Origination and purchase of loans held-for-investment | ' | ' | -1,658,240 | -943,330 | ' |
Proceeds from principal collections on loans | ' | ' | 394,616 | 494,307 | ' |
Amount As Previously Reported | ' | ' | ' | ' | ' |
Consolidated Balance Sheet | ' | ' | ' | ' | ' |
Mortgage-backed securities, available-for-sale, at fair value | ' | ' | ' | ' | 862,587 |
Other investments | ' | ' | ' | ' | 221,983 |
Accounts payable and accrued expenses | ' | ' | ' | ' | 8,890 |
Other liabilities | ' | ' | ' | ' | 21,204 |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' |
Interest income from cash balances | ' | 66 | ' | 180 | ' |
Other income | ' | 621 | ' | 2,923 | ' |
Net gains (losses) on currency hedges | ' | -7,510 | ' | -10,392 | ' |
Net gains (losses) on interest rate hedges | ' | -51 | ' | 608 | ' |
Net realized foreign currency gains (losses) | ' | -337 | ' | 8,515 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | 7,062 | ' | 2,707 | ' |
Condensed Consolidated Statements of Cash Flows | ' | ' | ' | ' | ' |
Gain on sale of available-for-sale securities | ' | ' | ' | -12,097 | ' |
Gain on sale of loans | ' | ' | ' | -7,177 | ' |
Unrealized gains (losses) on interest rate hedges | ' | ' | ' | -9,991 | ' |
Unrealized losses on currency hedges | ' | ' | ' | 13,319 | ' |
Gain on foreign currency remeasurement | ' | ' | ' | -8,809 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | 7,062 | ' | 2,707 | ' |
Purchased interest on investments | ' | ' | ' | -638 | ' |
Origination and purchase of loans held-for-investment | ' | ' | ' | -942,692 | ' |
Loan maturities | ' | ' | ' | 460,789 | ' |
Loan investment principal repayments | ' | ' | ' | 33,518 | ' |
Reclassification Adjustment | ' | ' | ' | ' | ' |
Consolidated Balance Sheet | ' | ' | ' | ' | ' |
Mortgage-backed securities, available-for-sale, at fair value | ' | ' | ' | ' | -862,587 |
Investment securities reclassified from Mortgage-backed securities, available-for-sale, at fair value | ' | ' | ' | ' | 862,587 |
Investment securities reclassified from Other investments | ' | ' | ' | ' | 21,667 |
Other investments reclassified to Investment securities | ' | ' | ' | ' | -21,667 |
Other investments reclassified to residential real estate and non-performing residential loans | ' | ' | ' | ' | -167,998 |
Other investments reclassified to Investments in unconsolidated entities | ' | ' | ' | ' | 32,318 |
Residential real estate, net | ' | ' | ' | ' | 99,115 |
Non-performing residential loans | ' | ' | ' | ' | 68,883 |
Investment in unconsolidated entities | ' | ' | ' | ' | 32,318 |
Accounts payable, accrued expenses and other liabilities combined from Accounts payable and accrued expenses | ' | ' | ' | ' | 21,204 |
Accounts payable, accrued expenses and other liabilities combined from Other liabilities | ' | ' | ' | ' | 8,890 |
Accounts payable and accrued expenses | ' | ' | ' | ' | -8,890 |
Other liabilities | ' | ' | ' | ' | -21,204 |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' |
Other revenues | ' | 66 | ' | 180 | ' |
Interest income from cash balances | ' | -66 | ' | -180 | ' |
Earnings from unconsolidated entities | ' | 787 | ' | 2,739 | ' |
Rental income | ' | 59 | ' | 59 | ' |
Residential segment, other operating costs | ' | 327 | ' | 327 | ' |
Depreciation and amortization | ' | 78 | ' | 78 | ' |
Other income | ' | -441 | ' | ' | ' |
Net gains (losses) on currency hedges | ' | 7,510 | ' | 10,392 | ' |
Net gains (losses) on interest rate hedges | ' | 51 | ' | -608 | ' |
Loss on derivative financial instruments | ' | -7,561 | ' | -9,784 | ' |
Net realized foreign currency gains (losses) | ' | 337 | ' | -8,515 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | -7,062 | ' | -2,707 | ' |
Foreign currency gain, net | ' | 6,725 | ' | 11,222 | ' |
Condensed Consolidated Statements of Cash Flows | ' | ' | ' | ' | ' |
Gain on sale of available-for-sale securities | ' | ' | ' | 12,097 | ' |
Gain on sale of loans | ' | ' | ' | 7,177 | ' |
Gain on sale of investments | ' | ' | ' | -19,274 | ' |
Unrealized gains (losses) on interest rate hedges | ' | ' | ' | 9,991 | ' |
Unrealized losses on currency hedges | ' | ' | ' | -13,319 | ' |
Change in fair value of derivatives | ' | ' | ' | 3,328 | ' |
Gain on foreign currency remeasurement | ' | ' | ' | 8,809 | ' |
Unrealized foreign currency remeasurement (losses) gains | ' | -7,062 | ' | -2,707 | ' |
Purchased interest on investments | ' | ' | ' | 638 | ' |
Origination and purchase of loans held-for-investment | ' | ' | ' | -638 | ' |
Loan maturities | ' | ' | ' | -460,789 | ' |
Loan investment principal repayments | ' | ' | ' | -33,518 | ' |
Proceeds from principal collections on loans | ' | ' | ' | $494,307 | ' |
Acquisition_of_LNR_Property_LL2
Acquisition of LNR Property LLC (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 19, 2013 | Apr. 19, 2013 | Apr. 19, 2013 | Apr. 19, 2013 | |
LNR | LNR | LNR | LNR | LNR | LNR | LNR | LNR | LNR | |||||
Initial Provisional Amounts | Measurement Period Adjustments | Credit facility | |||||||||||
Allocation of the purchase price of the assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial agreed upon purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | $859,000,000 | ' | ' | ' |
Assets acquired: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | ' | 143,771,000 | 143,771,000 | ' | ' |
Restricted cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,413,000 | 24,413,000 | ' | ' |
Loans held-for-investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,015,000 | 8,015,000 | ' | ' |
Loans held-for-sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | 256,502,000 | 256,502,000 | ' | ' |
Investment securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 314,471,000 | 314,471,000 | ' | ' |
Intangible assets - servicing rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | 276,989,000 | 276,989,000 | ' | ' |
Investment in unconsolidated entities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,418,000 | 97,588,000 | -1,170,000 | ' |
Derivative assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,103,000 | 3,103,000 | ' | ' |
Interest receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,315,000 | 1,315,000 | ' | ' |
Other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,701,000 | 60,853,000 | -152,000 | ' |
Total assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,185,698,000 | 1,187,020,000 | -1,322,000 | ' |
Liabilities assumed: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 123,548,000 | 118,621,000 | 4,927,000 | ' |
Secured financing agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | 438,377,000 | 438,377,000 | ' | ' |
Derivative liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 354,000 | 354,000 | ' | ' |
Total liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | 562,279,000 | 557,352,000 | 4,927,000 | ' |
Net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 623,419,000 | 629,668,000 | -6,249,000 | ' |
Goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | 730,518,000 | 730,518,000 | ' | ' |
Provisional estimates of the fair value of net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 623,419,000 | 629,668,000 | -6,249,000 | ' |
Goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | 107,099,000 | 100,850,000 | 6,249,000 | ' |
Repayment of senior debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 268,900,000 |
Revenues recognized | 155,536,000 | 72,971,000 | 377,746,000 | 219,721,000 | ' | ' | 152,600,000 | ' | ' | ' | ' | ' | ' |
Net earnings recognized | 91,601,000 | 50,342,000 | 218,363,000 | 145,249,000 | ' | ' | 79,800,000 | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | 342,000 | ' | 17,958,000 | ' | 300,000 | ' | ' | 18,000,000 | ' | ' | ' | ' | ' |
Pro forma revenue and net earnings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | 155,536,000 | 150,058,000 | ' | 459,856,000 | 416,109,000 | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | 97,288,000 | 112,757,000 | ' | 299,338,000 | 263,908,000 | ' | ' | ' | ' |
Net interest expense addition (deduction) | ' | ' | ' | ' | ' | -1,416,000 | ' | 752,000 | -4,385,000 | ' | ' | ' | ' |
Non-recurring acquisition costs addition (deduction) | ' | ' | ' | ' | -7,291,000 | 7,699,000 | ' | -125,936,000 | 23,097,000 | ' | ' | ' | ' |
Income tax provision addition | ' | ' | ' | ' | 1,604,000 | 15,722,000 | ' | 15,577,000 | 28,647,000 | ' | ' | ' | ' |
Management fee expense addition | ' | ' | ' | ' | ' | $23,164,000 | ' | $18,657,000 | $32,907,000 | ' | ' | ' | ' |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
LNR | |||
Restricted cash | ' | ' | ' |
Assumed escrow deposit funded by the sellers on behalf of certain employees | ' | ' | $23,100,000 |
Threshold period for employees on involuntary termination or employees rendering of service for cash payment from escrow account | ' | ' | '9 months |
Cash collateralized for certain obligations funded by the reporting entity | ' | ' | 3,300,000 |
Remaining cash amount collateralized for certain obligations funded by affiliate | ' | ' | 6,200,000 |
Offsetting payable to affiliate | 6,200,000 | ' | ' |
Restricted cash | ' | ' | ' |
Funds held in escrow for employees | 19,587,000 | ' | ' |
Cash collateral for derivative financial instruments | 14,608,000 | ' | ' |
Cash collateral for performance obligations | 9,482,000 | ' | ' |
Funds held in escrow on behalf of borrowers and other | 39,029,000 | 3,429,000 | ' |
Restricted cash | $82,706,000 | $3,429,000 | ' |
Loans_Details
Loans (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 13, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 12, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 13, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
LNR | 1-month LIBOR | 1-month LIBOR | One-month Citibank LIBOR | Three-month Citibank LIBOR | 3 Month EURIBOR | 3 Month EURIBOR | LIBOR floor | LIBOR floor | LIBOR floor | LIBOR floor | LIBOR floor | LIBOR floor | Rating 2 | Rating 2 | Rating 3 | Rating 3 | Rating 4 | Rating 4 | Rating 5 | Rating 5 | Not Rated | Total loans held-for-investment | Total loans held-for-investment | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | First Mortgages: | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Subordinated mortgages | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Mezzanine Loans | Loans Held-for-sale | Loans Held-for-sale | Loans Held-for-sale | First mortgages held-for-sale, lower of cost or fair value | First mortgages held-for-sale, fair value option elected | Loans transferred as secured borrowings | Loans transferred as secured borrowings | Loans transferred as secured borrowings | Loans transferred as secured borrowings | Loans transferred as secured borrowings | Loans transferred as secured borrowings | Loans prepaid | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | Recapitalization of existing loan with first mortgage | First Mortgages loan with strategic partner | A-note | EUR-denominated first mortgage loan | EUR-denominated first mortgage loan | EUR-denominated first mortgage loan | |||
Minimum | Minimum | Maximum | Maximum | item | LNR | New York | Boston's Seaport District | Boston's Seaport District | Boston's Seaport District | Rating 2 | Rating 2 | Rating 3 | Rating 3 | Rating 4 | Rating 4 | Rating 5 | Not Rated | Rating 2 | Rating 2 | Rating 3 | Rating 3 | Rating 4 | Rating 4 | Rating 2 | Rating 2 | Rating 3 | Rating 3 | Rating 4 | Rating 4 | Rating 2 | Not Rated | Rating 2 | Rating 2 | Rating 3 | Rating 3 | loan | loan | New York | New York | Burbank, CA | San Jose, CA | item | Manager | Finland | ||||||||||||||||||||||||||||||||||||
item | Condominium residences and ground floor retail | sqft | Parking lots | Spaces | Office building | item | Manager | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
item | item | item | item | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans with variable rates of interest | $2,708,997,000 | $1,918,182,000 | ' | $453,690,000 | $674,327,000 | $93,195,000 | $7,217,000 | ' | $54,091,000 | $2,201,216,000 | $1,143,443,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount of new loans | 2,500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | ' | ' | 86,000,000 | 112,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,000,000 | 158,500,000 | 145,600,000 | 136,800,000 | 140,000,000 | 142,500,000 | ' | ' | ' | ' |
Total gross loans | 4,224,967,000 | 3,002,396,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 384,759,000 | 425,952,000 | 3,288,236,000 | 2,465,889,000 | 265,068,000 | 99,048,000 | ' | 11,507,000 | 286,904,000 | 3,794,238,000 | 2,916,495,000 | 1,928,052,000 | 1,461,666,000 | ' | ' | ' | ' | ' | 25,473,000 | 39,734,000 | 1,740,951,000 | 1,350,455,000 | 153,845,000 | 59,970,000 | 11,507,000 | 7,783,000 | 523,393,000 | 397,159,000 | 2,422,000 | 2,434,000 | 489,430,000 | 363,275,000 | 31,541,000 | 31,450,000 | 1,342,793,000 | 1,057,670,000 | 343,818,000 | 370,671,000 | 919,293,000 | 679,371,000 | 79,682,000 | 7,628,000 | 345,139,000 | 66,018,000 | 279,121,000 | 66,018,000 | 279,121,000 | 85,590,000 | 85,901,000 | 13,046,000 | 13,113,000 | 72,544,000 | 72,788,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan loss allowance | -3,976,000 | -2,061,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value | 4,220,991,000 | 3,000,335,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 147,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of loans in default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face value | 4,316,819,000 | 3,099,060,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,890,969,000 | 3,012,723,000 | 1,975,959,000 | 1,502,382,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 560,147,000 | 430,444,000 | ' | ' | ' | ' | ' | ' | 1,354,863,000 | 1,079,897,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67,000,000 | 273,110,000 | 85,740,000 | 86,337,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Coupon (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.10% | 6.20% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.90% | 9.80% | ' | ' | ' | ' | ' | ' | 10.80% | 10.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | 5.30% | 4.70% | 4.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 3 months 18 days | '3 years 9 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years 6 months | '4 years | ' | ' | ' | ' | ' | ' | '3 years 6 months | '3 years 7 months 6 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 10 months 24 days | '9 years 3 months 18 days | '2 years 4 months 24 days | '3 years 2 months 12 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans with variable rates of interest (as a percent) | 64.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis of loans | 'LIBOR or EURIBOR | ' | ' | ' | ' | ' | ' | 'three-month EURIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average spread of loans (as a percent) | 6.17% | ' | ' | 0.52% | ' | ' | ' | 0.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective variable rate basis (as a percent) | ' | ' | ' | 0.18% | 0.21% | 0.19% | 0.30% | ' | 0.23% | ' | ' | 0.19% | 0.50% | 3.00% | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses as a percent of carrying amount | 6.30% | 3.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of loan impairment charges on individual loans held for investment | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage funded at closing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225,000,000 | ' | ' | 50,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 98,900,000 | 122,900,000 | 115,000,000 | 112,000,000 | 115,000,000 | ' | ' | ' | 53,800,000 | ' |
Number of luxury condominium residences to be developed from loan acquired or originated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Numbers of loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Movement of loans held for investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | 3,000,335,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions/Origination | 2,506,378,000 | ' | 264,517,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized Interest | 12,481,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis of loans sold | -1,221,396,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan maturities | -329,636,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal repayments | -65,272,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount accretion/premium amortization | 26,917,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes in fair value | 26,315,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized foreign currency remeasurement gain | 3,784,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized cost written off | 1,517,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan loss allowance | -1,915,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 4,220,991,000 | 3,000,335,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of new loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Class A office buildings with loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' |
Number of retail properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | 225 |
Future funding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,600,000 | 12,900,000 | ' |
Number of stories within a building collateralizing loans originated or acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Carrying value of loans sold into a securitization an independent third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' |
Proceeds from sale of mortgage loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99,400,000 | ' | ' | ' |
Area of land (in square feet) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 844,820 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties collateralizing loans originated or acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | 2,509 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in reserve for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserve for loan losses at beginning of year | 2,061,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provision for loan losses | 1,915,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserve for loan losses at end of period | 3,976,000 | 2,061,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded investment in loans related to the allowance for loan loss | $265,068,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment_Securities_Details
Investment Securities (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 16, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
CCC- | Mortgage-backed securities | Mortgage-backed securities | Mortgage-backed securities | CMBS | CMBS | CMBS | CMBS | CMBS | CMBS | CMBS | CMBS | RMBS | RMBS | RMBS | RMBS | RMBS | CMBS excluding securities elected as fair value option | CMBS excluding securities elected as fair value option | CMBS excluding securities elected as fair value option | CMBS, fair value option | CMBS, fair value option | HTM Security | Equity Securities | Equity Securities | ||||||
Minimum | Maximum | BB+ | ||||||||||||||||||||||||||||
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment securities ($529,423 and $884,254 held at fair value) | $566,793,000 | ' | $566,793,000 | ' | $884,254,000 | ' | ' | ' | ' | $112,436,000 | ' | $112,436,000 | ' | $529,434,000 | ' | ' | ' | $316,261,000 | ' | $316,261,000 | ' | $333,153,000 | ' | ' | ' | $85,710,000 | $85,710,000 | $37,370,000 | $15,016,000 | $21,700,000 |
Fair value of investment securities eliminated as a result of consolidation of VIEs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 324,400,000 | 324,400,000 | ' | ' | ' |
Purchases | 23,871,000 | 95,820,000 | 82,754,000 | 575,690,000 | ' | ' | ' | ' | ' | 1,889,000 | ' | 1,889,000 | 372,252,000 | ' | ' | ' | ' | ' | 95,820,000 | 20,090,000 | 203,438,000 | ' | ' | ' | ' | 21,982,000 | 23,601,000 | 37,174,000 | ' | ' |
Sales | -206,972,000 | -182,886,000 | -442,877,000 | -199,510,000 | ' | ' | ' | ' | ' | -206,972,000 | -173,461,000 | -413,323,000 | -173,461,000 | ' | ' | ' | ' | ' | -9,425,000 | -12,713,000 | -26,049,000 | ' | ' | ' | ' | ' | -10,072,000 | ' | -6,769,000 | ' |
Principal collections | -16,670,000 | -24,416,000 | -56,793,000 | -67,452,000 | ' | ' | ' | ' | ' | -2,546,000 | -5,874,000 | -10,031,000 | -15,142,000 | ' | ' | ' | ' | -14,124,000 | -18,542,000 | -46,762,000 | -52,310,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase Amortized Cost | ' | ' | ' | ' | ' | ' | ' | 372,917,000 | 791,385,000 | 99,081,000 | ' | 99,081,000 | ' | 498,064,000 | ' | ' | ' | 273,836,000 | ' | 273,836,000 | ' | 293,321,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Credit OTTI | ' | ' | ' | ' | ' | ' | ' | -10,573,000 | -10,194,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit OTTI | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -10,573,000 | ' | -10,573,000 | ' | -10,194,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded Amortized Cost | ' | ' | ' | ' | ' | ' | ' | 362,344,000 | 781,191,000 | 99,081,000 | ' | 99,081,000 | ' | 498,064,000 | ' | ' | ' | 263,263,000 | ' | 263,263,000 | ' | 283,127,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Non-Credit OTTI | -34,000 | -61,000 | -1,007,000 | -2,854,000 | ' | ' | ' | -34,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-Credit OTTI | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -34,000 | ' | -34,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized Gains | ' | ' | ' | ' | ' | ' | ' | 69,745,000 | 82,087,000 | 13,355,000 | ' | 13,355,000 | ' | 31,370,000 | ' | ' | ' | 56,390,000 | ' | 56,390,000 | ' | 50,717,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized Losses | ' | ' | ' | ' | ' | ' | ' | -3,358,000 | -691,000 | ' | ' | ' | ' | ' | ' | ' | ' | -3,358,000 | ' | -3,358,000 | ' | -691,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net Fair Value Adjustment | ' | ' | ' | ' | ' | ' | ' | 66,353,000 | 81,396,000 | 13,355,000 | ' | 13,355,000 | ' | 31,370,000 | ' | ' | ' | 52,998,000 | ' | 52,998,000 | ' | 50,026,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value | ' | ' | ' | ' | ' | ' | ' | 428,697,000 | 862,587,000 | 112,436,000 | ' | 112,436,000 | ' | 529,434,000 | ' | ' | ' | 316,261,000 | ' | 316,261,000 | ' | 333,153,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of investment securities before consolidation of VIEs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 410,100,000 | 410,100,000 | ' | ' | ' |
Proceeds from sales of investment securities | ' | ' | 442,877,000 | 199,510,000 | ' | ' | 206,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on sale of investments | ' | ' | 23,728,000 | 19,274,000 | ' | ' | 6,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Coupon (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.50% | ' | 11.50% | ' | 4.30% | ' | ' | ' | 1.00% | ' | 1.00% | ' | 1.10% | ' | ' | ' | 5.60% | 5.60% | ' | ' | ' |
Weighted Average Life (WAL) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | ' | '3 years 3 months 18 days | ' | ' | ' | ' | ' | '5 years 10 months 24 days | ' | '5 years 4 months 24 days | ' | ' | ' | ' | '3 years 4 months 24 days | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | 'one-month LIBOR | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | 'LIBOR | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' |
Loan-to-value ratio of securities not rated (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39.00% | 44.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective variable rate basis (as a percent) | ' | ' | ' | ' | ' | ' | ' | 0.18% | 0.21% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate participating investment in securities | ' | ' | ' | ' | ' | 29,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount not rated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 56,100,000 | 56,100,000 | ' | ' | ' |
Percentage of CMBS securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of securities where obligors are special purpose entities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 79.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 452,868,000 | ' | 452,868,000 | ' | 489,218,000 | 99,081,000 | 99,081,000 | 519,575,000 | ' | ' | ' | ' | ' |
Unpiad Principal Balance of investment securities before consolidation of VIEs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,900,000,000 | 2,900,000,000 | ' | ' | ' |
Purchases in which fair value option was elected | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,400,000 | 116,800,000 | ' | ' | ' |
Purchase amount reflected as repayment of debt of consolidated VIEs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,400,000 | 93,200,000 | ' | ' | ' |
Accretable yield | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -110,265,000 | ' | -110,265,000 | ' | -108,486,000 | ' | ' | -21,511,000 | ' | ' | ' | ' | ' |
Non-accretable difference | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -79,340,000 | ' | -79,340,000 | ' | -97,605,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Total discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -189,605,000 | ' | -189,605,000 | ' | -206,091,000 | ' | ' | -21,511,000 | ' | ' | ' | ' | ' |
Amortized Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 263,263,000 | ' | 263,263,000 | ' | 283,127,000 | 99,081,000 | 99,081,000 | 498,064,000 | ' | ' | ' | ' | ' |
Changes to accretable yield | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 107,317,000 | ' | 108,486,000 | ' | ' | 7,081,000 | 21,511,000 | ' | ' | ' | ' | ' | ' |
Accretion of discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -5,940,000 | ' | -17,846,000 | ' | ' | -885,000 | -5,442,000 | ' | ' | ' | ' | ' | ' |
Purchases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,738,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,418,000 | ' | ' | -6,196,000 | -16,069,000 | ' | ' | ' | ' | ' | ' |
OTTI | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 52,000 | ' | 453,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfer to/from non-accretable difference | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,836,000 | ' | 15,852,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110,265,000 | ' | 110,265,000 | ' | 108,486,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Changes to non accretable difference | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 89,306,000 | ' | 97,605,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal write-downs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,130,000 | ' | -2,133,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,758,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,038,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfer to/from non-accretable difference | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -8,836,000 | ' | -15,852,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 79,340,000 | ' | 79,340,000 | ' | 97,605,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Credit deteriorated RMBS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,400,000 | ' | 350,400,000 | ' | 438,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Accretable yield related to credit deteriorated RMBS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $85,500,000 | ' | $85,500,000 | ' | $93,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Investment_Securities_Details_
Investment Securities (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | |||||
Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2013 | |
Mortgage-backed securities | Mortgage-backed securities | Mortgage-backed securities | CMBS | RMBS | RMBS | RMBS | RMBS | RMBS | CMBS excluding securities elected as fair value option | CMBS, fair value option | Securities, held to maturity | |
security | ||||||||||||
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of securities with variable rate | ' | ' | ' | ' | $275,400,000 | ' | $275,400,000 | ' | $281,200,000 | ' | ' | ' |
Portion of securities with variable rate (as a percent) | ' | ' | ' | 79.60% | 87.10% | ' | 87.10% | ' | 84.40% | 1.50% | 0.00% | ' |
Description of variable rate basis | ' | 'one-month LIBOR | 'one-month LIBOR | 'LIBOR | ' | ' | 'LIBOR | ' | 'LIBOR | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one-month LIBOR |
Variable rate, weighted average spread (as a percent) | ' | ' | ' | 2.30% | ' | ' | 0.37% | ' | 0.38% | ' | ' | 10.00% |
Maximum investment in available-for-sale securities with aggregate expected modified durations of less than 12 months (as a percent) | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Cost of third party management | ' | ' | ' | ' | 300,000 | 700,000 | 1,700,000 | 1,500,000 | ' | ' | ' | ' |
Estimated Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | ' | 45,304,000 | 4,096,000 | ' | 45,304,000 | ' | 45,304,000 | ' | 4,096,000 | ' | ' | ' |
Securities with a loss greater than 12 months | ' | 1,604,000 | 599,000 | ' | 1,604,000 | ' | 1,604,000 | ' | 599,000 | ' | ' | ' |
Unrealized Losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | ' | -2,874,000 | -654,000 | ' | -2,874,000 | ' | -2,874,000 | ' | -654,000 | ' | ' | ' |
Securities with a loss greater than 12 months | ' | -519,000 | -37,000 | ' | -519,000 | ' | -519,000 | ' | -37,000 | ' | ' | ' |
Number of securities with unrealized loss position | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of securities with recognized other-than-temporary impairment charge | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other-than-temporary impairment charge recognized relating to security | ' | 86,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit losses included in other-than-temporary impairment charges recognized relating to security | 700,000 | 52,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Origination of preferred equity interest in limited liability company mandatory redemption | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $37,200,000 |
Investment_Securities_Details_1
Investment Securities (Details 3) (SEREF, USD $) | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 14, 2012 | Sep. 30, 2013 |
SEREF | ' | ' |
Equity securities | ' | ' |
Number of shares acquired | 9,140,000 | ' |
Ownership percentage | 4.00% | ' |
Value of shares acquired | $14.70 | ' |
Fair value of investment | ' | $15 |
Residential_Real_Estate_Detail
Residential Real Estate (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | |||
Building | Land | Furniture and fixtures | Development Assets | |||||
Other Investments | ' | ' | ' | ' | ' | ' | ' | ' |
Costs incurred for getting properties ready for intended use | ' | ' | $9,700,000 | $31,300,000 | ' | ' | ' | ' |
Depreciable Life | ' | ' | ' | ' | '30 years | ' | '5 years | ' |
Acquisition Cost | ' | ' | 514,485,000 | 514,485,000 | 173,554,000 | 49,706,000 | 167,000 | 291,058,000 |
Cost Capitalized Subsequent to Acquisition | ' | ' | 36,728,000 | 36,728,000 | 19,909,000 | ' | 616,000 | 16,203,000 |
Accumulated Depreciation | ' | ' | 3,191,000 | 3,191,000 | 3,086,000 | ' | 105,000 | ' |
Net Book Value | $548,022,000 | $99,115,000 | $548,022,000 | $548,022,000 | $190,377,000 | $49,706,000 | $678,000 | $307,261,000 |
Investment_in_Unconsolidated_E1
Investment in Unconsolidated Entities (Details) (LNR, USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | Sep. 30, 2013 |
Joint venture | Joint venture | Joint venture | Real estate investment venture | Joint venture, two | Joint venture, two | |
Auction.com | ||||||
Investment in Unconsolidated Entities | ' | ' | ' | ' | ' | ' |
Ownership interest acquired (as a percent) | 50.00% | ' | 50.00% | ' | 50.00% | ' |
Investment acquired balance | ' | $55.80 | ' | $23.80 | ' | $21.10 |
Interest in investment venture in real estate (as a percent) | ' | ' | ' | 50.00% | ' | ' |
Investment_in_Unconsolidated_E2
Investment in Unconsolidated Entities (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2010 | Dec. 31, 2012 |
Limited liability company for participation in a mezzanine loan | Limited liability company for participation in a mezzanine loan | Limited liability company for participation in a mezzanine loan | Limited liability company for participation in a mezzanine loan | Limited liability company for real estate debt management and servicing business | Limited liability company for real estate debt management and servicing business | Limited liability company for real estate debt management and servicing business | Limited liability company for real estate debt management and servicing business | Limited liability company for real estate debt management and servicing business | Limited liability company for real estate debt management and servicing business | |||||
Limited liability company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage acquired in privately-held limited liability company | ' | ' | ' | ' | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of investment acquired in privately-held limited liability company | ' | ' | ' | ' | ' | $25.50 | ' | ' | ' | ' | ' | ' | ' | ' |
Privately-held limited liability company, ownership percentage sold | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mezzanine loan participation and share of earning | ' | ' | ' | ' | ' | ' | 0.7 | 2.2 | ' | ' | ' | ' | ' | ' |
Share of earning | 0.6 | 1.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mezzanine loan cost | ' | ' | 24 | 24.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment to acquire interest in venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.7 | ' |
Commitment to acquire percentage interest in venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' |
Funded status of commitment to acquire interest in venture | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | 8 | ' | ' | ' |
Cost basis of investment | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | 8 | ' | ' | 8 |
Realized income related to investment | ' | ' | ' | ' | ' | ' | ' | ' | $0.20 | $0.20 | $1.30 | $1 | ' | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (LNR, USD $) | 0 Months Ended | 6 Months Ended |
Apr. 19, 2013 | Sep. 30, 2013 | |
Domestic servicing rights | ||
Servicing rights, at fair value | ' | ' |
Tax deductible component of goodwill | $101,700,000 | ' |
Period over which tax deductible goodwill is deducted | '15 years | ' |
Servicing rights, eliminated in consolidation | ' | 88,600,000 |
Servicing rights, gross | ' | 246,600,000 |
Servicing rights, at fair value | ' | ' |
Fair value at the beginning of the period | ' | 156,993,000 |
Changes in fair value due to changes in inputs and assumptions | ' | 1,030,000 |
Fair value at the end of the period | ' | $158,023,000 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 6 Months Ended |
Sep. 30, 2013 | |
Servicing rights | ' |
Total servicing rights | $187,732,000 |
European servicing rights | LNR | ' |
Servicing rights | ' |
Carrying value at the beginning of the period | 32,649,000 |
Amortization | -4,765,000 |
Foreign exchange gain | 1,825,000 |
Carrying value at the end of the period | 29,709,000 |
Total servicing rights | 187,732,000 |
Fair value at the end of the period | 31,400,000 |
Future amortization expense | ' |
2013 (remainder of) | 3,160,000 |
2014 | 12,961,000 |
2015 | 8,808,000 |
2016 | 3,472,000 |
2017 and thereafter | 1,308,000 |
Total | $29,709,000 |
Secured_Financing_Agreements_D
Secured Financing Agreements (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | Apr. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
LNR | Wells Fargo II | Wells Fargo II | Wells Fargo II | Wells Fargo III | Wells Fargo IV | Goldman III | Citibank | Citibank | Citibank | Onewest Bank | Borrowing Base | Conduit I | Conduit II | Senior credit facility | Term Loan | Term Loan | Term Loan | Term Loan | SMF I | SMF I | SMF I | SMF I | SMF II | SMF II | SMF II | SMF II | Starwood Property Mortgage, LLC | ||||||
item | Minimum | Maximum | Minimum | Maximum | LNR | BB+/Ba2(S&P/Moody's) | LIBOR | Conduit I | Conduit I | Conduit I | Conduit I | Conduit II | Conduit II | Conduit II | Conduit II | Amended Wells RMBS Repurchase Agreement | |||||||||||||||||
LNR | LNR | LIBOR | LIBOR | LNR | LNR | LIBOR | LIBOR | ||||||||||||||||||||||||||
LNR | LNR | LNR | LNR | ||||||||||||||||||||||||||||||
Debt Instrument: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pricing rate, basis | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | 'LIBOR | 'LIBOR | 'LIBOR | 'LIBOR | ' | ' | 'LIBOR | 'LIBOR | ' | ' | ' | ' | 'LIBOR | ' | 'one-month LIBOR | ' | ' | 'one-month LIBOR | 'one-month LIBOR | ' | ' | 'one-month LIBOR | 'one-month LIBOR | ' |
Pricing margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | 1.75% | 6.00% | 1.90% | 2.75% | 3.70% | ' | 1.75% | 3.75% | 3.00% | 3.25% | ' | ' | ' | ' | 2.75% | ' | 2.75% | ' | ' | 2.20% | 2.20% | ' | ' | 2.10% | 2.10% | ' |
Pledged Asset Carrying Value | ' | ' | ' | ' | ' | ' | $842,044,000 | ' | ' | $289,830,000 | $210,949,000 | $210,125,000 | $158,643,000 | ' | ' | $124,822,000 | $591,916,000 | ' | ' | ' | ' | $1,726,171,000 | ' | ' | $75,234,000 | ' | ' | ' | $203,887,000 | ' | ' | ' | ' |
Maximum Facility Size | ' | ' | ' | ' | ' | ' | 550,000,000 | ' | ' | 175,000,000 | 154,935,000 | 149,989,000 | 125,000,000 | ' | ' | 84,012,000 | 250,000,000 | ' | ' | ' | ' | 298,500,000 | ' | ' | 250,000,000 | 250,000,000 | ' | ' | 150,000,000 | 150,000,000 | ' | ' | ' |
Carrying Value | 1,312,044,000 | ' | 1,312,044,000 | ' | 1,305,812,000 | ' | 246,810,000 | ' | ' | 72,719,000 | 154,935,000 | 149,989,000 | 100,952,000 | ' | ' | 84,012,000 | ' | ' | ' | ' | ' | 297,794,000 | ' | ' | 55,395,000 | ' | ' | ' | 149,438,000 | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000,000 | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing cost (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.84% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees to obtain facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum liability guaranteed (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | 20.00% | ' | ' | ' |
Repayment of outstanding balance plus accrued interest | ' | ' | 2,674,437,000 | 1,164,373,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 268,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Floor interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extended term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days |
Number of repurchase facilities assumed | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument , credit rating | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'BB+/Ba2(S&P/Moody's) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount amortization | ' | ' | -1,211,000 | -669,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 706,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of secured financings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2013 (remainder of) | 239,106,000 | ' | 239,106,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,400,000 | ' | 55,400,000 | 149,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 589,295,000 | ' | 589,295,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 192,599,000 | ' | 192,599,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 3,000,000 | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 and thereafter | 288,750,000 | ' | 288,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 1,312,750,000 | ' | 1,312,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized financing costs, net of amortization | 11,600,000 | ' | 11,600,000 | ' | 7,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of financing costs included in interest expense | $2,100,000 | $1,500,000 | $7,000,000 | $3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Senior_Notes_Detai
Convertible Senior Notes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 15, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Jul. 03, 2013 | Sep. 30, 2013 | |
Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of trading price condition | Conversion upon satisfaction of trading price condition | 2018 Notes | 2018 Notes | 2018 Notes | 2018 Notes | 2019 Notes | 2019 Notes | |||||
item | Minimum | Maximum | Maximum | ||||||||||||
Convertible Senior Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.55% | ' | 4.55% | ' | 4.00% |
Discount at which debt issued to underwriters (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.05% | ' | ' | ' | 2.13% | ' |
Gross proceeds | ' | ' | $1,037,926,000 | ' | ' | ' | ' | ' | ' | $587,700,000 | ' | ' | ' | $450,200,000 | ' |
Principal Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000,000 | 1,060,000,000 | ' | 1,060,000,000 | 460,000,000 | ' |
Effective Rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.08% | ' | 5.37% |
Conversion Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.5981 | ' | 37.9896 |
Remaining Period of Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 4 months 24 days | ' | '5 years 3 months 18 days |
Net unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -64,928,000 | ' | -64,928,000 | ' | ' |
Total | 1,312,750,000 | ' | 1,312,750,000 | ' | ' | ' | ' | ' | ' | ' | 995,072,000 | ' | 995,072,000 | ' | ' |
Carrying amount of conversion option equity components recorded in additional paid-in capital | ' | ' | 48,502,000 | ' | ' | ' | ' | ' | ' | ' | 48,502,000 | ' | 48,502,000 | ' | ' |
Principal amount of notes, basis for conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | 1,000 | ' | ' |
Initial exchange price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.5391 | ' | ' | ' | ' |
Dividend distributions declared per common share (in dollars per share) | $0.46 | $0.44 | $1.36 | $1.32 | ' | ' | ' | ' | ' | ' | $0.46 | $0.46 | ' | ' | ' |
Dividend distributions initially declared per common share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.44 | ' | $0.46 |
Closing share price (in dollars per share) | $23.97 | ' | $23.97 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $28.09 | ' | $28.09 | ' | $26.32 |
Proceeds from notes attributed to equity component | 48,500,000 | ' | 48,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate contractual interest expense | 11,400,000 | ' | 21,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional non-cash interest expense | $3,000,000 | ' | $5,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum number of conditions to be satisfied for conversion of debt | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion price as a basis for debt conversion | ' | ' | ' | ' | ' | 130.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum trading period as a basis for debt conversion | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consecutive trading period as a basis for debt conversion | ' | ' | ' | ' | '30 days | ' | ' | '5 days | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion price and last reported sales price as a basis for debt conversion | ' | ' | ' | ' | ' | ' | ' | ' | 98.00% | ' | ' | ' | ' | ' | ' |
Period of average closing market price of common stock as a basis for debt conversion | ' | ' | ' | ' | ' | ' | '10 days | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of per share value of distributions that exceeds the market price of the entity's common stock as a basis for debt conversion | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan_SecuritizationSale_Activi1
Loan Securitization/Sale Activities (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||
Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | |
First Mortgages | B Notes | A Notes | Repurchase agreement | Repurchase agreement | ||||
Senior participations | First Mortgages | |||||||
loan | ||||||||
Loan Transfer Activities | ' | ' | ' | ' | ' | ' | ' | ' |
Par value of loans held-for-sale, sold during period | $814,800,000 | $363,700,000 | ' | ' | ' | ' | ' | ' |
Fair value of loans held-for-sale, sold during period | 851,500,000 | 375,200,000 | ' | ' | ' | ' | ' | ' |
Amount repaid for outstanding balance | ' | ' | ' | ' | ' | ' | 272,100,000 | 610,400,000 |
Face amount of mortgage loans sold | ' | ' | ' | 261,600,000 | ' | 100,000,000 | ' | ' |
Numbers of loans sold | ' | ' | ' | ' | 2 | ' | ' | ' |
Aggregate proceeds from loans sold | ' | 95,000,000 | 35,738,000 | ' | 95,000,000 | ' | ' | ' |
Total proceeds from first mortgage loans | ' | ' | ' | $52,900,000 | ' | ' | ' | ' |
Derivatives_and_Hedging_Activi2
Derivatives and Hedging Activity (Details) | 9 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Foreign exchange contracts | Foreign exchange contracts | Credit spread instrument | Forward contracts | |
Derivatives designated as cash flow hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | |
USD ($) | USD ($) | Minimum | Maximum | GBP | EUR | USD ($) | instrument | |
instrument | instrument | GBP (£) | EUR (€) | instrument | ||||
instrument | instrument | |||||||
Derivatives | ' | ' | ' | ' | ' | ' | ' | ' |
Number of derivative instruments held | 8 | 34 | ' | ' | ' | ' | 4 | 14 |
Notional amount of derivative instruments | $183.40 | $239.10 | ' | ' | ' | ' | $50 | ' |
Fixed monthly coupons at fixed rate, low end of range (as a percent) | 0.56% | ' | ' | ' | ' | ' | ' | ' |
Fixed monthly coupons at fixed rate, high end of range (as a percent) | 2.23% | ' | ' | ' | ' | ' | ' | ' |
Floating rate | 'LIBOR | ' | ' | ' | ' | ' | ' | ' |
Amount expected to be reclassified from other comprehensive income to interest expense over the next twelve months | 1.4 | ' | ' | ' | ' | ' | ' | ' |
Hedging period for covering exposure to the variability in future cash flows | '93 months | ' | ' | ' | ' | ' | ' | ' |
Number of derivative instruments held to purchase foreign exchange | ' | ' | ' | ' | 1 | ' | ' | ' |
Number of derivative instruments held | ' | ' | ' | ' | 45 | 20 | ' | ' |
Maturity period | ' | ' | '3 years | '10 years | ' | ' | ' | ' |
Notional amount of derivative instruments to purchase foreign exchange | ' | ' | ' | ' | 64.1 | ' | ' | ' |
Notional amount of derivative instruments to sell foreign exchange | ' | ' | ' | ' | £ 198.3 | € 132.40 | ' | ' |
Derivatives_and_Hedging_Activi3
Derivatives and Hedging Activity (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | $9,513 | $9,227 |
Derivative in a Liability Position, Fair Value | 32,252 | 27,770 |
Derivatives designated as cash flow hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | 96 | ' |
Derivative in a Liability Position, Fair Value | 1,084 | 2,571 |
Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | 9,417 | 9,227 |
Derivative in a Liability Position, Fair Value | 31,168 | 25,199 |
Interest rate contracts | Derivatives designated as cash flow hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | 96 | ' |
Derivative in a Liability Position, Fair Value | 1,084 | 2,571 |
Interest rate contracts | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | 3,243 | 4,892 |
Derivative in a Liability Position, Fair Value | 6,186 | 1,772 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | 3,243 | 4,335 |
Derivative in a Liability Position, Fair Value | 24,982 | 23,427 |
Credit spread instrument | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Derivative in an Asset Position, Fair Value | $2,931 | ' |
Derivatives_and_Hedging_Activi4
Derivatives and Hedging Activity (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of Gain/(Loss) Recognized in Income on Derivative | ($22,451,000) | ($7,561,000) | ($65,000) | ($9,784,000) |
Credit-risk-related Contingent Features | ' | ' | ' | ' |
Ratio of indebtedness to total assets above which will the Company could be declared in default (as a percent) | ' | ' | 75.00% | ' |
Collateral posted | 14,600,000 | ' | 14,600,000 | ' |
Derivatives in liability position | 32,300,000 | ' | 32,300,000 | ' |
Interest rate contracts | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of Gain/(Loss) Recognized in Income on Derivative | -4,261,000 | -51,000 | 2,752,000 | 608,000 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of Gain/(Loss) Recognized in Income on Derivative | -17,459,000 | -7,510,000 | -2,692,000 | -10,392,000 |
Credit spread instrument | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of Gain/(Loss) Recognized in Income on Derivative | -731,000 | ' | -125,000 | ' |
Cash flow hedges | Interest rate contracts | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of loss recognized in OCI on derivative (effective portion) | ' | 1,072,000 | ' | 3,534,000 |
Amount of loss recognized in OCI on derivative (effective portion) | -594,000 | ' | 332,000 | ' |
Amount of loss reclassified from accumulated OCI into income (effective portion) | $397,000 | $661,000 | $1,251,000 | $1,911,000 |
Offsetting_Assets_and_Liabilit2
Offsetting Assets and Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Gross Amounts of Recognized Assets | $9,513,000 | $9,227,000 |
Net Amounts of Assets Presented in the Statement of Financial Position | 9,513,000 | 9,227,000 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 6,269,000 | 4,335,000 |
Cash Collateral Received | 2,080,000 | 2,989,000 |
Net Amount | 1,164,000 | 1,903,000 |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 1,046,502,000 | 1,333,582,000 |
Net Amounts of Assets Presented in the Statement of Financial Position | 1,046,502,000 | 1,333,582,000 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 1,020,519,000 | 1,310,147,000 |
Cash Collateral Pledged | 2,239,000 | ' |
Net Amount | 23,744,000 | 23,435,000 |
Fair value of assets pledged against repurchase agreements | 2,115,500,000 | 2,502,900,000 |
Derivatives | ' | ' |
Assets | ' | ' |
Gross Amounts of Recognized Assets | 9,513,000 | 9,227,000 |
Net Amounts of Assets Presented in the Statement of Financial Position | 9,513,000 | 9,227,000 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 6,269,000 | 4,335,000 |
Cash Collateral Received | 2,080,000 | 2,989,000 |
Net Amount | 1,164,000 | 1,903,000 |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 32,252,000 | 27,770,000 |
Net Amounts of Assets Presented in the Statement of Financial Position | 32,252,000 | 27,770,000 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 6,269,000 | 4,335,000 |
Cash Collateral Pledged | 2,239,000 | ' |
Net Amount | 23,744,000 | 23,435,000 |
Secured financing facilities (1) | ' | ' |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 1,014,250,000 | 1,305,812,000 |
Net Amounts of Assets Presented in the Statement of Financial Position | 1,014,250,000 | 1,305,812,000 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | $1,014,250,000 | $1,305,812,000 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (Not primary beneficiary, USD $) | Sep. 30, 2013 |
item | |
Variable interest entities | ' |
Number of CDO structures currently in default | 2 |
Maximum risk of loss related to VIEs, on fair value basis | $85,700,000 |
Securitization SPEs | ' |
Variable interest entities | ' |
Debt obligations to beneficial interest holders, unpaid principal balances | $142,400,000,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||
Sep. 30, 2013 | Sep. 13, 2013 | Sep. 30, 2013 | Aug. 12, 2013 | Oct. 16, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 16, 2012 | Aug. 12, 2013 | Oct. 16, 2012 | Mar. 27, 2013 | Aug. 12, 2013 | Sep. 13, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 17, 2013 | Sep. 30, 2013 | Oct. 22, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 22, 2012 | Oct. 16, 2012 | Sep. 30, 2013 | 17-May-13 | Aug. 12, 2013 | Sep. 13, 2013 | |
Three-month EURIBOR | LNR | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | Junior Mezzanine Loan | First mortgage | First mortgage | First mortgage | Mezzanine Loans | EUR-denominated first mortgage loan | Manager | Manager | Manager | Manager | Manager | Manager | Manager | Starwood Distressed Opportunity Fund IX ("Fund IX") | Starwood Distressed Opportunity Fund IX ("Fund IX") | Starwood Distressed Opportunity Fund IX ("Fund IX") | Starwood Distressed Opportunity Fund IX ("Fund IX") | Starwood Distressed Opportunity Fund IX ("Fund IX") | Starwood Distressed Opportunity Fund IX ("Fund IX") | Third party | Starfin | Starfin | ||
item | Vornado | item | B Notes | EUR-denominated first mortgage loan | LNR | First mortgage and mezzanine loan | First mortgage and mezzanine loan | First mortgage and mezzanine loan | B Notes | First mortgage and mezzanine loan | EUR-denominated first mortgage loan | ||||||||||||||||||
loan | item | ||||||||||||||||||||||||||||
Related-Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial term of management agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of each agreement extension | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base management fee incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $13,500,000 | $8,500,000 | $35,900,000 | $23,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base management Fee Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | 13,500,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incentive fee incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,800,000 | 2,100,000 | 4,800,000 | 7,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incentive fees payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,800,000 | ' | 4,800,000 | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incentive fees paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of incentive fee paid in cash (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of incentive fee paid in stock (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,203 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22.61 | ' | $22.61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Executive compensation and other reimbursable expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | 1,700,000 | 6,300,000 | 4,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Executive compensation and other reimbursable expense payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | 1,100,000 | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Co-origination of mortgage financing | 2,506,378,000 | ' | 264,517,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 475,000,000 | ' | ' | ' | ' |
Mortgage financing to be funded at closing | ' | ' | ' | ' | 137,500,000 | ' | ' | 237,500,000 | ' | 237,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of participation in mortgage financing | ' | ' | ' | ' | ' | 56.25% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.75% | ' | ' | ' |
Percentage of participation in mortgage financing repurchased by entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 56.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in net interest (as a percent) | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution from sales, net of fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage financing to be funded upon reaching certain milestones during transformation of property | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of debt instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issued | 8,760,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,000,000 | ' | ' |
Debt issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 146,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Class A office buildings with loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of retirement community unit collateralizing loan | ' | ' | ' | 109 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of key nursing home collateralizing loan | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Numbers of loans | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount committed for loans by the entity | ' | ' | ' | 11,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount committed for loans by the third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,500,000 | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 5.02% | ' | ' | 15.12% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of loan | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans initially funded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 102,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans initially funded for the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans initially funded for the third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48,500,000 |
Future funding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,600,000 | ' | ' | ' | ' | ' | ' | 12,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future funding commitments by the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future funding commitments by the third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,700,000 |
Variable rate basis of loans | 'LIBOR or EURIBOR | 'three-month EURIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Spread of loans (as a percent) | 6.17% | 0.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of retail properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of participation sold in mortgage financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' |
Percentage of remaining interest of joint venture held by an affiliate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' |
Obligation funded by an affiliate | ' | ' | 6,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,200,000 | ' | ' | ' | ' | ' | ' |
Related party payable | $6,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,200,000 | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | Sep. 30, 2013 | Jun. 28, 2013 | Mar. 28, 2013 | Dec. 31, 2012 | Sep. 28, 2012 | Jun. 29, 2012 | Mar. 30, 2012 |
Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Authorized capital stock, preferred stock (in shares) | 100,000,000 | ' | ' | 100,000,000 | ' | ' | ' |
Par value per share, preferred stock | $0.01 | ' | ' | $0.01 | ' | ' | ' |
Authorized capital stock, common stock (in shares) | 500,000,000 | ' | ' | 500,000,000 | ' | ' | ' |
Par value per share, common stock | $0.01 | ' | ' | $0.01 | ' | ' | ' |
Dividend declared on common stock (in dollars per share) | $0.46 | $0.46 | $0.44 | $0.44 | $0.44 | $0.44 | $0.44 |
Special dividend declared (in dollars per share) | ' | ' | ' | $0.10 | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 28, 2011 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Mar. 31, 2013 | 31-May-12 | Oct. 31, 2012 | 31-May-12 | Dec. 31, 2010 | Aug. 31, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 04, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Sep. 30, 2013 | Sep. 04, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
item | Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan | Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan - as Amended | ||
Chief financial officer and/or compliance officer | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | person | person | person | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | ||||||||
Equity Incentive Plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock reserved for issuance | ' | ' | 3,112,500 | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | 6,000,000 |
Number of equity incentive plans | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of directors receiving grants of restricted stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards granted per director (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,807 | 2,201 | 2,877 | ' | ' | ' | ' | ' |
Awards granted, fair value | ' | ' | ' | ' | $250,000 | ' | $694,000 | ' | $368,000 | ' | ' | ' | $19,900,000 | ' | $21,800,000 | $20,800,000 | ' | ' | ' | ' | ' | ' | $281,000 | $200,000 | $200,000 | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | '3 years | ' | '3 years | ' | '3 years | ' | ' | ' | '3 years | ' | '3 years | '3 years | ' | ' | ' | ' | ' | ' | '1 year | '1 year | '1 year | ' | ' | ' | ' | ' |
Expenses related to the grant | ' | ' | ' | ' | ' | $98,000 | ' | $52,000 | ' | ' | ' | ' | ' | ' | ' | ' | $3,900,000 | $4,100,000 | ' | ' | ' | ' | ' | ' | ' | $47,000 | $87,000 | $147,000 | $216,000 | ' |
Vested to date (in shares) | ' | ' | ' | ' | ' | 4,048 | ' | 1,965 | ' | ' | ' | ' | ' | ' | ' | ' | 162,501 | 178,542 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting annually (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting each quarter (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 12,500 | ' | ' | ' | 72,917 | ' | 89,583 | 86,458 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,188 | 70,220 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $27.83 | $19.76 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-Vested Share and Share Equivalents activity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance (in shares) | 876,486 | ' | ' | ' | ' | 32,265 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 835,417 | ' | ' | ' | ' | ' | ' | ' | ' | 8,804 | ' | ' | ' | ' |
Granted (in shares) | 11,228 | ' | ' | ' | 11,082 | ' | 25,000 | ' | 17,500 | ' | ' | ' | 875,000 | 30,000 | 1,075,000 | 1,037,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,228 | ' | ' | ' | ' |
Vested (in shares) | -175,353 | ' | ' | ' | ' | -4,048 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -162,501 | ' | ' | ' | ' | ' | ' | ' | ' | -8,804 | ' | ' | ' | ' |
Balance at the end of period (in shares) | 712,361 | 712,361 | ' | ' | ' | 28,217 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 672,916 | ' | ' | ' | ' | ' | ' | ' | ' | 11,228 | ' | 11,228 | ' | ' |
Vesting Schedule | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2013 (remainder of) (in shares) | 168,216 | 168,216 | ' | ' | ' | 5,715 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 162,501 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 (in shares) | 317,063 | 317,063 | ' | ' | ' | 14,168 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 291,667 | ' | ' | ' | ' | ' | ' | ' | ' | 11,228 | ' | 11,228 | ' | ' |
2015 (in shares) | 227,082 | 227,082 | ' | ' | ' | 8,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 218,748 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total (in shares) | 712,361 | 712,361 | ' | ' | ' | 28,217 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 672,916 | ' | ' | ' | ' | ' | ' | ' | ' | 11,228 | ' | 11,228 | ' | ' |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 19, 2013 | Sep. 30, 2013 |
Long-Term Incentive Arrangements | Long-Term Incentive Arrangements | Change in Control Retention Arrangements | Change in Control Retention Arrangements | ||
LNR | LNR | LNR | LNR | ||
Minimum | Maximum | ||||
Benefit Plans | ' | ' | ' | ' | ' |
Vesting period for payment under agreement | ' | 'P3Y | 'P4Y | ' | ' |
Percentage of cash bonus payable to participants upon change in control | ' | ' | ' | 50.00% | ' |
Remaining percentage of cash bonus payable to participants upon satisfying condition | ' | ' | ' | 50.00% | ' |
Period after change in control cash bonus award due | ' | ' | ' | '9 months | ' |
Remaining cash bonus payable to participants upon satisfying condition | ' | ' | ' | $23,100,000 | ' |
Funds in Rabbi Trust account | 19,587,000 | ' | ' | ' | 19,600,000 |
General and administrative expenses | ' | ' | ' | ' | $15,800,000 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income | ' | ' |
Beginning balance | $60,285 | $79,675 |
Other comprehensive (loss) income before reclassifications | 17,194 | 11,616 |
Amounts reclassified from accumulated other comprehensive income | -8,192 | -22,004 |
Net current period other comprehensive income | 9,002 | -10,388 |
Ending balance | 69,287 | 69,287 |
Effective Portion of Cumulative Loss on Cash Flow Hedges | ' | ' |
Accumulated Other Comprehensive Income | ' | ' |
Beginning balance | -791 | -2,571 |
Other comprehensive (loss) income before reclassifications | -594 | 332 |
Amounts reclassified from accumulated other comprehensive income | 397 | 1,251 |
Net current period other comprehensive income | -197 | 1,583 |
Ending balance | -988 | -988 |
Cumulative Unrealized Gain on Available-for-Sale Securities | ' | ' |
Accumulated Other Comprehensive Income | ' | ' |
Beginning balance | 68,119 | 82,246 |
Other comprehensive (loss) income before reclassifications | 6,821 | 7,360 |
Amounts reclassified from accumulated other comprehensive income | -8,589 | -23,255 |
Net current period other comprehensive income | -1,768 | -15,895 |
Ending balance | 66,351 | 66,351 |
Foreign Currency Translation | ' | ' |
Accumulated Other Comprehensive Income | ' | ' |
Beginning balance | -7,043 | ' |
Other comprehensive (loss) income before reclassifications | 10,967 | 3,924 |
Net current period other comprehensive income | 10,967 | 3,924 |
Ending balance | $3,924 | $3,924 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Interest expense | $36,743 | $12,030 | $77,678 | $34,345 |
OTTI | 52 | 676 | 453 | 2,728 |
Total reclassifications for the period | 8,192 | ' | 22,004 | ' |
Amounts Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Total reclassifications for the period | -8,192 | ' | -22,004 | ' |
Losses on cash flow hedges | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Total reclassifications for the period | -397 | ' | -1,251 | ' |
Losses on cash flow hedges | Amounts Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Total reclassifications for the period | 397 | ' | 1,251 | ' |
Losses on cash flow hedges | Interest rate contracts | Amounts Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Interest expense | 397 | ' | 1,251 | ' |
Unrealized gains and losses on available for sale securities | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Total reclassifications for the period | 8,589 | ' | 23,255 | ' |
Unrealized gains and losses on available for sale securities | Amounts Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Gain/loss on sale of investment, net | -8,537 | ' | -22,802 | ' |
OTTI | -52 | ' | -453 | ' |
Total reclassifications for the period | ($8,589) | ' | ($23,255) | ' |
Net_Income_per_Share_Details
Net Income per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net Income per Share | ' | ' | ' | ' |
Net income attributable to Starwood Property Trust, Inc. | $89,715 | $50,212 | $214,239 | $144,861 |
Net income allocated to participating securities | -310 | -275 | -1,133 | -980 |
Numerator for basic and diluted net income per share | $89,405 | $49,937 | $213,106 | $143,881 |
Basic weighted average shares outstanding | 171,520,231 | 116,673,477 | 156,614,647 | 107,077,837 |
Diluted weighted average shares outstanding | 172,394,882 | 117,381,559 | 157,650,258 | 107,958,047 |
Basic income per share | $0.52 | $0.43 | $1.36 | $1.34 |
Diluted income per share | $0.52 | $0.43 | $1.36 | $1.34 |
Unvested restricted stock units and restricted stock awards (in shares) | ' | ' | 712,361 | 478,947 |
Shares issuable as incentive fee payable to manager | ' | ' | 99,601 | 47,736 |
Number of anti-dilutive potential common shares excluded from the calculation of diluted income per share | ' | ' | 38,800,000 | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
CMBS | CMBS | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | Fair value measurements on recurring basis | |||
Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Level I | Level I | Level I | Level I | Level I | Level II | Level II | Level II | Level II | Level II | Level II | Level III | Level III | Level III | Level III | Level III | Level III | Level III | |||||
Domestic Servicing Rights | Foreign exchange contracts | Interest rate contracts | Available-for-sale debt securities | RMBS | RMBS | CMBS | CMBS | Available-for-sale equity securities, Real estate industry | Total available-for-sale equity securities | Total available-for-sale equity securities | Available-for-sale equity securities, Real estate industry | Total available-for-sale equity securities | Total available-for-sale equity securities | Foreign exchange contracts | Interest rate contracts | Available-for-sale debt securities | CMBS | Domestic Servicing Rights | Available-for-sale debt securities | RMBS | RMBS | CMBS | |||||||||||||
Assets and liabilities measured at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans held-for-sale, fair value option | $279,121,000 | $0 | ' | ' | $279,121,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $279,121,000 | ' | ' | ' | ' | ' | ' |
Available-for-sale securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 862,587,000 | 316,261,000 | 333,153,000 | 198,146,000 | 529,434,000 | 21,667,000 | 15,016,000 | 21,667,000 | ' | ' | 21,667,000 | 15,016,000 | 21,667,000 | ' | ' | ' | ' | 529,434,000 | 529,434,000 | ' | ' | ' | 333,153,000 | 316,261,000 | 333,153,000 | 198,146,000 |
Intangible assets - servicing rights at fair value | 158,023,000 | 0 | ' | ' | ' | ' | 158,023,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 158,023,000 | ' | ' | ' | ' |
Total investments | ' | ' | ' | ' | ' | 884,254,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,667,000 | ' | ' | ' | ' | 529,434,000 | ' | ' | ' | ' | ' | 333,153,000 | ' | ' | ' | ' | ' |
Derivative assets | 9,513,000 | 9,227,000 | ' | ' | 9,513,000 | ' | ' | 4,335,000 | 4,892,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,513,000 | ' | 4,335,000 | 4,892,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
VIE assets | 97,359,666,000 | ' | ' | ' | 97,359,666,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 97,359,666,000 | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | 98,335,746,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,016,000 | ' | ' | ' | ' | 9,513,000 | ' | ' | ' | ' | ' | 98,311,217,000 | ' | ' | ' | ' | ' | ' |
Derivative liabilities | ' | ' | ' | ' | -32,252,000 | ' | ' | -23,427,000 | -4,343,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -32,252,000 | ' | -23,427,000 | -4,343,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
VIE liabilities | 96,934,006,000 | ' | ' | ' | 96,934,006,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,150,366,000 | ' | ' | ' | ' | ' | 1,783,640,000 | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | 96,966,258,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,182,618,000 | ' | ' | ' | ' | ' | 1,783,640,000 | ' | ' | ' | ' | ' | ' |
Total derivatives | ' | ' | ' | ' | ' | -18,543,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -18,543,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | 865,711,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,667,000 | ' | ' | ' | ' | 510,891,000 | ' | ' | ' | ' | ' | 333,153,000 | ' | ' | ' | ' | ' |
Transfer of investment from Level II to Level III | ' | ' | $5,100,000 | $117,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Net accretion | ' | ' | $23,484 | $25,064 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Net accretion | ' | ' | 23,484 | 25,064 |
Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | ' | 233,456 | ' | 470,327 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Net accretion | 5,940 | 5,924 | 17,846 | 12,548 |
Purchases / Originations | ' | 95,814 | ' | 203,433 |
Sales | ' | -9,425 | ' | -158,177 |
Deconsolidations of VIEs | ' | ' | -584,804 | ' |
Balance at the end of the period | ' | 337,900 | ' | 337,900 |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | -4,028,234 | ' | -7,714,797 | ' |
Changes in financial instruments classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 95,764,934 | ' | 333,153 | ' |
Acquisition of LNR | ' | ' | 89,471,477 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | -4,016,254 | ' | -7,712,129 | ' |
Included in earnings: Impairment | -52 | ' | -453 | ' |
Included in other comprehensive income | 5,316 | ' | 5,352 | ' |
Net accretion | 5,940 | 5,924 | 17,846 | 12,548 |
Purchases / Originations | 481,339 | ' | 892,137 | ' |
Sales | -375,204 | ' | -874,323 | ' |
Issuances | -8,760 | ' | -8,760 | ' |
Cash repayments / receipts | -19,503 | ' | 27,475 | ' |
Transfers into level 3 | -83,708 | ' | -460,906 | ' |
Transfers out of level 3 | 483,608 | ' | 636,291 | ' |
Consolidations of VIEs | 4,290,074 | ' | 14,784,360 | ' |
Deconsolidations of VIEs | -153 | ' | -583,943 | ' |
Balance at the end of the period | 96,527,577 | ' | 96,527,577 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | -4,028,234 | ' | -7,714,797 | ' |
VIE liabilities | Level III | ' | ' | ' | ' |
Changes in financial liabilities classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | -2,334,660 | ' | ' | ' |
Acquisition of LNR | ' | ' | -1,994,243 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | 239,094 | ' | 333,542 | ' |
Issuances | -8,760 | ' | -8,760 | ' |
Cash repayments / receipts | -5,041 | ' | 74,694 | ' |
Transfers into Level III | -88,806 | ' | -578,319 | ' |
Transfers out of Level III | 483,608 | ' | 636,291 | ' |
Consolidations of VIEs | -69,075 | ' | -247,706 | ' |
Deconsolidations of VIEs | ' | ' | 861 | ' |
Balance at the end of the period | -1,783,640 | ' | -1,783,640 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | 239,094 | ' | 333,542 | ' |
Loans Held-for-sale | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 171,176 | ' | ' | 128,593 |
Acquisition of LNR | ' | ' | 256,502 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | 25,856 | ' | 26,315 | ' |
Purchases / Originations | 457,468 | ' | 848,137 | ' |
Sales | -375,204 | ' | -851,539 | -132,128 |
Cash repayments / receipts | -175 | ' | -294 | ' |
Balance at the end of the period | 279,121 | ' | 279,121 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | 6,011 | ' | 6,011 | ' |
RMBS | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 319,655 | ' | 333,153 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | ' | ' | 2,129 | ' |
Included in earnings: Impairment | -52 | ' | -453 | ' |
Included in other comprehensive income | 4,842 | ' | 2,970 | ' |
Net accretion | 5,940 | ' | 17,846 | ' |
Purchases / Originations | ' | ' | 20,090 | ' |
Sales | ' | ' | -12,712 | ' |
Cash repayments / receipts | -14,124 | ' | -46,762 | ' |
Balance at the end of the period | 316,261 | ' | 316,261 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | 7,057 | ' | 21,363 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Net accretion | 5,940 | ' | 17,846 | ' |
CMBS | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 164,399 | ' | ' | ' |
Acquisition of LNR | ' | ' | 62,432 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | 4,620 | ' | 3,452 | ' |
Included in other comprehensive income | 474 | ' | 2,382 | ' |
Purchases / Originations | 23,871 | ' | 23,910 | ' |
Sales | ' | ' | -10,072 | ' |
Cash repayments / receipts | -163 | ' | -163 | ' |
Transfers into Level III | 5,098 | ' | 117,413 | ' |
Consolidations of VIEs | ' | ' | -1,208 | ' |
Deconsolidations of VIEs | -153 | ' | ' | ' |
Balance at the end of the period | 198,146 | ' | 198,146 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | 5,428 | ' | 1,854 | ' |
Domestic Servicing Rights | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 159,891 | ' | ' | ' |
Acquisition of LNR | ' | ' | 156,993 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | -1,868 | ' | 1,030 | ' |
Balance at the end of the period | 158,023 | ' | 158,023 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | -1,868 | ' | 1,030 | ' |
VIE assets | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 97,284,473 | ' | ' | ' |
Acquisition of LNR | ' | ' | 90,989,793 | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value | -4,283,956 | ' | -8,078,597 | ' |
Consolidations of VIEs | 4,359,149 | ' | 15,033,274 | ' |
Deconsolidations of VIEs | ' | ' | -584,804 | ' |
Balance at the end of the period | 97,359,666 | ' | 97,359,666 | ' |
Amount of total (losses) gains included in earnings attributable to assets still held at period end | ($4,283,956) | ' | ($8,078,597) | ' |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Movement of investment in available-for-sale debt securities | ' | ' | ' | ' |
Accretion of discount | ' | ' | $23,484 | $25,064 |
Level III | ' | ' | ' | ' |
Movement of investment in available-for-sale debt securities | ' | ' | ' | ' |
Balance at the beginning of the period | ' | 233,456 | ' | 470,327 |
Purchases | ' | 95,814 | ' | 203,433 |
Transfers out | ' | ' | ' | -176,786 |
Sales | ' | -9,425 | ' | -158,177 |
Principal amortization | ' | -18,542 | ' | -52,432 |
Net decrease in assets | ' | 67,847 | ' | -183,962 |
Unrealized (loss) gain on assets | ' | 30,575 | ' | 28,611 |
Realized gain on assets | ' | 730 | ' | 13,060 |
Accretion of discount | 5,940 | 5,924 | 17,846 | 12,548 |
OTTI | ' | -637 | ' | -2,689 |
Other | ' | 5 | ' | 5 |
Net gain on assets | ' | 36,597 | ' | 51,535 |
Balance at the end of the period | ' | 337,900 | ' | 337,900 |
Loans held-for-sale, fair value option | Level III | ' | ' | ' | ' |
Movement of investment in available-for-sale debt securities | ' | ' | ' | ' |
Balance at the beginning of the period | 171,176 | ' | ' | 128,593 |
Purchases | 457,468 | ' | 848,137 | ' |
Sales | -375,204 | ' | -851,539 | -132,128 |
Principal amortization | ' | ' | ' | -122 |
Net decrease in assets | ' | ' | ' | -132,250 |
Unrealized (loss) gain on assets | ' | ' | ' | -5,760 |
Realized gain on assets | ' | ' | ' | 9,417 |
Net gain on assets | ' | ' | ' | 3,657 |
Balance at the end of the period | 279,121 | ' | 279,121 | ' |
MBS available-for-sale, at fair value | Level III | ' | ' | ' | ' |
Movement of investment in available-for-sale debt securities | ' | ' | ' | ' |
Balance at the beginning of the period | ' | 233,456 | ' | 341,734 |
Purchases | ' | 95,814 | ' | 203,433 |
Transfers out | ' | ' | ' | -176,786 |
Sales | ' | -9,425 | ' | -26,049 |
Principal amortization | ' | -18,542 | ' | -52,310 |
Net decrease in assets | ' | 67,847 | ' | -51,712 |
Unrealized (loss) gain on assets | ' | 30,575 | ' | 34,371 |
Realized gain on assets | ' | 730 | ' | 3,643 |
Accretion of discount | ' | 5,924 | ' | 12,548 |
OTTI | ' | -637 | ' | -2,689 |
Other | ' | 5 | ' | 5 |
Net gain on assets | ' | 36,597 | ' | 47,878 |
Balance at the end of the period | ' | $337,900 | ' | $337,900 |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financial Assets: | ' | ' |
Loans held-for-investment and loans transferred as secured borrowings | $3,790,262 | $2,914,434 |
Loans held-for-sale | 345,139 | ' |
Non-performing residential loans | 197,716 | 68,883 |
Financial Liabilities: | ' | ' |
Convertible senior notes | 995,072 | ' |
Carrying Value | ' | ' |
Financial Assets: | ' | ' |
Loans held-for-investment and loans transferred as secured borrowings | 3,875,852 | 3,000,335 |
Loans held-for-sale | 66,018 | ' |
Securities, held to maturity | 37,370 | ' |
European servicing rights | 29,709 | ' |
Non-performing residential loans | 197,716 | 68,883 |
Financial Liabilities: | ' | ' |
Secured financing agreements, loan transfer secured borrowings, and loan participation liability | 1,493,726 | 1,393,705 |
Convertible senior notes | 995,072 | ' |
Fair Value | ' | ' |
Financial Assets: | ' | ' |
Loans held-for-investment and loans transferred as secured borrowings | 3,974,875 | 3,097,089 |
Loans held-for-sale | 66,813 | ' |
Securities, held to maturity | 37,600 | ' |
European servicing rights | 31,448 | ' |
Non-performing residential loans | 203,700 | 68,883 |
Financial Liabilities: | ' | ' |
Secured financing agreements, loan transfer secured borrowings, and loan participation liability | 1,493,257 | 1,397,128 |
Convertible senior notes | $1,102,300 | ' |
Fair_Value_of_Financial_Instru6
Fair Value of Financial Instruments (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Loans held-for-sale, fair value option | Loans held-for-sale, fair value option | Loans held-for-sale, fair value option | RMBS | RMBS | RMBS | RMBS | RMBS | RMBS | CMBS and CMBS, fair value option | CMBS and CMBS, fair value option | CMBS and CMBS, fair value option | Domestic Servicing Rights | Domestic Servicing Rights | VIE assets | VIE assets | VIE assets | ||
Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | Discounted cash flow | ||||||||
Minimum | Maximum | Minimum | Minimum | Maximum | Maximum | Minimum | Maximum | Recurring basis | Minimum | Maximum | |||||||||
Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | ||||||||||||
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value | $104,074,575 | $4,324,373 | $279,121 | ' | ' | $316,261 | ' | ' | ' | ' | ' | $198,146 | ' | ' | $158,023 | ' | $97,359,666 | ' | ' |
Yield (as a percent) | ' | ' | ' | 4.65% | 5.61% | ' | ' | ' | ' | ' | ' | ' | 0.00% | 767.00% | ' | 8.75% | ' | 0.00% | 791.80% |
Duration | ' | ' | ' | '5 years | '10 years | ' | ' | ' | ' | ' | ' | ' | '0 years | '10 years | ' | ' | ' | '0 years | '23 years 6 months |
Constant prepayment rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | -0.60% | ' | 14.90% | ' | ' | ' | ' | ' | ' | ' | ' |
Constant default rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | 13.30% | ' | ' | ' | ' | ' | ' | ' | ' |
Loss severity (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | 83.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Delinquency Rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | 47.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Servicer Advances (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Annual Coupon Deterioration (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.03% | ' | 0.18% | ' | ' | ' | ' | ' | ' | ' | ' |
Putback Amount per Projected Total Collateral Loss (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | 9.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rates (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' |
Portfolio percentage | ' | ' | ' | ' | ' | ' | 90.00% | 40.00% | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru7
Fair Value of Financial Instruments (Details 6) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | VIE liabilities | VIE liabilities | VIE liabilities | ||
Discounted cash flow | Discounted cash flow | ||||
Minimum | Maximum | ||||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ' | ' | ' | ' | ' |
Carrying Value | $99,761,146 | $1,527,168 | $1,783,640 | ' | ' |
Yield (as a percent) | ' | ' | ' | 0.00% | 791.80% |
Duration | ' | ' | ' | '0 years | '23 years 6 months |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Current | ' | ' | ' | ' |
Federal | $11,465 | $244 | $21,396 | $682 |
Foreign | 1,011 | ' | 1,581 | ' |
State | 1,892 | 57 | 3,753 | 158 |
Total current | 14,368 | 301 | 26,730 | 840 |
Deferred | ' | ' | ' | ' |
Federal | 59 | ' | 122 | ' |
Foreign | -716 | ' | -1,181 | ' |
State | 10 | ' | 20 | ' |
Total deferred | -647 | ' | -1,039 | ' |
Total income tax provision | 13,721 | 301 | 25,691 | 840 |
Deferred tax asset, net | ' | ' | ' | ' |
Reserves and accruals | 10,595 | ' | 10,595 | ' |
Domestic intangible assets | -4,844 | ' | -4,844 | ' |
Investment securities and loans | -165 | ' | -165 | ' |
Investment in unconsolidated entities | -2,102 | ' | -2,102 | ' |
Deferred income | 39 | ' | 39 | ' |
Other U.S. temporary differences | -287 | ' | -287 | ' |
Deferred tax assets | 3,236 | ' | 3,236 | ' |
Deferred tax liability, net | ' | ' | ' | ' |
European servicing rights | -7,368 | ' | -7,368 | ' |
Net operating and capital loss carryforwards | 9,935 | ' | 9,935 | ' |
Valuation allowance | -9,935 | ' | -9,935 | ' |
Other European temporary differences | 215 | ' | 215 | ' |
Deferred tax liabilities, net | -7,153 | ' | -7,153 | ' |
Net deferred tax asset (liabilities) | -3,917 | ' | -3,917 | ' |
Reconciliation of statutory tax to effective tax | ' | ' | ' | ' |
Federal statutory tax rate | 36,933 | 17,725 | 85,489 | 51,131 |
REIT and other non-taxable income | -24,886 | -17,481 | -62,818 | -50,449 |
State income taxes | 1,902 | 57 | 3,774 | 158 |
Federal benefit of state tax deduction | -666 | ' | -1,321 | ' |
Other | 438 | ' | 567 | ' |
Effective tax rate | $13,721 | $301 | $25,691 | $840 |
Reconciliation of statutory tax rate to effective tax rate | ' | ' | ' | ' |
Federal statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
REIT and other non-taxable income (as a percent) | -23.60% | -34.50% | -25.70% | -34.50% |
State income taxes (as a percent) | 1.80% | 0.10% | 1.50% | 0.10% |
Federal benefit of state tax deduction (as a percent) | -0.60% | ' | -0.50% | ' |
Other (as a percent) | 0.40% | ' | 0.20% | ' |
Effective tax rate (as a percent) | 13.00% | 0.60% | 10.50% | 0.60% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Apr. 19, 2013 |
LNR | ' | ' |
Commitments | ' | ' |
Unfavorable lease liability | $14.40 | $15.30 |
Amortization period of unfavorable lease liability | '8 years | ' |
Commitment to invest in venture | ' | ' |
Commitments | ' | ' |
Number of loans with future funding commitments | 34 | ' |
Value of loans with future funding commitments | $608.70 | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
segment | segment | |||||
Segment Reporting | ' | ' | ' | ' | ' | ' |
Number of reportable business segments | ' | ' | 1 | 3 | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Interest income from loans | $94,045 | $56,261 | ' | ' | $236,671 | $179,078 |
Interest income from investment securities | 17,804 | 16,585 | ' | ' | 52,621 | 40,404 |
Servicing fees | 36,509 | ' | ' | ' | 75,644 | ' |
Other revenues | 2,098 | 66 | ' | ' | 4,077 | 180 |
Rental income | 5,080 | 59 | ' | ' | 8,733 | 59 |
Total revenues | 155,536 | 72,971 | ' | ' | 377,746 | 219,721 |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 24,235 | 14,659 | ' | ' | 58,675 | 42,673 |
Interest expense | 36,743 | 12,030 | ' | ' | 77,678 | 34,345 |
General and administrative | 48,335 | 3,084 | ' | ' | 97,769 | 8,838 |
Business combination costs | 342 | ' | ' | ' | 17,958 | ' |
Acquisition and investment pursuit costs | 1,177 | 622 | ' | ' | 4,495 | 2,737 |
Residential segment, other operating costs | 6,023 | 327 | ' | ' | 10,622 | 327 |
Depreciation and amortization | 4,988 | 78 | ' | ' | 8,644 | 78 |
Loan loss allowance | 1,160 | ' | ' | ' | 1,915 | ' |
Other expense | 304 | ' | ' | ' | 533 | ' |
Total costs and expenses | 123,307 | 30,800 | ' | ' | 278,289 | 88,998 |
Income before other income (loss), income taxes and non-controlling interests | 32,229 | 42,171 | ' | ' | 99,457 | 130,723 |
Other income: | ' | ' | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,963 | ' | ' | ' | 79,912 | ' |
Change in fair value of servicing rights | -1,867 | ' | ' | ' | 1,031 | ' |
Change in fair value of investment securities, net | -2,278 | ' | ' | ' | -3,265 | ' |
Change in fair value of mortgage loans held-for-sale, net | 25,857 | ' | ' | ' | 26,315 | -5,760 |
Earnings from unconsolidated entities | 4,577 | 787 | ' | ' | 10,915 | 2,739 |
Gain (loss) on sale of investments, net | 8,059 | 9,017 | ' | ' | 22,968 | 19,147 |
Loss on derivative financial instruments, net | -22,451 | -7,561 | ' | ' | -65 | -9,784 |
Foreign currency gain, net | 9,580 | 6,725 | ' | ' | 3,495 | 11,222 |
OTTI | -52 | -676 | ' | ' | -453 | -2,728 |
Other income | 3,705 | 180 | ' | ' | 3,744 | 530 |
Total other income | 73,093 | 8,472 | ' | ' | 144,597 | 15,366 |
Income before income taxes and non-controlling interests | 105,322 | 50,643 | ' | ' | 244,054 | 146,089 |
Income tax provision | 13,721 | 301 | ' | ' | 25,691 | 840 |
Net income | 91,601 | 50,342 | ' | ' | 218,363 | 145,249 |
Net income attributable to non-controlling interests | 1,886 | 130 | ' | ' | 4,124 | 388 |
Net income attributable to Starwood Property Trust, Inc. | 89,715 | 50,212 | ' | ' | 214,239 | 144,861 |
Real Estate Investment Lending | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Interest income from loans | 90,837 | 56,261 | ' | ' | 231,203 | 179,078 |
Interest income from investment securities | 12,301 | 16,585 | ' | ' | 42,179 | 40,404 |
Other revenues | 116 | 64 | ' | ' | 291 | 178 |
Total revenues | 103,254 | 72,910 | ' | ' | 273,673 | 219,660 |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 15,581 | 14,563 | ' | ' | 44,504 | 42,526 |
Interest expense | 29,866 | 12,030 | ' | ' | 66,794 | 34,345 |
General and administrative | 3,748 | 3,084 | ' | ' | 11,401 | 8,838 |
Business combination costs | 342 | ' | ' | ' | 17,958 | ' |
Acquisition and investment pursuit costs | 742 | 465 | ' | ' | 1,787 | 2,032 |
Loan loss allowance | 1,160 | ' | ' | ' | 1,915 | ' |
Other expense | 59 | ' | ' | ' | 150 | ' |
Total costs and expenses | 51,498 | 30,142 | ' | ' | 144,509 | 87,741 |
Income before other income (loss), income taxes and non-controlling interests | 51,756 | 42,768 | ' | ' | 129,164 | 131,919 |
Other income: | ' | ' | ' | ' | ' | ' |
Change in fair value of investment securities, net | -157 | ' | ' | ' | -83 | ' |
Change in fair value of mortgage loans held-for-sale, net | ' | ' | ' | ' | ' | -5,760 |
Earnings from unconsolidated entities | 896 | 787 | ' | ' | 3,488 | 2,739 |
Gain (loss) on sale of investments, net | 6,184 | 9,019 | ' | ' | 19,690 | 19,149 |
Loss on derivative financial instruments, net | -17,166 | -7,561 | ' | ' | -2,939 | -9,784 |
Foreign currency gain, net | 9,555 | 6,725 | ' | ' | 3,537 | 11,222 |
OTTI | -52 | -676 | ' | ' | -453 | -2,728 |
Other income | ' | 180 | ' | ' | ' | 530 |
Total other income | -740 | 8,474 | ' | ' | 23,240 | 15,368 |
Income before income taxes and non-controlling interests | 51,016 | 51,242 | ' | ' | 152,404 | 147,287 |
Income tax provision | 619 | 301 | ' | ' | 1,645 | 840 |
Net income | 50,397 | 50,941 | ' | ' | 150,759 | 146,447 |
Net income attributable to non-controlling interests | 1,451 | 130 | ' | ' | 3,599 | 388 |
Net income attributable to Starwood Property Trust, Inc. | 48,946 | 50,811 | ' | ' | 147,160 | 146,059 |
Single Family Residential | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Other revenues | 75 | 2 | ' | ' | 180 | 2 |
Rental income | 5,080 | 59 | ' | ' | 8,733 | 59 |
Total revenues | 5,155 | 61 | ' | ' | 8,913 | 61 |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 3,310 | 96 | ' | ' | 6,535 | 147 |
Interest expense | 2,287 | ' | ' | ' | 3,587 | ' |
General and administrative | 652 | ' | ' | ' | 1,713 | ' |
Acquisition and investment pursuit costs | 223 | 157 | ' | ' | 2,105 | 705 |
Residential segment, other operating costs | 6,023 | 327 | ' | ' | 10,622 | 327 |
Depreciation and amortization | 1,553 | 78 | ' | ' | 2,981 | 78 |
Total costs and expenses | 14,048 | 658 | ' | ' | 27,543 | 1,257 |
Income before other income (loss), income taxes and non-controlling interests | -8,893 | -597 | ' | ' | -18,630 | -1,196 |
Other income: | ' | ' | ' | ' | ' | ' |
Gain (loss) on sale of investments, net | 1,875 | -2 | ' | ' | 3,278 | -2 |
Other income | 3,320 | ' | ' | ' | 3,320 | ' |
Total other income | 5,195 | -2 | ' | ' | 6,598 | -2 |
Income before income taxes and non-controlling interests | -3,698 | -599 | ' | ' | -12,032 | -1,198 |
Income tax provision | ' | ' | ' | ' | 12 | ' |
Net income | -3,698 | -599 | ' | ' | -12,044 | -1,198 |
Net income attributable to non-controlling interests | 16 | ' | ' | ' | ' | ' |
Net income attributable to Starwood Property Trust, Inc. | -3,714 | -599 | ' | ' | -12,044 | -1,198 |
LNR | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Interest income from loans | 3,208 | ' | ' | ' | 5,468 | ' |
Interest income from investment securities | 18,792 | ' | ' | ' | 30,550 | ' |
Servicing fees | 59,566 | ' | ' | ' | 112,426 | ' |
Other revenues | 2,229 | ' | ' | ' | 4,201 | ' |
Total revenues | 83,795 | ' | ' | ' | 152,645 | ' |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 5,298 | ' | ' | ' | 7,572 | ' |
Interest expense | 4,590 | ' | ' | ' | 7,297 | ' |
General and administrative | 43,752 | ' | ' | ' | 84,325 | ' |
Acquisition and investment pursuit costs | 212 | ' | ' | ' | 603 | ' |
Depreciation and amortization | 3,435 | ' | ' | ' | 5,663 | ' |
Other expense | 245 | ' | ' | ' | 383 | ' |
Total costs and expenses | 57,532 | ' | ' | ' | 105,843 | ' |
Income before other income (loss), income taxes and non-controlling interests | 26,263 | ' | ' | ' | 46,802 | ' |
Other income: | ' | ' | ' | ' | ' | ' |
Change in fair value of servicing rights | -3,939 | ' | ' | ' | 2,175 | ' |
Change in fair value of investment securities, net | 9,820 | ' | ' | ' | 16,208 | ' |
Change in fair value of mortgage loans held-for-sale, net | 25,857 | ' | ' | ' | 26,315 | ' |
Earnings from unconsolidated entities | 4,459 | ' | ' | ' | 8,401 | ' |
Loss on derivative financial instruments, net | -5,285 | ' | ' | ' | 2,874 | ' |
Foreign currency gain, net | 25 | ' | ' | ' | -42 | ' |
Other income | 385 | ' | ' | ' | 424 | ' |
Total other income | 31,322 | ' | ' | ' | 56,355 | ' |
Income before income taxes and non-controlling interests | 57,585 | ' | ' | ' | 103,157 | ' |
Income tax provision | 13,102 | ' | ' | ' | 24,034 | ' |
Net income | 44,483 | ' | ' | ' | 79,123 | ' |
Net income attributable to Starwood Property Trust, Inc. | 44,483 | ' | ' | ' | 79,123 | ' |
Subtotal | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Interest income from loans | 94,045 | ' | ' | ' | 236,671 | ' |
Interest income from investment securities | 31,093 | ' | ' | ' | 72,729 | ' |
Servicing fees | 59,566 | ' | ' | ' | 112,426 | ' |
Other revenues | 2,420 | ' | ' | ' | 4,672 | ' |
Rental income | 5,080 | ' | ' | ' | 8,733 | ' |
Total revenues | 192,204 | ' | ' | ' | 435,231 | ' |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 24,189 | ' | ' | ' | 58,611 | ' |
Interest expense | 36,743 | ' | ' | ' | 77,678 | ' |
General and administrative | 48,152 | ' | ' | ' | 97,439 | ' |
Business combination costs | 342 | ' | ' | ' | 17,958 | ' |
Acquisition and investment pursuit costs | 1,177 | ' | ' | ' | 4,495 | ' |
Residential segment, other operating costs | 6,023 | ' | ' | ' | 10,622 | ' |
Depreciation and amortization | 4,988 | ' | ' | ' | 8,644 | ' |
Loan loss allowance | 1,160 | ' | ' | ' | 1,915 | ' |
Other expense | 304 | ' | ' | ' | 533 | ' |
Total costs and expenses | 123,078 | ' | ' | ' | 277,895 | ' |
Income before other income (loss), income taxes and non-controlling interests | 69,126 | ' | ' | ' | 157,336 | ' |
Other income: | ' | ' | ' | ' | ' | ' |
Change in fair value of servicing rights | -3,939 | ' | ' | ' | 2,175 | ' |
Change in fair value of investment securities, net | 9,663 | ' | ' | ' | 16,125 | ' |
Change in fair value of mortgage loans held-for-sale, net | 25,857 | ' | ' | ' | 26,315 | ' |
Earnings from unconsolidated entities | 5,355 | ' | ' | ' | 11,889 | ' |
Gain (loss) on sale of investments, net | 8,059 | ' | ' | ' | 22,968 | ' |
Loss on derivative financial instruments, net | -22,451 | ' | ' | ' | -65 | ' |
Foreign currency gain, net | 9,580 | ' | ' | ' | 3,495 | ' |
OTTI | -52 | ' | ' | ' | -453 | ' |
Other income | 3,705 | ' | ' | ' | 3,744 | ' |
Total other income | 35,777 | ' | ' | ' | 86,193 | ' |
Income before income taxes and non-controlling interests | 104,903 | ' | ' | ' | 243,529 | ' |
Income tax provision | 13,721 | ' | ' | ' | 25,691 | ' |
Net income | 91,182 | ' | ' | ' | 217,838 | ' |
Net income attributable to non-controlling interests | 1,467 | ' | ' | ' | 3,599 | ' |
Net income attributable to Starwood Property Trust, Inc. | 89,715 | ' | ' | ' | 214,239 | ' |
LNR VIEs | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' |
Interest income from investment securities | -13,289 | ' | ' | ' | -20,108 | ' |
Servicing fees | -23,057 | ' | ' | ' | -36,782 | ' |
Other revenues | -322 | ' | ' | ' | -595 | ' |
Total revenues | -36,668 | ' | ' | ' | -57,485 | ' |
Costs and expenses: | ' | ' | ' | ' | ' | ' |
Management fees | 46 | ' | ' | ' | 64 | ' |
General and administrative | 183 | ' | ' | ' | 330 | ' |
Total costs and expenses | 229 | ' | ' | ' | 394 | ' |
Income before other income (loss), income taxes and non-controlling interests | -36,897 | ' | ' | ' | -57,879 | ' |
Other income: | ' | ' | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,963 | ' | ' | ' | 79,912 | ' |
Change in fair value of servicing rights | 2,072 | ' | ' | ' | -1,144 | ' |
Change in fair value of investment securities, net | -11,941 | ' | ' | ' | -19,390 | ' |
Earnings from unconsolidated entities | -778 | ' | ' | ' | -974 | ' |
Total other income | 37,316 | ' | ' | ' | 58,404 | ' |
Income before income taxes and non-controlling interests | 419 | ' | ' | ' | 525 | ' |
Net income | 419 | ' | ' | ' | 525 | ' |
Net income attributable to non-controlling interests | $419 | ' | ' | ' | $525 | ' |
Segment_Reporting_Details_2
Segment Reporting (Details 2) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||||
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | $536,834 | ' | $177,671 | $144,199 | $114,027 |
Restricted cash | 82,706 | ' | 3,429 | ' | ' |
Loans held-for-investment, net | 3,790,262 | ' | 2,914,434 | ' | ' |
Loans held-for-sale | 345,139 | ' | ' | ' | ' |
Loans transferred as secured borrowings | 85,590 | ' | 85,901 | ' | ' |
Investment securities | 566,793 | ' | 884,254 | ' | ' |
Intangible assets - servicing rights | 187,732 | ' | ' | ' | ' |
Residential real estate, net | 548,022 | ' | 99,115 | ' | ' |
Non-performing residential loans | 197,716 | ' | 68,883 | ' | ' |
Investment in unconsolidated entities | 138,168 | ' | 32,318 | ' | ' |
Goodwill | 107,099 | ' | ' | ' | ' |
Derivative assets | 9,513 | ' | 9,227 | ' | ' |
Accrued interest receivable | 20,952 | ' | 24,120 | ' | ' |
Other assets | 98,383 | ' | 25,021 | ' | ' |
VIE assets, at fair value | 97,359,666 | ' | ' | ' | ' |
Total Assets | 104,074,575 | ' | 4,324,373 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 189,172 | ' | 30,094 | ' | ' |
Related-party payable | 26,788 | ' | 1,803 | ' | ' |
Dividends payable | 90,130 | ' | 73,796 | 51,629 | ' |
Derivative liabilities | 32,252 | ' | 27,770 | ' | ' |
Secured financing agreements, net | 1,312,044 | ' | 1,305,812 | ' | ' |
Convertible senior notes, net | 995,072 | ' | ' | ' | ' |
Loan transfer secured borrowings | 86,682 | ' | 87,893 | ' | ' |
Loan participation liability | 95,000 | ' | ' | ' | ' |
VIE liabilities, at fair value | 96,934,006 | ' | ' | ' | ' |
Total Liabilities | 99,761,146 | ' | 1,527,168 | ' | ' |
Commitments and contingencies | ' | ' | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Preferred stock | ' | ' | ' | ' | ' |
Common stock | 1,959 | ' | 1,361 | ' | ' |
Additional paid-in capital | 4,295,058 | ' | 2,721,353 | ' | ' |
Treasury stock | -10,642 | ' | -10,642 | ' | ' |
Accumulated other comprehensive income | 69,287 | 60,285 | 79,675 | ' | ' |
Accumulated deficit | -85,339 | ' | -72,401 | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 4,270,323 | ' | 2,719,346 | ' | ' |
Non-controlling interests in consolidated subsidiaries | 43,106 | ' | 77,859 | ' | ' |
Total Equity | 4,313,429 | ' | 2,797,205 | 2,301,238 | 1,765,147 |
Total Liabilities and Equity | 104,074,575 | ' | 4,324,373 | ' | ' |
Real Estate Investment Lending | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 282,553 | ' | 169,427 | ' | ' |
Restricted cash | 38,052 | ' | 3,298 | ' | ' |
Loans held-for-investment, net | 3,782,479 | ' | 2,914,434 | ' | ' |
Loans held-for-sale | 66,018 | ' | ' | ' | ' |
Loans transferred as secured borrowings | 85,590 | ' | 85,901 | ' | ' |
Investment securities | 481,082 | ' | 884,254 | ' | ' |
Investment in unconsolidated entities | 35,413 | ' | 32,318 | ' | ' |
Derivative assets | 6,582 | ' | 9,227 | ' | ' |
Accrued interest receivable | 20,679 | ' | 24,120 | ' | ' |
Other assets | 41,415 | ' | 19,299 | ' | ' |
Total Assets | 4,839,863 | ' | 4,142,278 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 55,953 | ' | 28,987 | ' | ' |
Related-party payable | 20,780 | ' | 1,803 | ' | ' |
Dividends payable | 90,130 | ' | 73,796 | ' | ' |
Derivative liabilities | 27,082 | ' | 27,770 | ' | ' |
Secured financing agreements, net | 1,107,211 | ' | 1,305,812 | ' | ' |
Convertible senior notes, net | 995,072 | ' | ' | ' | ' |
Loan transfer secured borrowings | 86,682 | ' | 87,893 | ' | ' |
Loan participation liability | 95,000 | ' | ' | ' | ' |
Total Liabilities | 2,477,910 | ' | 1,526,061 | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Common stock | 1,959 | ' | 1,361 | ' | ' |
Additional paid-in capital | 2,320,035 | ' | 2,538,860 | ' | ' |
Treasury stock | -10,642 | ' | -10,642 | ' | ' |
Accumulated other comprehensive income | 64,955 | ' | 79,675 | ' | ' |
Accumulated deficit | -47,800 | ' | -70,396 | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 2,328,507 | ' | 2,538,858 | ' | ' |
Non-controlling interests in consolidated subsidiaries | 33,446 | ' | 77,359 | ' | ' |
Total Equity | 2,361,953 | ' | 2,616,217 | ' | ' |
Total Liabilities and Equity | 4,839,863 | ' | 4,142,278 | ' | ' |
Single Family Residential | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 30,089 | ' | 8,244 | ' | ' |
Restricted cash | 1,836 | ' | 131 | ' | ' |
Residential real estate, net | 548,022 | ' | 99,115 | ' | ' |
Non-performing residential loans | 197,716 | ' | 68,883 | ' | ' |
Other assets | 18,882 | ' | 5,722 | ' | ' |
Total Assets | 796,545 | ' | 182,095 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 10,489 | ' | 1,107 | ' | ' |
Total Liabilities | 10,489 | ' | 1,107 | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Additional paid-in capital | 791,817 | ' | 182,493 | ' | ' |
Accumulated deficit | -7,258 | ' | -2,005 | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 784,559 | ' | 180,488 | ' | ' |
Non-controlling interests in consolidated subsidiaries | 1,497 | ' | 500 | ' | ' |
Total Equity | 786,056 | ' | 180,988 | ' | ' |
Total Liabilities and Equity | 796,545 | ' | 182,095 | ' | ' |
LNR | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 223,915 | ' | ' | ' | ' |
Restricted cash | 42,818 | ' | ' | ' | ' |
Loans held-for-investment, net | 7,783 | ' | ' | ' | ' |
Loans held-for-sale | 279,121 | ' | ' | ' | ' |
Investment securities | 410,071 | ' | ' | ' | ' |
Intangible assets - servicing rights | 276,295 | ' | ' | ' | ' |
Investment in unconsolidated entities | 106,675 | ' | ' | ' | ' |
Goodwill | 107,099 | ' | ' | ' | ' |
Derivative assets | 2,931 | ' | ' | ' | ' |
Accrued interest receivable | 273 | ' | ' | ' | ' |
Other assets | 38,799 | ' | ' | ' | ' |
Total Assets | 1,495,780 | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 122,512 | ' | ' | ' | ' |
Related-party payable | 6,008 | ' | ' | ' | ' |
Derivative liabilities | 5,170 | ' | ' | ' | ' |
Secured financing agreements, net | 204,833 | ' | ' | ' | ' |
Total Liabilities | 338,523 | ' | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Additional paid-in capital | 1,183,206 | ' | ' | ' | ' |
Accumulated other comprehensive income | 4,332 | ' | ' | ' | ' |
Accumulated deficit | -30,281 | ' | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 1,157,257 | ' | ' | ' | ' |
Total Equity | 1,157,257 | ' | ' | ' | ' |
Total Liabilities and Equity | 1,495,780 | ' | ' | ' | ' |
Subtotal | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 536,557 | ' | ' | ' | ' |
Restricted cash | 82,706 | ' | ' | ' | ' |
Loans held-for-investment, net | 3,790,262 | ' | ' | ' | ' |
Loans held-for-sale | 345,139 | ' | ' | ' | ' |
Loans transferred as secured borrowings | 85,590 | ' | ' | ' | ' |
Investment securities | 891,153 | ' | ' | ' | ' |
Intangible assets - servicing rights | 276,295 | ' | ' | ' | ' |
Residential real estate, net | 548,022 | ' | ' | ' | ' |
Non-performing residential loans | 197,716 | ' | ' | ' | ' |
Investment in unconsolidated entities | 142,088 | ' | ' | ' | ' |
Goodwill | 107,099 | ' | ' | ' | ' |
Derivative assets | 9,513 | ' | ' | ' | ' |
Accrued interest receivable | 20,952 | ' | ' | ' | ' |
Other assets | 99,096 | ' | ' | ' | ' |
Total Assets | 7,132,188 | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 188,954 | ' | ' | ' | ' |
Related-party payable | 26,788 | ' | ' | ' | ' |
Dividends payable | 90,130 | ' | ' | ' | ' |
Derivative liabilities | 32,252 | ' | ' | ' | ' |
Secured financing agreements, net | 1,312,044 | ' | ' | ' | ' |
Convertible senior notes, net | 995,072 | ' | ' | ' | ' |
Loan transfer secured borrowings | 86,682 | ' | ' | ' | ' |
Loan participation liability | 95,000 | ' | ' | ' | ' |
Total Liabilities | 2,826,922 | ' | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Common stock | 1,959 | ' | ' | ' | ' |
Additional paid-in capital | 4,295,058 | ' | ' | ' | ' |
Treasury stock | -10,642 | ' | ' | ' | ' |
Accumulated other comprehensive income | 69,287 | ' | ' | ' | ' |
Accumulated deficit | -85,339 | ' | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 4,270,323 | ' | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 34,943 | ' | ' | ' | ' |
Total Equity | 4,305,266 | ' | ' | ' | ' |
Total Liabilities and Equity | 7,132,188 | ' | ' | ' | ' |
LNR VIEs | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 277 | ' | ' | ' | ' |
Investment securities | -324,360 | ' | ' | ' | ' |
Intangible assets - servicing rights | -88,563 | ' | ' | ' | ' |
Investment in unconsolidated entities | -3,920 | ' | ' | ' | ' |
Other assets | -713 | ' | ' | ' | ' |
VIE assets, at fair value | 97,359,666 | ' | ' | ' | ' |
Total Assets | 96,942,387 | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 218 | ' | ' | ' | ' |
VIE liabilities, at fair value | 96,934,006 | ' | ' | ' | ' |
Total Liabilities | 96,934,224 | ' | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 8,163 | ' | ' | ' | ' |
Total Equity | 8,163 | ' | ' | ' | ' |
Total Liabilities and Equity | $96,942,387 | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) | 9 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 14, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | |
USD ($) | USD ($) | Mezzanine loan secured by indirect equity interests in subsidiaries | SEREF | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |
USD ($) | USD ($) | Mezzanine loan secured by the Hyatt Regency, located in New Orleans | First mortgage secured by multifamily units and ground floor retails units, located in San Francisco, CA | Mezzanine loan secured by indirect equity interests in subsidiaries | SEREF | SEREF | Preferred equity investment | SWAY | Spin off | |||
USD ($) | USD ($) | USD ($) | First mortgage collateralized by the Heron Tower, located in London | First mortgage collateralized by the Heron Tower, located in London | USD ($) | Expected | Expected | |||||
item | USD ($) | GBP (£) | item | Minimum | USD ($) | |||||||
sqft | USD ($) | |||||||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash contribution | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 |
Initial borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000,000 | ' |
Share exchange ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.2 |
Acquisitions/Origination | 2,506,378,000 | ' | ' | ' | 106,000,000 | 86,000,000 | ' | ' | 288,000,000 | ' | ' | ' |
LIBOR-based collateralized term financing facility | ' | ' | ' | ' | ' | ' | ' | ' | 210,000,000 | ' | ' | ' |
Amount funded at closing | ' | ' | ' | ' | 84,000,000 | ' | ' | ' | ' | ' | ' | ' |
Amount retained as Junior investment | ' | ' | ' | ' | ' | ' | ' | 60,000,000 | ' | ' | ' | ' |
Number of multifamily units collateralized against loan | ' | ' | ' | ' | ' | 432 | ' | ' | ' | ' | ' | ' |
Number of ground floor retails collateralized against loan | ' | ' | ' | ' | ' | 23 | ' | ' | ' | ' | ' | ' |
Amount of loan owned | 4,220,991,000 | 3,000,335,000 | 217,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of loan, net of repayment of financing facility secured | ' | ' | ' | ' | ' | ' | 63,600,000 | ' | ' | ' | ' | ' |
Repayment of financing facility secured by investment | ' | ' | ' | ' | ' | ' | 140,200,000 | ' | ' | ' | ' | ' |
Value of investment at origination | ' | ' | ' | $14,700,000 | ' | ' | ' | ' | ' | $250,000,000 | ' | ' |
Number of properties in portfolio investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41 | ' | ' |
Area of property | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,100,000 | ' | ' |