Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 19, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Ares Commercial Real Estate Corp | ||
Entity Central Index Key | 1,529,377 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 28,755,665 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 351,140,658 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 11,089 | $ 28,343 |
Restricted cash | 379 | 379 |
Loans held for investment ($289,576 and $341,158 related to consolidated VIEs, respectively) | 1,524,873 | 1,726,283 |
Other assets ($843 and $945 of interest receivable related to consolidated VIEs, respectively; $51,582 of other receivables related to consolidated VIEs as of December 31, 2018) | 66,983 | 15,214 |
Total assets | 1,603,324 | 1,770,219 |
LIABILITIES | ||
Secured funding agreements | 777,974 | 957,960 |
Secured term loan | 108,345 | 107,595 |
Collateralized loan obligation securitization debt (consolidated VIE) | 270,737 | 271,211 |
Due to affiliate | 3,163 | 2,628 |
Dividends payable | 8,914 | 7,722 |
Other liabilities ($541 and $414 of interest payable related to consolidated VIEs, respectively) | 8,604 | 3,933 |
Total liabilities | 1,177,737 | 1,351,049 |
Commitments and contingencies (Note 5) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $0.01 per share, 450,000,000 shares authorized at December 31, 2018 and 2017, and 28,755,665 and 28,598,916 shares issued and outstanding at December 31, 2018 and 2017, respectively | 283 | 283 |
Additional paid-in capital | 421,739 | 420,637 |
Accumulated earnings (deficit) | 3,565 | (1,750) |
Total stockholders' equity | 425,587 | 419,170 |
Total liabilities and stockholders' equity | $ 1,603,324 | $ 1,770,219 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Loans held for investment related to consolidated VIE | $ 289,576 | $ 341,158 |
Other assets, interest receivable related to consolidated VIE | 843 | 945 |
Other assets, certificates receivable related to consolidated VIE | 51,582 | 0 |
Other liabilities, interest payable related to consolidated VIE | $ 541 | $ 414 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 28,755,665 | 28,598,916 |
Common stock, shares outstanding | 28,755,665 | 28,598,916 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net interest margin: | |||
Interest income from loans held for investment | $ 118,284 | $ 97,541 | $ 81,963 |
Interest expense | (63,002) | (51,193) | (36,856) |
Net interest margin | 55,282 | 46,348 | 45,107 |
Expenses: | |||
Management and incentive fees to affiliate | 7,418 | 6,569 | 5,956 |
Professional fees | 1,945 | 1,674 | 2,228 |
General and administrative expenses | 3,307 | 2,828 | 2,801 |
General and administrative expenses reimbursed to affiliate | 3,570 | 3,899 | 3,441 |
Total expenses | 16,240 | 14,970 | 14,426 |
Early extinguishment of debt costs | 0 | (768) | 0 |
Income from continuing operations before income taxes | 39,042 | 30,610 | 30,681 |
Income tax expense, including excise tax | 446 | 178 | 230 |
Net income from continuing operations | 38,596 | 30,432 | 30,451 |
Net income from operations of discontinued operations, net of income taxes | 0 | 0 | 4,221 |
Gain on sale of discontinued operations | 0 | 0 | 10,196 |
Net income attributable to ACRE | 38,596 | 30,432 | 44,868 |
Less: Net income attributable to non-controlling interests | 0 | (25) | (4,532) |
Net income attributable to common stockholders | $ 38,596 | $ 30,407 | $ 40,336 |
Basic earnings per common share: | |||
Continuing operations (in dollars per share) | $ 1.35 | $ 1.07 | $ 0.91 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.51 |
Net income (in dollars per share) | 1.35 | 1.07 | 1.42 |
Diluted earnings per common share: | |||
Continuing operations (in dollars per share) | 1.35 | 1.07 | 0.91 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.51 |
Net income (in dollars per share) | $ 1.35 | $ 1.07 | $ 1.41 |
Weighted average number of common shares outstanding: | |||
Basic weighted average shares of common stock outstanding (shares) | 28,529,439 | 28,478,237 | 28,461,853 |
Diluted weighted average shares of common stock outstanding (shares) | 28,656,660 | 28,550,945 | 28,523,306 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Total Stockholders’ Equity | Non-Controlling Interests |
Balance (in shares) at Dec. 31, 2015 | 28,609,650 | |||||
Balance at Dec. 31, 2015 | $ 456,488 | $ 284 | $ 421,179 | $ (11,992) | $ 409,471 | $ 47,017 |
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 3,022 | |||||
Stock‑based compensation | $ 312 | 312 | 312 | |||
Stock repurchased and retired during period, shares | (129,916) | (129,916) | ||||
Stock repurchased and retired during period, value | $ (1,436) | $ (1) | (1,435) | (1,436) | ||
Net income | 44,868 | 40,336 | 40,336 | 4,532 | ||
Dividends declared | (29,654) | (29,654) | (29,654) | |||
Contributions from non-controlling interests | 11 | 11 | ||||
Distributions to non-controlling interests | (40,916) | (40,916) | ||||
Balance (in shares) at Dec. 31, 2016 | 28,482,756 | |||||
Balance at Dec. 31, 2016 | 429,673 | $ 283 | 420,056 | (1,310) | 419,029 | 10,644 |
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 116,160 | |||||
Stock‑based compensation | $ 581 | 581 | 581 | |||
Stock repurchased and retired during period, shares | 0 | |||||
Net income | $ 30,432 | 30,407 | 30,407 | 25 | ||
Dividends declared | (30,847) | (30,847) | (30,847) | |||
Contributions from non-controlling interests | 12 | 12 | ||||
Distributions to non-controlling interests | $ (10,681) | (10,681) | ||||
Balance (in shares) at Dec. 31, 2017 | 28,598,916 | 28,598,916 | ||||
Balance at Dec. 31, 2017 | $ 419,170 | $ 283 | 420,637 | (1,750) | 419,170 | 0 |
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 156,749 | |||||
Stock‑based compensation | $ 1,102 | 1,102 | 1,102 | |||
Stock repurchased and retired during period, shares | 0 | |||||
Net income | $ 38,596 | 38,596 | 38,596 | 0 | ||
Dividends declared | $ (33,281) | (33,281) | (33,281) | |||
Balance (in shares) at Dec. 31, 2018 | 28,755,665 | 28,755,665 | ||||
Balance at Dec. 31, 2018 | $ 425,587 | $ 283 | $ 421,739 | $ 3,565 | $ 425,587 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net income | $ 38,596 | $ 30,432 | $ 44,868 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities (inclusive of amounts related to discontinued operations): | |||
Amortization of deferred financing costs | 5,720 | 7,608 | 6,439 |
Change in mortgage banking activities | 0 | 0 | (10,386) |
Change in fair value of mortgage servicing rights | 0 | 0 | 6,457 |
Accretion of deferred loan origination fees and costs | (6,949) | (6,578) | (5,924) |
Provision for loss sharing | 0 | 0 | (146) |
Cash paid to settle loss sharing obligations | 0 | 0 | (681) |
Originations of mortgage loans held for sale | 0 | 0 | (639,413) |
Sale of mortgage loans held for sale to third parties | 0 | 0 | 571,714 |
Stock-based compensation | 1,102 | 581 | 312 |
Early extinguishment of debt costs | 0 | 768 | 0 |
Gain on sale of discontinued operations | 0 | (10,196) | |
Depreciation expense | 0 | 0 | 167 |
Deferred tax expense | 0 | 0 | 2,049 |
Changes in operating assets and liabilities: | |||
Other assets | 198 | (2,530) | 40,016 |
Due to affiliate | 535 | (71) | 380 |
Other liabilities | 16 | 1,066 | (10,146) |
Net cash provided by (used in) operating activities | 39,218 | 31,276 | (4,490) |
Investing activities: | |||
Issuance of and fundings on loans held for investment | (543,077) | (900,289) | (861,444) |
Principal repayment of loans held for investment | 695,183 | 411,298 | 721,684 |
Proceeds from sale of mortgage loans held for sale | 0 | 73,900 | 0 |
Receipt of origination fees | 5,818 | 9,323 | 6,813 |
Proceeds from sale of discontinued operations, net of cash and restricted cash sold | 0 | (73,004) | |
Purchases of other assets | 0 | 0 | (354) |
Net cash provided by (used in) investing activities | 157,924 | (405,768) | (60,297) |
Financing activities: | |||
Proceeds from secured funding agreements | 642,241 | 923,882 | 1,288,698 |
Repayments of secured funding agreements | (822,227) | (746,635) | (1,030,760) |
Payment of secured funding costs | (2,322) | (8,405) | (5,563) |
Proceeds from issuance of debt of consolidated VIEs | 272,927 | 0 | |
Repayments of debt of consolidated VIEs | 0 | 0 | (255,275) |
Proceeds from warehouse lines of credit | 0 | 0 | 863,382 |
Repayments of warehouse lines of credit | 0 | 0 | (795,684) |
Proceeds from secured term loan | 0 | 0 | 80,000 |
Repayments of secured term loan | 0 | (45,000) | 0 |
Repurchase of common stock | 0 | 0 | (1,436) |
Dividends paid | (32,088) | (30,531) | (29,400) |
Contributions from non-controlling interests | 0 | 12 | 11 |
Distributions to non-controlling interests | 0 | (10,681) | (40,916) |
Net cash provided by (used in) financing activities | (214,396) | 355,569 | 73,057 |
Change in cash, cash equivalents and restricted cash | (17,254) | (18,923) | 8,270 |
Cash, cash equivalents and restricted cash of continuing operations, beginning of period | 28,722 | 47,645 | 18,149 |
Cash, cash equivalents and restricted cash of discontinued operations, beginning of period | 0 | 0 | 21,226 |
Cash, cash equivalents and restricted cash, end of period | 11,468 | 28,722 | 47,645 |
Cash, cash equivalents and restricted cash of continuing operations, end of period | 11,468 | 28,722 | 47,645 |
Cash, cash equivalents and restricted cash of discontinued operations, end of period | 0 | 0 | 0 |
Supplemental Information: | |||
Interest paid during the period | 56,719 | 41,891 | 30,066 |
Income taxes paid during the period | 360 | 240 | 0 |
Supplemental disclosure of noncash investing and financing activities: | |||
Dividends declared, but not yet paid | 8,914 | 7,722 | 7,406 |
Other receivables related to consolidated VIEs | $ 51,582 | $ 0 | $ 0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Commercial Real Estate Corporation (together with its consolidated subsidiaries, the “Company” or “ACRE”) is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. Through Ares Commercial Real Estate Management LLC (“ACREM” or the Company’s “Manager”), a Securities and Exchange Commission (“SEC”) registered investment adviser and a subsidiary of Ares Management Corporation (NYSE: ARES) (“Ares Management” or “Ares”), a publicly traded, leading global alternative asset manager, it has investment professionals strategically located across the United States and Europe who directly source new loan opportunities for the Company with owners, operators and sponsors of commercial real estate (“CRE”) properties. The Company was formed and commenced operations in late 2011. The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in May 2012. The Company is externally managed by its Manager, pursuant to the terms of a management agreement (the “Management Agreement”). The Company is primarily focused on directly originating and managing a diversified portfolio of CRE debt-related investments for the Company’s own account. The Company’s target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investments, including commercial mortgage backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self storage, student housing, residential and other commercial real estate properties, or by ownership interests therein. The Company has elected and qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2012. The Company generally will not be subject to U.S. federal income taxes on its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to the extent that it annually distributes all of its REIT taxable income to stockholders and complies with various other requirements as a REIT. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. Discontinued Operations On June 28, 2016, the Company entered into a Purchase and Sale Agreement (as amended, the “Agreement”) with Barings Real Estate Advisers LLC (formerly known as Cornerstone Real Estate Advisers LLC), a Delaware limited liability company (the “Buyer”), to sell ACRE Capital Holdings LLC (“TRS Holdings”), the holding company that owned the Company’s mortgage banking subsidiary, ACRE Capital LLC (“ACRE Capital”). Under the terms and subject to the conditions set forth in the Agreement, on September 30, 2016, the Buyer purchased from the Company all of the outstanding common units of TRS Holdings (the “ACRE Capital Sale”). ACRE Capital primarily originated, sold and serviced multifamily and senior-living related loans under programs offered by government-sponsored enterprises and by government agencies. Under the terms of the Agreement, the Buyer paid approximately $93 million in cash as consideration for the ACRE Capital Sale. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-20, Presentation of Financial Statements - Discontinued Operations , defines the criteria required for a disposal transaction to qualify for reporting as a discontinued operation. The Company determined that the ACRE Capital Sale met the criteria for discontinued operations. As a result, the operating results of ACRE Capital, which formerly comprised the mortgage banking segment, are presented separately in the Company’s consolidated financial statements as discontinued operations for the year ended December 31, 2016. The operating results of discontinued operations are included in the line item “Net income from operations of discontinued operations, net of income taxes” in the consolidated statement of operations for the year ended December 31, 2016. Summarized financial information for the discontinued mortgage banking segment is shown in Note 13 included in these consolidated financial statements. Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 12 included in these consolidated financial statements for further discussion of the Company’s VIEs. Segment Reporting The Company previously had two reportable business segments: principal lending and mortgage banking. As a result of the ACRE Capital Sale, the operations of the mortgage banking segment have been reclassified as discontinued operations in all periods presented. The Company now conducts and manages its business as one operating segment, rather than multiple operating segments; therefore, the Company no longer provides segment reporting. See Note 13 included in these consolidated financial statements for further discussion of the sale of the mortgage banking segment. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows. Restricted cash includes deposits required under certain Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements). The following table provides a reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows ($ in thousands): For the years ended December 31, 2018 2017 2016 Cash and cash equivalents $ 11,089 $ 28,343 $ 47,270 Restricted cash 379 379 375 Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows $ 11,468 $ 28,722 $ 47,645 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash, loans held for investment and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the FDIC‑insured limit. The Company has exposure to credit risk on its loans held for investment. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate. Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired. Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, the Company will record an allowance to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate. Each loan classified as held for investment is evaluated for impairment on a quarterly basis. Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. For the years ended December 31, 2018, 2017 and 2016 , the Company did not recognize any impairment charges with respect to its loans held for investment. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Preferred equity investments, which are subordinate to any loans but senior to common equity, are accounted for as loans held for investment and are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired, and are included within loans held for investment in the Company’s consolidated balance sheets. The Company accretes or amortizes any discounts or premiums over the life of the related loan held for investment utilizing the effective interest method. Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements) is included within other assets and (ii) the Secured Term Loan (defined in Note 4 included in these consolidated financial statements) and debt securitizations are both included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is included as a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. Revenue Recognition Interest income from loans held for investment is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income from loans held for investment over the initial loan term as a yield adjustment using the effective interest method. A reconciliation of the Company’s interest income from loans held for investment, excluding non-controlling interests, to the Company’s interest income from loans held for investment as included within its consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016 is as follows ($ in thousands): For the years ended December 31, 2018 2017 2016 Interest income from loans held for investment, excluding non-controlling interests $ 118,284 $ 97,506 $ 77,424 Interest income from non-controlling interest investment held by third parties — 35 4,539 Interest income from loans held for investment $ 118,284 $ 97,541 $ 81,963 Net Interest Margin and Interest Expense Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans held for investment as compared to its use of debt leverage. The Company includes interest income from its loans held for investment and interest expense related to its Secured Funding Agreements, securitizations debt and the Secured Term Loan (individually defined in Note 4 included in these consolidated financial statements) in net interest margin. For the years ended December 31, 2018, 2017 and 2016 , interest expense is comprised of the following ($ in thousands): For the years ended December 31, 2018 2017 2016 Secured funding agreements and securitizations debt $ 54,473 $ 37,602 $ 27,856 Secured term loan 8,529 13,591 9,000 Interest expense $ 63,002 $ 51,193 $ 36,856 Income Taxes The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay U.S. federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if a REIT distributes less than the sum of 85% of its ordinary income for the calendar year, 95% of its capital gain net income for the calendar year plus any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if a REIT elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense (benefit), including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitization (as defined below) to the extent it generates excess inclusion income. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS and FL3 TRS. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable U.S. federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS and FL3 TRS. The income tax provision is included in the line item income tax expense (benefit), including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2018 and 2017 , based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS and FL3 TRS recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. Comprehensive Income For the years ended December 31, 2018, 2017 and 2016 , comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. Stock‑Based Compensation The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date. Earnings per Share The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock and convertible debt, except when doing so would be anti‑dilutive. The Company presents both basic and diluted earnings per share amounts for continuing operations and discontinued operations. See Note 7 included in these consolidated financial statements for the earnings per share calculations. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) . Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company has assessed and determined that the application of this guidance does not have a material impact on the Company’s consolidated financial statements, primarily because the majority of the Company’s revenue is accounted for under FASB ASC Topic 310, Receivables , which is scoped out of this standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted after December 15, 2018, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues and clarifies that in the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company has assessed and determined that the application of this guidance does not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the FASB Emerging Issues Task Force) .The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company adopted ASU No. 2016-18 and applied the guidance retrospectively to the prior period consolidated statements of cash flows. SEC Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification , amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity and noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company plans to use the new presentation of consolidated statement of stockholders' equity beginning in 2019. The final rule became effective on November 5, 2018. |
LOANS HELD FOR INVESTMENT
LOANS HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
LOANS HELD FOR INVESTMENT | LOANS HELD FOR INVESTMENT As of December 31, 2018 , the Company’s portfolio included 44 loans held for investment, excluding 76 loans that were repaid or sold since inception. The aggregate originated commitment under these loans at closing was approximately $1.7 billion and outstanding principal was $1.5 billion as of December 31, 2018 . During the year ended December 31, 2018 , the Company funded approximately $544.2 million of outstanding principal and received repayments of $746.8 million of outstanding principal, as described in more detail in the tables below. Such investments are referred to herein as the Company’s “investment portfolio.” As of December 31, 2018 , 89.8% of the Company’s loans have London Interbank Offered Rate (“LIBOR”) floors, with a weighted average floor of 1.38% , calculated based on loans with LIBOR floors. References to LIBOR or “L” are to 30-day LIBOR (unless otherwise specifically stated). The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2018 and 2017 ($ in thousands): As of December 31, 2018 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,489,708 $ 1,498,530 5.2 % 7.0 % 1.7 Subordinated debt and preferred equity investments 35,165 36,213 12.7 % 14.9 % 4.3 Total loans held for investment portfolio $ 1,524,873 $ 1,534,743 5.4 % 7.1 % 1.8 As of December 31, 2017 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,674,169 $ 1,684,439 4.8 % 6.2 % 1.9 Subordinated debt and preferred equity investments 52,114 52,847 9.5 % 10.8 % 3.4 Total loans held for investment portfolio $ 1,726,283 $ 1,737,286 5.0 % 6.3 % 2.0 _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Minimum Loan Borrowing Spread is equal to (a) for floating rate loans, the margin above the applicable index rate (e.g., LIBOR) plus floors, if any, on such applicable index rates, and (b) for fixed rate loans, the applicable interest rate. (3) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2018 and 2017 as weighted by the outstanding principal balance of each loan. A more detailed listing of the Company’s investment portfolio based on information available as of December 31, 2018 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Multifamily FL $89.7 $89.5 L+4.75% 7.8% Sep 2019 I/O Hotel Diversified 68.0 67.4 L+3.60% 6.6% Sep 2021 I/O Office TX 67.2 66.8 L+3.60% 6.6% July 2020 I/O Hotel OR/WA 64.1 63.6 L+3.45% 6.5% May 2021 I/O Multifamily UT 63.5 63.2 L+3.25% 6.0% Dec 2020 I/O Office IL 63.2 63.1 L+3.99% 6.9% Aug 2019 I/O Office IL 61.2 60.8 L+3.75% 6.8% Dec 2020 I/O Office NJ 54.5 54.2 L+4.65% 7.7% July 2020 I/O Office IL 54.1 53.8 L+3.95% 6.8% June 2021 I/O Industrial MN 52.0 51.7 L+3.15% 6.1% Dec 2020 I/O Mixed-use CA 49.0 48.7 L+4.00% 6.9% Apr 2021 I/O Multifamily FL 45.4 45.3 L+4.75% 7.8% Sep 2019 I/O Multifamily TX 42.7 42.5 L+3.30% 6.2% Dec 2020 I/O Student Housing CA 41.8 41.5 L+3.95% 7.0% July 2020 I/O Multifamily FL 41.2 40.8 L+2.60% 5.7% Jan 2022 I/O Student Housing TX 41.0 40.7 L+4.75% 7.8% Jan 2021 I/O Hotel CA 40.0 39.7 L+4.12% 7.0% Jan 2021 I/O Multifamily SC 38.9 38.7 L+3.36% 6.3% May 2021 I/O Student Housing NC 38.7 38.7 L+4.00% 7.5% Feb 2019 I/O Hotel NY 38.6 38.6 L+4.75% 7.3% Dec 2018 (5) I/O Multifamily IL 37.0 36.6 L+3.50% 6.7% Nov 2020 I/O Hotel MI 35.2 35.2 L+4.15% 6.7% July 2019 (6) I/O Hotel MN 31.5 31.2 L+3.55% 6.4% Aug 2021 I/O Multifamily NY 30.1 30.0 L+3.20% 6.1% Dec 2020 I/O Multifamily PA 29.4 29.1 L+3.00% 6.1% Dec 2021 I/O Office CO 27.6 27.3 L+4.15% 7.1% June 2021 I/O Multifamily TX 27.5 27.4 L+3.20% 6.2% Oct 2020 I/O Multifamily CA 26.8 26.7 L+3.85% 6.8% July 2020 I/O Student Housing AL 24.1 24.0 L+4.45% 7.5% Feb 2020 I/O Student Housing TX 24.0 23.8 L+4.10% 7.1% Jan 2021 I/O Hotel IL 21.4 21.2 L+4.40% 7.5% May 2021 I/O Multifamily CA 19.8 19.6 L+3.30% 6.2% Feb 2021 I/O Office PA 19.6 19.5 L+4.70% 7.7% Mar 2020 I/O Multifamily FL 19.2 19.1 L+4.00% 6.9% Nov 2020 I/O Office FL 18.4 18.3 L+4.30% 7.4% Apr 2020 I/O Residential Condominium FL 17.5 17.4 L+8.00% 11.9% Apr 2020 I/O Office CA 17.5 17.3 L+3.40% 6.5% Nov 2021 I/O Residential CA 9.1 8.8 12.00% 14.8% Feb 2020 I/O Office NC 8.0 7.9 L+4.00% 7.1% Nov 2022 I/O Subordinated Debt and Preferred Equity Investments: Office NJ 17.0 16.4 12.00% 12.8% Jan 2026 I/O (7) Residential Condominium NY 10.8 10.6 L+14.00% 17.5% May 2021 I/O Residential Condominium HI 4.7 4.7 14.00% 19.1% Apr 2019 I/O Office CA 2.7 2.7 L+8.25% 10.9% Nov 2021 I/O Mixed-use IL 1.0 0.8 L+12.25% 15.7% Nov 2021 I/O Total/Weighted Average $1,534.7 $1,524.9 7.1% _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 10 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of December 31, 2018 or the LIBOR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2018 as weighted by the outstanding principal balance of each loan. (3) Certain loans are subject to contractual extension options that generally vary between one and two 12 -month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) As of December 31, 2018, the $38.6 million senior mortgage loan, which is collateralized by a hotel property located in New York, is in maturity default. See below in this Note 3 included in these consolidated financial statements for further discussion of this loan. (6) In June 2018, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Michigan loan to July 2019. (7) In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $17.0 million as of December 31, 2018 . The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. The Company has made, and may continue to make, modifications to loans, including loans that are in default. Loan terms that may be modified include interest rates, required prepayments, asset release prices, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and will be determined on a case by case basis. For the years ended December 31, 2018 and 2017 , the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2016 $ 1,313,937 Initial funding 878,834 Origination fees and discounts, net of costs (9,323 ) Additional funding 21,455 Amortizing payments (509 ) Loan payoffs (410,789 ) Loans sold to third parties (1) (73,900 ) Origination fee accretion 6,578 Balance at December 31, 2017 $ 1,726,283 Initial funding 510,529 Origination fees and discounts, net of costs (5,816 ) Additional funding 33,693 Amortizing payments (645 ) Loan payoffs (746,120 ) Origination fee accretion 6,949 Balance at December 31, 2018 $ 1,524,873 _______________________________________________________________________________ (1) In December 2017, the Company sold a senior mortgage loan and a B-Note mortgage loan with outstanding principal of $63.9 million and $10.0 million , respectively, which were both collateralized by an office property located in Texas, to a third party. Both loans were previously classified as held for investment and were sold in order to rebalance and optimize the Company’s loan portfolio. No gain or loss was recognized on the sale. As of December 31, 2018, the $38.6 million senior mortgage loan, which is collateralized by a hotel property located in New York, was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the December 2018 maturity date. The Company evaluated this loan for impairment and concluded that no impairment charge should be recognized as of December 31, 2018 and that this loan should not be placed on non-accrual status as of December 31, 2018. This conclusion was based in part on (1) the current estimated fair market value of the underlying collateral property and applicable reserves and (2) cash flows from operations of the underlying collateral property. The estimated fair market value of the underlying collateral property was determined using the income and market approach. As of December 31, 2018, the loan is current on its regular interest payments. Except as described above, as of December 31, 2018 , all loans were paying in accordance with their contractual terms. No imp airment charges have been recognized during the years ended December 31, 2018, 2017 and 2016 . |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Financing Agreements The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the BAML Facility, the CNB Facility, the MetLife Facility, the UBS Facility and the U.S. Bank Facility (individually defined below and collectively, the “Secured Funding Agreements”) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of December 31, 2018 and 2017 , the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): As of December 31, 2018 2017 Outstanding Balance Total Outstanding Balance Total Wells Fargo Facility $ 274,071 $ 500,000 $ 407,853 $ 500,000 Citibank Facility 184,003 325,000 (1) 175,651 250,000 (1) BAML Facility 36,280 125,000 78,320 125,000 CNB Facility — 50,000 — 50,000 MetLife Facility 135,145 180,000 101,131 180,000 UBS Facility — — (2) 34,000 140,000 U.S. Bank Facility 148,475 185,989 161,005 185,989 Secured Term Loan 110,000 110,000 110,000 110,000 Total $ 887,974 $ 1,475,989 $ 1,067,960 $ 1,540,989 ______________________________________________________________________________ (1) As of December 31, 2017, the Citibank Facility (as defined below) had an accordion feature that provided for an increase in the $250.0 million commitment amount with respect to approved assets, as determined by Citibank, N.A. in its sole discretion. In December 2018, the Company amended the Citibank Facility to, among other things, increase the facility’s commitment amount from $250.0 million to $325.0 million and remove the accordion feature. (2) In October 2018, the UBS Facility (as defined below) matured. The UBS Facility had been repaid in full and its term was not extended. Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly-owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements. Wells Fargo Facility The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $500.0 million . Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari-passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In December 2018, the Company amended the Wells Fargo Facility to extend the initial maturity date to December 14, 2020. The initial maturity date of the Wells Fargo Facility is subject to three 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if all three were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2023. In addition, in December 2018, the Company amended the Wells Fargo Facility to decrease the interest rate on advances from a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.75% to 2.35% to a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.50% to 2.25% . The Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility is utilized. For the years ended December 31, 2018, 2017 and 2016 , the Company incurred a non-utilization fee of $149 thousand , $362 thousand and $340 thousand , respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Wells Fargo Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 , (h) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00 , (i) maintaining a tangible net worth of at least the sum of (1) approximately $135.5 million , plus (2) 80% of the net proceeds raised in all future equity issuances by the Company and (j) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the Wells Fargo Facility, the Company may be required to repay certain amounts under the Wells Fargo Facility. As of December 31, 2018 , the Company was in compliance with all financial covenants of the Wells Fargo Facility. Citibank Facility The Company is party to a $325.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. In December 2018, the Company amended the Citibank Facility to increase the facility’s commitment amount from $250.0 million to $325.0 million and extend the initial maturity date to December 13, 2021. The initial maturity date of the Citibank Facility is subject to two 12 -month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if both were exercised, would extend the maturity date of the Citibank Facility to December 13, 2023. In addition, in December 2018, the Company amended the Citibank Facility to decrease the interest rate on advances from a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 2.25% to 2.50% , subject to certain exceptions, to a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 1.50% to 2.25% , subject to certain exceptions. Subsequent to the December 2018 amendment to the Citibank Facility, the Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility to the extent less than 75% of the Citibank Facility is utilized. Prior to December 2018, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility. For the years ended December 31, 2018, 2017 and 2016 , the Company incurred a non-utilization fee of $143 thousand , $165 thousand and $93 thousand , respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Citibank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million , the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00 , (d) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Citibank Facility, the Company may be required to repay certain amounts under the Citibank Facility. The Citibank Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2018 , the Company was in compliance with all financial covenants of the Citibank Facility. BAML Facility The Company is party to a $125.0 million Bridge Loan Warehousing Credit and Security Agreement with Bank of America, N.A. (“Bank of America”) (the “BAML Facility”). Under the BAML Facility, the Company may obtain advances secured by eligible commercial mortgage loans collateralized by multifamily properties. Bank of America may approve the loans on which advances are made under the BAML Facility in its sole discretion. In May 2018, the Company amended the BAML Facility to extend the period during which the Company may request individual loans under the facility to May 23, 2019. Individual advances under the BAML Facility generally have a two -year maturity, subject to one 12 -month extension at the Company’s option upon the satisfaction of certain conditions and applicable extension fees being paid. In addition, in May 2018, the final maturity date of individual loans under the BAML Facility was extended to May 23, 2022. Since October 2, 2017, advances under the BAML Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.00% , subject to certain exceptions. Prior to and including October 1, 2017, advances under the BAML Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread ranging from 2.25% to 2.75% depending upon the type of asset securing such advance. The Company incurs a non-utilization fee of 12.5 basis points per annum on the average daily available balance of the BAML Facility to the extent less than 50% of the BAML Facility is utilized. For the years ended December 31, 2018, 2017 and 2016 , the Company incurred a non-utilization fee of $21 thousand , $52 thousand and $52 thousand , respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The BAML Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the BAML Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 , (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after September 30, 2013, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00 , (v) limitations on mergers, consolidations, transfers of assets and similar transactions and (vi) maintaining its status as a REIT. As of December 31, 2018 , the Company was in compliance with all financial covenants of the BAML Facility. CNB Facility The Company is party to a $50.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. In February 2018, the Company exercised a 12-month extension option on the CNB Facility to extend the initial maturity date to March 10, 2019. The Company has one additional 12 -month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date of the CNB Facility to March 10, 2020. Advances under the CNB Facility accrue interest at a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12 -month interest period plus 3.00% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50% , or the sum of one-month LIBOR plus 1.00% ) plus 1.25% ; provided that in no event shall the interest rate be less than 3.00% . Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue non-utilization fees at the rate of 0.375% per annum. For the years ended December 31, 2018, 2017 and 2016 , the Company incurred a non-utilization fee of $166 thousand , $184 thousand and $122 thousand , respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The CNB Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets, (e) maintenance of minimum total asset value by the borrower under the CNB Facility and its subsidiaries and (f) prohibitions of certain change of control events. The agreements governing the CNB Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 , (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after March 12, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00 , (v) limitations on mergers, consolidations, transfers of assets and similar transactions and (vi) maintaining its status as a REIT. As of December 31, 2018 , the Company was in compliance with all financial covenants of the CNB Facility. MetLife Facility The Company and certain of its subsidiaries are party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. The initial maturity date of the MetLife Facility is August 12, 2020, subject to two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the MetLife Facility to August 12, 2022. Since August 4, 2017, advances under the MetLife Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.30% . Prior to and including August 3, 2017, advances under the MetLife Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.35% . Effective in February 2018, the Company began incurring a non-utilization fee of 25 basis points per annum on the average daily available balance of the MetLife Facility to the extent less than 65% of the MetLife Facility is utilized. For the year ended December 31, 2018 , the Company incurred a non-utilization fee of $7 thousand . The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The MetLife Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default and (d) limitations on dispositions of assets. The agreements governing the MetLife Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 , (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after August 13, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00 , and (v) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the MetLife Facility, the Company may be required to repay certain amounts under the MetLife Facility. As of December 31, 2018 , the Company was in compliance with all financial covenants of the MetLife Facility. UBS Facility The Company and certain of its subsidiaries were party to a $140.0 million revolving master repurchase facility with UBS Real Estate Securities Inc. (“UBS”) (the “UBS Facility”), pursuant to which the Company could have sold, and later repurchased, commercial mortgage loans and, under certain circumstances, other assets meeting defined eligibility criteria that were approved by UBS in its sole discretion. In October 2018, the UBS Facility matured. The UBS Facility had been repaid in full and its term was not extended. The interest rate on advances under the UBS Facility was the sum of one-month LIBOR plus (a) 1.88% per annum, for assets that were subject to an advance for one year or less, (b) 2.08% per annum, for assets that were subject to an advance in excess of one year but less than two years and (c) 2.28% per annum, for assets that were subject to an advance for greater than two years. The UBS Facility contained margin call provisions that provided UBS with certain rights if the applicable percentage of the aggregate asset value of the purchased assets under the UBS Facility was less than the aggregate purchase price for such assets. The UBS Facility was fully guaranteed by the Company and required the Company to maintain certain financial and other covenants including the following: (a) maintain a ratio of (i) total debt to tangible net worth of not more than 4.00 to 1.00 and (ii) recourse debt to tangible net worth of not more than 3.00 to 1.00 , (b) maintain a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of net cash proceeds received from all subsequent equity issuances by the Company and (c) maintain a fixed charge coverage ratio (expressed as the ratio of adjusted-EBITDA (net income before net interest expense, income tax expense, depreciation and amortization) to fixed charges) for the immediately preceding 12 -month period ending on the last day of the applicable reporting period of at least 1.25 to 1.00 . In addition, the UBS Facility contained certain affirmative and negative covenants and provisions regarding events of default that were normal and customary for similar repurchase facilities. U.S. Bank Facility The Company and certain of its subsidiaries are party to a $186.0 million master repurchase and securities contract with U.S. Bank National Association (“U.S. Bank”) (the “U.S. Bank Facility”). Pursuant to the U.S. Bank Facility, the Company is permitted to sell, and later repurchase, eligible commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing, manufactured housing or self storage properties. U.S. Bank may approve the mortgage loans that are subject to the U.S. Bank Facility in its sole discretion. The initial maturity date of the U.S. Bank Facility is July 31, 2020, subject to two 12 -month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the U.S. Bank Facility to July 31, 2022. Advances under the U.S. Bank Facility generally accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.25% , unless otherwise agreed between U.S. Bank and the Company, depending upon the mortgage loan sold to U.S. Bank in the applicable transaction. The Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the U.S. Bank Facility to the extent less than 50% of the U.S. Bank Facility is utilized. For the year ended December 31, 2018 , the Company did not incur a non-utilization fee. For the years ended December 31, 2017 and 2016, the Company incurred a non-utilization fee of $83 thousand and $77 thousand , respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The U.S. Bank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 , (h) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12 -month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00 , (i) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after September 30, 2013, (j) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the U.S. Bank Facility, the Company may be required to repay certain amounts under the U.S. Bank Facility and (k) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million , the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity). As of December 31, 2018 , the Company was in compliance with all financial covenants of the U.S. Bank Facility. Secured Term Loan The Company and certain of its subsidiaries are party to a $110.0 million Credit and Guaranty Agreement with the lenders referred to therein and Cortland Capital Market Services LLC, as administrative agent and collateral agent for the lenders (the “Secured Term Loan”). The initial maturity date of the Secured Term Loan is December 22, 2020, subject to one 12 -month extension, which may be exercised at the Company’s option, provided there are no existing events of default under the Secured Term Loan, which, if exercised, would extend the maturity date of the Secured Term Loan to December 22, 2021. During the extension period, the spread on advances under the Secured Term Loan increases every three months by 0.125% , 0.375% and 0.750% per annum, respectively, beginning after the third-month of the extension period. Since December 22, 2017, advances under the Secured Term Loan accrue interest at a per annum rate equal to the sum of, at the Company’s option, one, two, three or six-month LIBOR plus a spread of 5.00% . Prior to and including December 21, 2017, advances under the Secured Term Loan accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 6.00% (with a 1.00% LIBOR floor). In December 2017, the Company voluntarily elected to repay $45.0 million of outstanding principal on the Secured Term Loan prior to the scheduled maturity as permitted by the contractual terms of the Secured Term Loan. For the year ended December 31, 2017, the Company incurred early extinguishment of debt costs of $768 thousand in connection with the $45.0 million repayment of outstanding principal on the Secured Term Loan, which was comprised of the pro-rata share of the unamortized deferred debt issuance costs and original issue discounts being allocated to the outstanding principal that was repaid. The costs are included within early extinguishment of debt costs in the Company’s consolidated statements of operations. The Company made an initial draw of $75.0 million on December 9, 2015, the closing date. The Company drew the remaining $80.0 million of the Secured Term Loan on September 9, 2016. The Company was subject to a monthly non-utilization fee equal to 1.0% per annum on the unused commitment amount during the nine-month commitment period following the closing date for which the $80.0 million of the Secured Term Loan was not utilized. For the years ended December 31, 2018 and 2017, the Company did not incur a non-utilization fee. For the year ended December 31, 2016, the Company incurred a non-utilization fee of $560 thousand . The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The total original issue discount on the Secured Term Loan draws was $2.6 million , which represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. For the year ended December 31, 2018 , the estimated per annum effective interest rate of the Secured Term Loan, which is equal to LIBOR plus the spread plus the accretion of the original issue discount and associated costs, was 7.6% . For the year ended December 31, 2017, the estimated per annum effective interest rate of the Secured Term Loan was 8.7% prior to and including December 21, 2017 and 7.2% subsequent to December 21, 2017. For the year ended December 31, 2016, the estimated per annum effective interest rate was 8.5% . The Company's obligations under the Secured Term Loan are guaranteed by certain subsidiaries of the Company. Certain subsidiaries of the Company entered into a Pledge and Security Agreement with the collateral agent under the Secured Term Loan, pursuant to which the obligations of the Company and the subsidiary guarantors under the Secured Term Loan are each secured by equity interests in certain of the Company's indirect subsidiaries and other assets. In addition, the Company and certain of its subsidiaries entered into a Negative Pledge Agreement with the collateral agent under the Secured Term Loan, which prohibits pledging or otherwise encumbering, subject to permitted encumbrances, certain of the assets which were not subject to the Pledge and Security Agreement. The Secured Term Loan contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing agreements, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the Secured Term Loan also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00 , (ii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2015, plus 80% of the net cash proceeds raised in subsequent equity issuances by the Company, (iii) maintaining an asset coverage ratio greater than 110% , (iv) maintaining an unencumbered asset ratio greater than 120% , (v) limitations on mergers, consolidations, transfers of assets and similar transactions, (vi) maintaining its status as a REIT and (vii) maintaining at least 65% of loans held for investment as senior commercial real estate loans, as measured by the average daily outstanding principal balance of all loans held for investment during a fiscal quarter and as adjusted for non-controlling interests. As of December 31, 2018 , the Company was in compliance with all financial covenants of the Secured Term Loan. Financing Agreements Maturities At December 31, 2018 , approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousa |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES As of December 31, 2018 and 2017 , the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of December 31, 2018 2017 Total commitments $ 1,677,615 $ 1,847,534 Less: funded commitments (1,534,743 ) (1,737,286 ) Total unfunded commitments $ 142,872 $ 110,248 The Company from time to time may be party to litigation relating to claims arising in the normal course of business. As of December 31, 2018 , the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Stock Buyback Program In May 2015, the Company announced that the Company’s board of directors authorized the Company to repurchase up to $20.0 million of the Company’s outstanding common stock over a period of one year (the “Stock Buyback Program”). In February 2016, the Company’s board of directors increased the size of the existing $20.0 million Stock Buyback Program to $30.0 million and extended the Stock Buyback Program through March 31, 2017. The Stock Buyback Program was not extended after March 31, 2017. Purchases made pursuant to the Stock Buyback Program could have been made in either the open market or in privately negotiated transactions, from time to time and as permitted by federal securities laws and other legal requirements. In connection with this Stock Buyback Program, in March 2016, the Company entered into a Rule 10b5-1 plan to repurchase shares of the Company’s common stock in accordance with certain parameters set forth in the Stock Buyback Program. During the years ended December 31, 2018 and 2017, no shares of the Company’s common stock were repurchased. During the year ended December 31, 2016, the Company repurchased a total of 129,916 shares of the Company’s common stock in the open market for an aggregate purchase price of approximately $1.4 million , including expenses paid. The shares were repurchased at an average price of $ 11.06 per share, including expenses paid. Common Stock There were no shares issued in public or private offerings for the years ended December 31, 2018, 2017 and 2016 . See “Equity Incentive Plan” below for shares issued under the plan. Equity Incentive Plan On April 23, 2012, the Company adopted an equity incentive plan. In April 2018, the Company’s board of directors authorized, and in June 2018, the Company’s stockholders approved, an amended and restated equity incentive plan that increased the total amount of shares of common stock the Company may grant thereunder to 1,390,000 shares (the “Amended and Restated 2012 Equity Incentive Plan”). Pursuant to the Amended and Restated 2012 Equity Incentive Plan, the Company may grant awards consisting of restricted shares of the Company’s common stock, restricted stock units and/or other equity-based awards to the Company’s outside directors, employees of the Manager, officers, ACREM and other eligible awardees under the plan. Any restricted shares of the Company’s common stock and restricted stock units will be accounted for under FASB ASC Topic 718, Compensation—Stock Compensation , resulting in stock-based compensation expense equal to the grant date fair value of the underlying restricted shares of common stock or restricted stock units. Restricted stock grants generally vest ratably over a one to four year period from the vesting start date. The grantee receives additional compensation for each outstanding restricted stock grant, classified as dividends paid, equal to the per-share dividends received by common stockholders. The following table details the restricted stock grants awarded as of December 31, 2018 : Grant Date Vesting Start Date Shares Granted May 1, 2012 July 1, 2012 35,135 June 18, 2012 July 1, 2012 7,027 July 9, 2012 October 1, 2012 25,000 June 26, 2013 July 1, 2013 22,526 November 25, 2013 November 25, 2016 30,381 January 31, 2014 August 31, 2015 48,273 February 26, 2014 February 26, 2014 12,030 February 27, 2014 August 27, 2014 22,354 June 24, 2014 June 24, 2014 17,658 June 24, 2015 July 1, 2015 25,555 April 25, 2016 July 1, 2016 10,000 June 27, 2016 July 1, 2016 24,680 April 25, 2017 April 25, 2018 81,710 June 7, 2017 July 1, 2017 18,224 October 17, 2017 January 2, 2018 7,278 December 15, 2017 January 2, 2018 8,948 May 14, 2018 July 2, 2018 31,766 June 26, 2018 July 1, 2019 67,918 December 14, 2018 March 31, 2019 57,065 Total 553,528 The following tables summarize the (i) non-vested shares of restricted stock and (ii) the vesting schedule of shares of restricted stock for the Company’s directors and officers and employees of the Manager as of December 31, 2018 : Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager Total Balance at December 31, 2017 21,394 90,658 112,052 Granted 31,766 124,983 156,749 Vested (30,606 ) (36,185 ) (66,791 ) Forfeited — — — Balance at December 31, 2018 22,554 179,456 202,010 Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager Total 2019 18,384 62,303 80,687 2020 3,336 65,313 68,649 2021 834 38,072 38,906 2022 — 13,768 13,768 2023 — — — Total 22,554 179,456 202,010 The following table summarizes the restricted stock compensation expense included within general and administrative expenses for ACRE and compensation and benefits for ACRE Capital (which is included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations), the total fair value of shares vested and the weighted average grant date fair value of the restricted stock granted to the Company’s directors and officers, employees of the Manager and employees of ACRE Capital for the years ended December 31, 2018, 2017 and 2016 ($ in thousands): For the years ended December 31, 2018 2017 2016 Restricted Stock Grants Restricted Stock Grants Restricted Stock Grants Directors Officers and Employees of the Manager Employees Total Directors Officers and Employees of the Manager Employees Total Directors Officers and Employees of the Manager Employees Total Compensation expense (1) $ 427 $ 675 $ — $ 1,102 $ 317 $ 264 $ — $ 581 $ 355 $ 53 $ (96 ) $ 312 Total fair value of shares vested (2) 405 449 — 854 347 — — 347 342 54 383 779 Weighted average grant date fair value 427 1,759 — 2,186 338 1,254 — 1,592 412 — — 412 ______________________________________________________________________________ (1) Compensation expense for ACRE Capital employees is included within compensation and benefits expense for the year ended December 31, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. See Note 13 included in these consolidated financial statements for more information. (2) Based on the closing price of the Company’s common stock on the NYSE on each vesting date. As of December 31, 2018, 2017 and 2016 , the total compensation cost related to non-vested awards not yet recognized totaled $2.3 million , $1.2 million and $180 thousand , respectively, and the weighted average period over which the non-vested awards are expected to be recognized is 2.10 years, 1.95 years and 1.02 years, respectively. Non-Controlling Interests The non-controlling interests held by third parties in the Company's consolidated balance sheets represented the equity interests in a limited liability company, ACRC KA Investor LLC (“ACRC KA”) that were not owned by the Company. A portion of ACRC KA's consolidated equity and net income were allocated to these non-controlling interests held by third parties based on their pro-rata ownership of ACRC KA. As of December 31, 2017, the equity interests in ACRC KA held by the Company and third parties had been repaid in full and as such, there was no equity outstanding that was allocated to non-controlling interests held by third parties. As of December 31, 2016, ACRC KA’s total equity was $21.7 million , of which $11.1 million was owned by the Company and $10.6 million was allocated to non-controlling interests held by third parties. See Note 12 included in these consolidated financial statements for more information on ACRC KA. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following information sets forth the computations of basic and diluted earnings per common share from continuing operations and discontinued operations for the years ended December 31, 2018, 2017 and 2016 ($ in thousands, except share and per share data): For the years ended December 31, 2018 2017 2016 Net income from continuing operations, less non-controlling interests $ 38,596 $ 30,407 $ 25,919 Net income from discontinued operations, including gain on sale of discontinued operations $ — $ — $ 14,417 Divided by: Basic weighted average shares of common stock outstanding: 28,529,439 28,478,237 28,461,853 Weighted average non-vested restricted stock 127,221 72,708 61,453 Diluted weighted average shares of common stock outstanding: 28,656,660 28,550,945 28,523,306 Basic earnings per common share: Continuing operations $ 1.35 $ 1.07 $ 0.91 Discontinued operations — — 0.51 Net income $ 1.35 $ 1.07 $ 1.42 Diluted earnings per common share: Continuing operations $ 1.35 $ 1.07 $ 0.91 Discontinued operations — — 0.51 Net income $ 1.35 $ 1.07 $ 1.41 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX The Company wholly-owns ACRC Lender W TRS LLC, which is a TRS formed in order to issue and hold certain loans intended for sale. The Company also wholly-owns ACRC 2017-FL3 TRS LLC, which is a TRS formed in order to hold a portion of the CLO Securitization (as defined below) to the extent it generates excess inclusion income. The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2018, 2017 and 2016 ($ in thousands): For the years ended December 31, 2018 2017 2016 Current $ 84 $ 25 $ 21 Deferred — — — Excise tax 362 153 209 Total income tax expense, including excise tax $ 446 $ 178 $ 230 For the years ended December 31, 2018, 2017 and 2016 , the Company incurred an expense of $ 362 thousand , $153 thousand and $209 thousand , respectively, for U.S. federal excise tax. Excise tax represents a 4% tax on the sum of a portion of the Company’s ordinary income and net capital gains not distributed during the calendar year (including any distribution declared in the fourth quarter and paid following January) plus any prior year shortfall. If it is determined that an excise tax liability exists for the current year, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. The TRSs recognize interest and penalties related to unrecognized tax benefits within income tax expense in the Company’s consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the Company’s consolidated balance sheets. As of December 31, 2018 , tax years 2015 through 2018 remain subject to examination by taxing authorities. The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company follows FASB ASC Topic 820-10, Fair Value Measurement (“ASC 820-10”), which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure requirements for fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. In accordance with ASC 820-10, the inputs used to measure fair value are summarized in the three broad levels listed below: • Level 1-Quoted prices in active markets for identical assets or liabilities. • Level 2-Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. • Level 3-Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies. Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced. As of December 31, 2018 and 2017 , the Company did not have any assets or liabilities required to be recorded at fair value on a recurring or nonrecurring basis. As of December 31, 2018 and 2017 , the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of December 31, 2018 2017 Level in Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Financial assets: Loans held for investment 3 $ 1,524,873 $ 1,534,743 $ 1,726,283 $ 1,737,286 Financial liabilities: Secured funding agreements 2 $ 777,974 $ 777,974 $ 957,960 $ 957,960 Secured term loan 2 108,345 110,000 107,595 110,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 270,737 272,927 271,211 272,927 The carrying values of cash and cash equivalents, restricted cash, interest receivable, due to affiliate liability and accrued expenses, which are all categorized as Level 2 within the fair value hierarchy, approximate their fair values due to their short-term nature. Loans held for investment are recorded at cost, net of unamortized loan fees and origination costs and net of an allowance for loan losses. The Company may record fair value adjustments on a nonrecurring basis when it has determined that it is necessary to record a specific reserve against a loan and the Company measures such specific reserve using the fair value of the loan’s collateral. To determine the fair value of the collateral, the Company may employ different approaches depending on the type of collateral. The Financing Agreements and collateralized loan obligation (“CLO”) securitization debt are recorded at outstanding principal, which is the Company’s best estimate of the fair value. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Management Agreement The Company is party to a Management Agreement under which ACREM, subject to the supervision and oversight of the Company’s board of directors, is responsible for, among other duties, (a) performing all of the Company’s day-to-day functions, (b) determining the Company’s investment strategy and guidelines in conjunction with the Company’s board of directors, (c) sourcing, analyzing and executing investments, asset sales and financing, and (d) performing portfolio management duties. In addition, ACREM has an Investment Committee that oversees compliance with the Company’s investment strategy and guidelines, investment portfolio holdings and financing strategy. In exchange for its services, ACREM is entitled to receive a base management fee, an incentive fee, expense reimbursements, grants of equity-based awards pursuant to the Company’s Amended and Restated 2012 Equity Incentive Plan and a termination fee, if applicable. The base management fee is equal to 1.5% of the Company’s stockholders’ equity per annum, which is calculated and payable quarterly in arrears in cash. For purposes of calculating the base management fee, stockholders’ equity means: (a) the sum of (i) the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro-rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (ii) the Company’s retained earnings at the end of the most recently completed fiscal quarter determined in accordance with GAAP (without taking into account any non-cash equity compensation expense incurred in current or prior periods); less (b) (x) any amount that the Company has paid to repurchase the Company’s common stock since inception, (y) any unrealized gains and losses and other non-cash items that have impacted stockholders’ equity as reported in the Company’s consolidated financial statements prepared in accordance with GAAP, and (z) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between ACREM and the Company’s independent directors and approval by a majority of the Company’s independent directors. As a result, the Company’s stockholders’ equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown in the Company’s consolidated financial statements. The incentive fee is an amount, not less than zero , equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) the Company’s Core Earnings (as defined below) for the previous 12 -month period, and (B) the product of (1) the weighted average of the issue price per share of the Company’s common stock of all of the Company’s public offerings of common stock multiplied by the weighted average number of all shares of common stock outstanding including any restricted shares of the Company’s common stock, restricted stock units or any shares of the Company’s common stock not yet issued, but underlying other awards granted under the Company’s Amended and Restated 2012 Equity Incentive Plan (see Note 6 included in these consolidated financial statements) in the previous 12 -month period, and (2) 8% ; and (b) the sum of any incentive fees earned by ACREM with respect to the first three fiscal quarters of such previous 12 -month period; provided, however, that no incentive fee is payable with respect to any fiscal quarter unless cumulative Core Earnings for the 12 most recently completed fiscal quarters is greater than zero . “Core Earnings” is a non-GAAP measure and is defined as GAAP net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that any of the Company’s target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), and one-time events pursuant to changes in GAAP and certain non-cash charges after discussions between ACREM and the Company’s independent directors and after approval by a majority of the Company’s independent directors. For the years ended December 31, 2018, 2017 and 2016 , $ 1.2 million , $381 thousand and $348 thousand of incentive fees were incurred, respectively. The Company reimburses ACREM at cost for operating expenses that ACREM incurs on the Company’s behalf, including expenses relating to legal, financial, accounting, servicing, due diligence and other services. The Company will not reimburse ACREM for the salaries and other compensation of its personnel, except for the allocable share of the salaries and other compensation of the Company’s (a) Chief Financial Officer, based on the percentage of his time spent on the Company’s affairs and (b) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of ACREM or its affiliates who spend all or a portion of their time managing the Company’s affairs based on the percentage of their time spent on the Company’s affairs. The Company is also required to pay its pro-rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of ACREM and its affiliates that are required for the Company’s operations. The term of the Management Agreement ends on May 1, 2019 , with automatic one -year renewal terms thereafter. Except under limited circumstances, upon a termination of the Management Agreement, the Company will pay ACREM a termination fee equal to three times the average annual base management fee and incentive fee received by ACREM during the 24 -month period immediately preceding the most recently completed fiscal quarter prior to the date of termination, each as described above. Certain of the Company’s subsidiaries, along with the Company’s lenders under certain of the Company’s Secured Funding Agreements, as well as under the CLO transaction have entered into various servicing agreements with ACREM’s subsidiary servicer, Ares Commercial Real Estate Servicer LLC (“ACRES”). The Company’s Manager will specially service, as needed, certain of the Company’s investments. Effective May 1, 2012, ACRES agreed that no servicing fees pursuant to these servicing agreements would be charged to the Company or its subsidiaries by ACRES or the Manager for so long as the Management Agreement remains in effect, but that ACRES will continue to receive reimbursement for overhead related to servicing and operational activities pursuant to the terms of the Management Agreement. The following table summarizes the related party costs incurred by the Company related to continuing operations for the years ended December 31, 2018, 2017 and 2016 and amounts payable to the Company’s Manager as of December 31, 2018 and 2017 ($ in thousands): Incurred Payable For the years ended December 31, As of December 31, 2018 2017 2016 2018 2017 Affiliate Payments Management fees $ 6,268 $ 6,188 $ 5,608 $ 1,576 $ 1,549 Incentive fees 1,150 381 348 540 — General and administrative expenses 3,570 3,899 3,441 996 1,016 Direct costs 224 (1) 304 (1) 848 (2) 51 63 Total $ 11,212 $ 10,772 $ 10,245 $ 3,163 $ 2,628 ______________________________________________________________________________ (1) For the years ended December 31, 2018 and 2017 , direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations. (2) For the year ended December 31, 2016 , direct costs incurred are included within (i) general and administrative expenses of $486 thousand and (ii) interest expense of $362 thousand in the Company’s consolidated statements of operations. Investments in Loans From time to time, the Company may co-invest with other investment vehicles managed by Ares Management or its affiliates, including the Manager, and their portfolio companies, including by means of splitting investments, participating in investments or other means of syndication of investments. For such co-investments, the Company expects to act as the administrative agent for the holders of such investments provided that the Company maintains a majority of the aggregate investment. No fees will be received by the Company for performing such service. The Company will be responsible for its pro-rata share of costs and expenses for such co-investments, including due diligence costs for transactions which fail to close. The Company’s investment in such co-investments are made on a pari-passu basis with the other Ares managed investment vehicles and the Company is not obligated to provide, nor has it provided, any financial support to the other Ares managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment and the Company recognizes only the carrying value of its investment in its consolidated balance sheets. In May 2018, the Company participated in originating a $25.0 million mezzanine loan commitment on a property with in-place development rights for the construction of a mixed-use property located in Illinois, with a participation interest of $15.3 million held by the Company and $9.7 million held by other Ares managed investment vehicles. As of December 31, 2018 , the total outstanding principal balance on the participation interest held by the Company was $974 thousand . In August 2018, the Company participated in originating a $12.0 million pre-construction mezzanine loan commitment on a property with in-place development rights for a residential condominium project located in Hawaii. The mezzanine loan was split into separate notes with an $8.0 million note held by the Company and $4.0 million of notes held by other Ares managed investment vehicles. As of December 31, 2018 , the total outstanding principal balance on the note held by the Company was $4.7 million . In October 2018, the Company participated in originating a $22.0 million pre-construction senior mortgage loan commitment on a property with in-place development rights for a residential condominium project located in Florida. The senior mortgage loan was split into separate notes with a $17.5 million note held by the Company and $4.5 million of notes held by other Ares managed investment vehicles. As of December 31, 2018, the total outstanding principal balance on the note held by the Company was $17.5 million . In October 2018, the Company participated in originating a $23.3 million mezzanine loan commitment on a property with in-place development rights for a residential condominium conversion project located in New York. The mezzanine loan was split into separate notes with a $14.0 million note held by the Company and $9.3 million of notes held by other Ares managed investment vehicles. As of December 31, 2018, the total outstanding principal balance on the note held by the Company was $10.8 million . Credit Support Fee Agreement In July 2014, the Company and certain of its subsidiaries entered into a Credit Support Fee Agreement with Ares Management under which the Company agreed to pay Ares Management a credit support fee in an amount equal to 1.50% per annum times the average amount of the loans outstanding under the $75.0 million revolving funding facility (the “July 2014 CNB Facility”) with City National Bank and to reimburse Ares Management for its out-of-pocket costs and expenses in connection with the transaction. For the year ended December 31, 2016, the Company incurred a credit support fee of $362 thousand under the July 2014 CNB Facility which is included within interest expense in the Company’s consolidated statements of operations. On September 30, 2016, the July 2014 CNB Facility was repaid in full and its terms were not extended. In conjunction with the repayment in full of the July 2014 CNB Facility, the Credit Support Fee Agreement was terminated. |
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS AND DISTRIBUTIONS | 12 Months Ended |
Dec. 31, 2018 | |
DIVIDENDS AND DISTRIBUTIONS | |
DIVIDENDS AND DISTRIBUTIONS | DIVIDENDS AND DISTRIBUTIONS The following table summarizes the Company’s dividends declared during the years ended December 31, 2018, 2017 and 2016 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount October 30, 2018 December 28, 2018 January 15, 2019 $ 0.31 $ 8,914 July 26, 2018 September 28, 2018 October 16, 2018 0.29 8,323 May 1, 2018 June 29, 2018 July 17, 2018 0.28 8,036 March 1, 2018 March 29, 2018 April 17, 2018 0.28 8,008 Total cash dividends declared for the year ended December 31, 2018 $ 1.16 $ 33,281 November 1, 2017 December 29, 2017 January 16, 2018 $ 0.27 $ 7,722 August 3, 2017 September 29, 2017 October 16, 2017 0.27 7,717 May 2, 2017 June 30, 2017 July 17, 2017 0.27 7,718 March 7, 2017 March 31, 2017 April 17, 2017 0.27 7,690 Total cash dividends declared for the year ended December 31, 2017 $ 1.08 $ 30,847 November 3, 2016 December 30, 2016 January 17, 2017 $ 0.26 $ 7,406 August 4, 2016 September 30, 2016 October 17, 2016 0.26 7,406 May 5, 2016 June 30, 2016 July 15, 2016 0.26 7,413 March 1, 2016 March 31, 2016 April 15, 2016 0.26 7,429 Total cash dividends declared for the year ended December 31, 2016 $ 1.04 $ 29,654 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2018 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Consolidated VIEs As discussed in Note 2 , the Company evaluates all of its investments and other interests in entities for consolidation, including its investments in: (a) the CLO Securitization (as defined below) and (b) a preferred equity investment in a LLC entity (discussed below), all of which are generally considered to be variable interests in a VIE. CLO Securitization On March 2, 2017, ACRE Commercial Mortgage 2017-FL3 Ltd. (the “Issuer”) and ACRE Commercial Mortgage 2017-FL3 LLC (the “Co-Issuer”), both wholly-owned indirect subsidiaries of the Company, entered into an indenture (the “Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association as trustee, which governs the issuance of approximately $308.8 million principal balance secured floating rate notes (the “Notes”) and $32.4 million of preferred equity in the Issuer (the “CLO Securitization”). As of December 31, 2018 , the Notes were collateralized by interests in a pool of eleven mortgage assets having a total principal balance of approximately $289.6 million (the “Mortgage Assets”) that were originated by a wholly-owned subsidiary of the Company and approximately $51.6 million of receivables related to repayments of outstanding principal on previous mortgage assets. As of December 31, 2017, the Notes were collateralized by interests in a pool of thirteen mortgage assets having a total principal balance of approximately $341.2 million that were originated by a wholly-owned subsidiary of the Company. During the reinvestment period ending on March 15, 2019, the Company may direct the Issuer to acquire additional mortgage assets meeting applicable reinvestment criteria using the principal repayments from the Mortgage Assets, subject to the satisfaction of certain conditions, including receipt of a Rating Agency Confirmation and investor approval of the new mortgage assets. The contribution of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement between ACRC Lender LLC (the “Seller”), a wholly-owned subsidiary of the Company, and the Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants. In connection with the securitization, the Issuer and Co-Issuer offered and issued the following classes of Notes: Class A, Class A-S, Class B, Class C and Class D Notes (collectively, the “Offered Notes”) to a third party. A wholly-owned subsidiary of the Company retained approximately $35.8 million of the Notes and all of the $32.4 million of preferred equity in the Issuer, which totaled $68.2 million . The Company, as the holder of the subordinated Notes and all of the preferred equity in the Issuer, has the obligation to absorb losses of the CLO, since the Company has a first loss position in the capital structure of the CLO. After March 15, 2021, the Issuer may redeem the Offered Notes subject to paying a make whole prepayment fee of 1.0% of the then outstanding balance of the Offered Notes. In addition, once the Class A Notes, Class A-S Notes, Class B Notes and Class C Notes have been repaid in full, the Issuer has the right to redeem the Class D Notes, subject to paying a make whole prepayment fee of 1.0% on the Class D Notes. As the directing holder of the CLO Securitization, the Company has the ability to direct activities that could significantly impact the CLO Securitization’s economic performance. ACRES is designated as special servicer of the CLO Securitization and has the power to direct activities during the loan workout process on defaulted and delinquent loans, which is the activity that most significantly impacts the CLO Securitization’s economic performance. ACRES did not waive the special servicing fee, and the Company pays its overhead costs. If an unrelated third party had the right to unilaterally remove the special servicer, then the Company would not have the power to direct activities that most significantly impact the CLO Securitization’s economic performance. In addition, there were no substantive kick-out rights of any unrelated third party to remove the special servicer without cause. The Company’s subsidiaries, as directing holders, have the ability to remove the special servicer without cause. Based on these factors, the Company is determined to be the primary beneficiary of the CLO Securitization; thus, the CLO Securitization is consolidated into the Company’s consolidated financial statements. The CLO Securitization is consolidated in accordance with FASB ASC Topic 810 and is structured as a pass through entity that receives principal and interest on the underlying collateral and distributes those payments to the note holders, as applicable. The assets and other instruments held by the CLO Securitization are restricted and can only be used to fulfill the obligations of the CLO Securitization. Additionally, the obligations of the CLO Securitization do not have any recourse to the general credit of any other consolidated entities, nor to the Company as the primary beneficiary. The inclusion of the assets and liabilities of the CLO Securitization of which the Company is deemed the primary beneficiary has no economic effect on the Company. The Company’s exposure to the obligations of the CLO Securitization is generally limited to its investment in the entity. The Company is not obligated to provide, nor has it provided, any financial support for the consolidated structure. As such, the risk associated with the Company’s involvement in the CLO Securitization is limited to the carrying value of its investment in the entity. As of December 31, 2018 , the Company’s maximum risk of loss was $68.2 million , which represents the carrying value of its investment in the CLO Securitization. For the years ended December 31, 2018, 2017 and 2016 , the Company incurred interest expense related to the CLO Securitization of $10.5 million , $6.8 million and $3.2 million , respectively. Interest expense related to the CLO Securitization is included within interest expense in the Company’s consolidated statements of operations. See Note 15 included in these consolidated financial statements for a subsequent event related to the CLO Securitization. Investment in VIE On December 19, 2014, the Company and third party institutional investors formed a limited liability company, ACRC KA, which acquired $170.0 million of preferred equity in a REIT whose assets were comprised of a portfolio of 22 multifamily, student housing, medical office and self storage properties managed by its sponsor. The Company’s investment in ACRC KA was considered to be an investment in a VIE. As of December 31, 2016, the Company owned a controlling financial interest of 51.0% of the equity shares in the VIE and the third party institutional investors owned the remaining 49.0% minority financial interest. The preferred equity shares were entitled to a preferred monthly return over the term of the investment at a fixed rate of 10.95% per annum. In January 2017, the Company’s investment in ACRC KA was repaid in full. Accordingly, as of December 31, 2017, the Company’s investment was no longer outstanding. ACREM was the non-member manager of the VIE. Based on the terms of the ACRC KA LLC agreement, ACREM had the ability to direct activities that could significantly impact the VIE’s economic performance. There were no substantive kick-out rights held by the third party institutional investors to remove ACREM as the non-member manager without cause. As ACREM served as the manager of the Company, the Company had the right to receive benefits from the VIE that could potentially be significant. As such, the Company was deemed to be the primary beneficiary of the VIE and the party that was most closely associated with the VIE. Thus, the VIE was consolidated into the Company’s consolidated financial statements and the preferred equity interests owned by the third party institutional investors were reflected as a non-controlling interest held by third parties in the Company’s consolidated balance sheets. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS ACRE Capital primarily originated, sold and serviced multifamily and senior-living related loans under programs offered by government-sponsored enterprises, such as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and by government agencies, such as the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). ACRE Capital was approved as a Fannie Mae Delegated Underwriting and Servicing lender, a Freddie Mac Program Plus® Seller/Servicer, a Multifamily Accelerated Processing and Section 232 LEAN lender for HUD, and a Ginnie Mae issuer. While ACRE Capital earned little interest income from these activities because it generally only held loans for short periods, ACRE Capital received origination fees when it closed loans and sale premiums when it sold loans. ACRE Capital also retained the rights to service the loans, which were known as mortgage servicing rights (“MSRs”), and received fees for such servicing during the life of the loans, which generally lasted 10 years or more. On September 30, 2016, the Company closed the ACRE Capital Sale for a purchase price of approximately $93 million in accordance with the Agreement dated June 28, 2016. Discontinued Operations - Financial Summary The following information reconciles the net income from operations of discontinued operations, net of income taxes, that is presented separately in the consolidated statement of operations for the year ended December 31, 2016 ($ in thousands): Mortgage banking revenue: Servicing fees, net $ 11,081 Gains from mortgage banking activities 24,034 Provision for loss sharing 146 Change in fair value of mortgage servicing rights (6,457 ) Mortgage banking revenue 28,804 Expenses: Management fees to affiliate 446 Professional fees 718 Compensation and benefits 18,108 Transaction costs 797 General and administrative expenses 3,049 General and administrative expenses reimbursed to affiliate 622 Total expenses 23,740 Income from operations before income taxes 5,064 Income tax expense 843 Net income from operations of discontinued operations, net of income taxes $ 4,221 Revenue Recognition Servicing fees were earned for servicing mortgage loans, including all activities related to servicing the loans, and were recognized as services were provided over the life of the related mortgage loan. Also included in servicing fees were the net fees earned on borrower prepayment penalties and interest earned on borrowers’ escrow payments and interim cash balances, along with other ancillary fees and reduced by write-offs of MSRs for loans that were prepaid, changes in the fair value of the servicing fee payable (as defined below) and interest expense related to escrow accounts. ACRE Capital provided additional payments to certain personnel by providing them with a percentage of the servicing fee revenue that was earned by ACRE Capital, which was initially recorded as a liability when ACRE Capital committed to make a loan to a borrower (the “servicing fee payable”). Servicing fees, net are included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. Gains from mortgage banking activities included the initial fair value of MSRs, loan origination fees, gain on the sale of loans originated, interest income and fees earned on loans held for sale, changes to the fair value of derivative financial instruments attributable to the loan commitments and forward sale commitments and reduced by the expense related to the initial fair value of the servicing fee payable and the interest expense related to the Warehouse Lines of Credit (as defined below). The initial fair value of MSRs, loan origination fees, gain on the sale of loans originated, certain direct loan origination costs for loans held for sale and the expenses related to the initial fair value of the servicing fee payable were recognized when ACRE Capital committed to make a loan to a borrower. When ACRE Capital settled a sale agreement and transferred the mortgage loan to the buyer, ACRE Capital recognized a MSR asset equal to the present value of the expected net cash flows associated with the servicing of loans sold. Gains from mortgage banking activities are included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. Derivatives Non-designated Hedges Derivatives not designated as hedges were derivatives that did not meet the criteria for hedge accounting under GAAP or for which ACRE Capital had not elected to designate as hedges. Loan commitments and forward sale commitments ACRE Capital entered into loan commitments with borrowers on loan originations whereby the interest rate on the prospective loan was determined prior to funding. In general, ACRE Capital simultaneously entered into forward sale commitments with investors in order to hedge against the interest rate exposure on loan commitments. The forward sale commitment with the investor locked in an interest rate and price for the sale of the loan. The terms of the loan commitment with the borrower and the forward sale commitment with the investor were matched with the objective of hedging interest rate risk. Loan commitments and forward sale commitments were considered undesignated derivative instruments. Accordingly, such commitments, along with any related fees received from potential borrowers, were recorded at fair value, with changes in fair value recorded in earnings. For the year ended December 31, 2016, ACRE Capital entered into 49 loan commitments and 49 forward sale commitments. Income Tax The Company established a TRS, TRS Holdings, in connection with the acquisition of ACRE Capital. TRS Holdings’ income tax provision consisted of the following for the year ended December 31, 2016 ($ in thousands): Current $ (1,206 ) Deferred 2,049 Total income tax expense $ 843 Deferred income taxes reflected the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. TRS Holdings was not subject to tax in any foreign tax jurisdiction. TRS Holdings recognized interest and penalties related to unrecognized tax benefits within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations. The following table is a reconciliation of TRS Holdings’ statutory U.S. federal income tax rate to TRS Holdings’ effective tax rate for the year ended December 31, 2016: Federal statutory rate 35.0 % State income taxes 4.4 % Federal benefit of state tax deduction (1.5 )% Effective tax rate 37.9 % As of December 31, 2018 , tax years 2015 and 2016 remained subject to examination by taxing authorities. TRS Holdings did not have any unrecognized tax benefits. Intercompany Notes In connection with the acquisition of ACRE Capital, the Company partially capitalized TRS Holdings with a $44.0 million note. In October 2014, the Company entered into an $8.0 million revolving promissory note with TRS Holdings (collectively, the two intercompany notes described above are referred to as the “Intercompany Notes”). In connection with the ACRE Capital Sale, the Intercompany Notes were repaid in full with the proceeds from the sale on September 30, 2016. At the time of the closing of the ACRE Capital Sale, the outstanding principal balance of the Intercompany Notes was $51.9 million . The income statement effects of the Intercompany Notes were eliminated in consolidation for financial reporting purposes, but the interest income and expense from the Intercompany Notes affected the taxable income of the Company and TRS Holdings. Related Party Transactions The following table summarizes the related party costs incurred by the Company related to discontinued operations for the year ended December 31, 2016 ($ in thousands): Affiliate Payments Management fees (1) $ 446 General and administrative expenses (1) 622 Direct costs (1) 68 Total $ 1,136 (1) Management fees incurred are included within management fees to affiliate, general and administrative expenses incurred are included within general and administrative expenses reimbursed to affiliate and direct costs incurred are included within general and administrative expenses for the year ended December 31, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following table summarizes the Company’s quarterly financial results for each quarter for the years ended December 31, 2018 and 2017 ($ in thousands, except per share data): For the three month period ended, March 31 June 30 September 30 December 31 2018: Net interest margin $ 13,137 $ 13,636 $ 13,984 $ 14,525 Net income attributable to common stockholders $ 9,318 $ 9,303 $ 9,957 $ 10,018 Net income per common share-Basic and Diluted $ 0.33 $ 0.33 $ 0.35 $ 0.35 2017: Net interest margin $ 10,339 $ 10,411 $ 14,726 $ 10,872 Net income attributable to common stockholders $ 6,453 $ 6,713 $ 11,058 $ 6,183 Net income per common share-Basic and Diluted $ 0.23 $ 0.24 $ 0.39 $ 0.22 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2018 , except as disclosed below. On January 11, 2019, the Issuer and Co-Issuer entered into an Amended and Restated Indenture (the “Amended Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association, as trustee, which governs the approximately $504.1 million principal balance of secured floating rate notes issued by the Issuer and $52.9 million of preferred equity in the Issuer (the “2019 FL3 CLO Securitization”). The Amended Indenture amends and restates, and replaces in its entirety, the indenture for the CLO Securitization issued in March 2017, which governed the issuance of approximately $308.8 million principal balance of secured floating rate notes and $32.4 million of preferred equity in the Issuer. After giving effect to the 2019 FL3 CLO Securitization, the Company retained (through one of its wholly-owned subsidiaries) approximately $58.5 million of the non-investment grade notes and all of the $52.9 million of preferred equity in the Issuer, which notes and preferred equity were not offered to investors. The secured floating rate notes are collateralized by interests in a pool of 17 mortgage assets having an aggregate principal balance of $557.0 million . On February 6, 2019, the Company originated and fully funded a $30.0 million senior mortgage loan on a student housing property located in North Carolina. The loan has a per annum interest rate of LIBOR plus a spread of 3.15% (plus fees) and an initial term of three years. On February 14, 2019, the Company originated a $100.6 million senior mortgage loan on a mixed-use property located in Florida. At closing, the outstanding principal balance was approximately $37.0 million . The loan has a per annum interest rate of LIBOR plus 4.25% (plus fees) and an initial term of two years. On February 21, 2019 , the Company declared a cash dividend of $ 0.33 per common share for the first quarter of 2019 . The first quarter 2019 dividend is payable on April 16, 2019 to common stockholders of record as of March 29, 2019 . |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. |
Discontinued Operations | Discontinued Operations On June 28, 2016, the Company entered into a Purchase and Sale Agreement (as amended, the “Agreement”) with Barings Real Estate Advisers LLC (formerly known as Cornerstone Real Estate Advisers LLC), a Delaware limited liability company (the “Buyer”), to sell ACRE Capital Holdings LLC (“TRS Holdings”), the holding company that owned the Company’s mortgage banking subsidiary, ACRE Capital LLC (“ACRE Capital”). Under the terms and subject to the conditions set forth in the Agreement, on September 30, 2016, the Buyer purchased from the Company all of the outstanding common units of TRS Holdings (the “ACRE Capital Sale”). ACRE Capital primarily originated, sold and serviced multifamily and senior-living related loans under programs offered by government-sponsored enterprises and by government agencies. Under the terms of the Agreement, the Buyer paid approximately $93 million in cash as consideration for the ACRE Capital Sale. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-20, Presentation of Financial Statements - Discontinued Operations , defines the criteria required for a disposal transaction to qualify for reporting as a discontinued operation. The Company determined that the ACRE Capital Sale met the criteria for discontinued operations. As a result, the operating results of ACRE Capital, which formerly comprised the mortgage banking segment, are presented separately in the Company’s consolidated financial statements as discontinued operations for the year ended December 31, 2016. The operating results of discontinued operations are included in the line item “Net income from operations of discontinued operations, net of income taxes” in the consolidated statement of operations for the year ended December 31, 2016. Summarized financial information for the discontinued mortgage banking segment is shown in Note 13 included in these consolidated financial statements. |
Variable Interest Entities | Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 12 included in these consolidated financial statements for further discussion of the Company’s VIEs. |
Segment Reporting | Segment Reporting The Company previously had two reportable business segments: principal lending and mortgage banking. As a result of the ACRE Capital Sale, the operations of the mortgage banking segment have been reclassified as discontinued operations in all periods presented. The Company now conducts and manages its business as one operating segment, rather than multiple operating segments; therefore, the Company no longer provides segment reporting. See Note 13 included in these consolidated financial statements for further discussion of the sale of the mortgage banking segment. |
Cash and Cash Equivalents | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows. |
Restricted Cash | Restricted cash includes deposits required under certain Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash, loans held for investment and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the FDIC‑insured limit. The Company has exposure to credit risk on its loans held for investment. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate. |
Loans Held for Investment | Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired. Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, the Company will record an allowance to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate. Each loan classified as held for investment is evaluated for impairment on a quarterly basis. Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. For the years ended December 31, 2018, 2017 and 2016 , the Company did not recognize any impairment charges with respect to its loans held for investment. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Preferred equity investments, which are subordinate to any loans but senior to common equity, are accounted for as loans held for investment and are carried at cost, net of unamortized loan fees and origination costs, unless the loans are deemed impaired, and are included within loans held for investment in the Company’s consolidated balance sheets. The Company accretes or amortizes any discounts or premiums over the life of the related loan held for investment utilizing the effective interest method. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 4 included in these consolidated financial statements) is included within other assets and (ii) the Secured Term Loan (defined in Note 4 included in these consolidated financial statements) and debt securitizations are both included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is included as a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. |
Revenue Recognition | Revenue Recognition Interest income from loans held for investment is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income from loans held for investment over the initial loan term as a yield adjustment using the effective interest method. |
Net Interest Margin and Interest Expense | Net Interest Margin and Interest Expense Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans held for investment as compared to its use of debt leverage. The Company includes interest income from its loans held for investment and interest expense related to its Secured Funding Agreements, securitizations debt and the Secured Term Loan (individually defined in Note 4 included in these consolidated financial statements) in net interest margin. |
Income Taxes | Income Taxes The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay U.S. federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if a REIT distributes less than the sum of 85% of its ordinary income for the calendar year, 95% of its capital gain net income for the calendar year plus any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if a REIT elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense (benefit), including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitization (as defined below) to the extent it generates excess inclusion income. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS and FL3 TRS. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable U.S. federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS and FL3 TRS. The income tax provision is included in the line item income tax expense (benefit), including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2018 and 2017 , based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS and FL3 TRS recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. |
Comprehensive Income | Comprehensive Income For the years ended December 31, 2018, 2017 and 2016 , comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. |
Stock-Based Compensation | Stock‑Based Compensation The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date. |
Earnings per Share | Earnings per Share The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock and convertible debt, except when doing so would be anti‑dilutive. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) . Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company has assessed and determined that the application of this guidance does not have a material impact on the Company’s consolidated financial statements, primarily because the majority of the Company’s revenue is accounted for under FASB ASC Topic 310, Receivables , which is scoped out of this standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted after December 15, 2018, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues and clarifies that in the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company has assessed and determined that the application of this guidance does not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the FASB Emerging Issues Task Force) .The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company adopted ASU No. 2016-18 and applied the guidance retrospectively to the prior period consolidated statements of cash flows. SEC Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification , amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity and noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company plans to use the new presentation of consolidated statement of stockholders' equity beginning in 2019. The final rule became effective on November 5, 2018. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows ($ in thousands): For the years ended December 31, 2018 2017 2016 Cash and cash equivalents $ 11,089 $ 28,343 $ 47,270 Restricted cash 379 379 375 Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows $ 11,468 $ 28,722 $ 47,645 |
Reconciliation of interest income from loan held for investment | A reconciliation of the Company’s interest income from loans held for investment, excluding non-controlling interests, to the Company’s interest income from loans held for investment as included within its consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016 is as follows ($ in thousands): For the years ended December 31, 2018 2017 2016 Interest income from loans held for investment, excluding non-controlling interests $ 118,284 $ 97,506 $ 77,424 Interest income from non-controlling interest investment held by third parties — 35 4,539 Interest income from loans held for investment $ 118,284 $ 97,541 $ 81,963 |
Schedule of interest expense | For the years ended December 31, 2018, 2017 and 2016 , interest expense is comprised of the following ($ in thousands): For the years ended December 31, 2018 2017 2016 Secured funding agreements and securitizations debt $ 54,473 $ 37,602 $ 27,856 Secured term loan 8,529 13,591 9,000 Interest expense $ 63,002 $ 51,193 $ 36,856 |
LOANS HELD FOR INVESTMENT (Tabl
LOANS HELD FOR INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of loans held for investments | The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2018 and 2017 ($ in thousands): As of December 31, 2018 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,489,708 $ 1,498,530 5.2 % 7.0 % 1.7 Subordinated debt and preferred equity investments 35,165 36,213 12.7 % 14.9 % 4.3 Total loans held for investment portfolio $ 1,524,873 $ 1,534,743 5.4 % 7.1 % 1.8 As of December 31, 2017 Carrying Amount (1) Outstanding Principal (1) Weighted Average Minimum Loan Borrowing Spread (2) Weighted Average Unleveraged Effective Yield (3) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,674,169 $ 1,684,439 4.8 % 6.2 % 1.9 Subordinated debt and preferred equity investments 52,114 52,847 9.5 % 10.8 % 3.4 Total loans held for investment portfolio $ 1,726,283 $ 1,737,286 5.0 % 6.3 % 2.0 _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Minimum Loan Borrowing Spread is equal to (a) for floating rate loans, the margin above the applicable index rate (e.g., LIBOR) plus floors, if any, on such applicable index rates, and (b) for fixed rate loans, the applicable interest rate. (3) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2018 and 2017 as weighted by the outstanding principal balance of each loan. |
Schedule of current investment portfolio and Outstanding Principal | A more detailed listing of the Company’s investment portfolio based on information available as of December 31, 2018 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Multifamily FL $89.7 $89.5 L+4.75% 7.8% Sep 2019 I/O Hotel Diversified 68.0 67.4 L+3.60% 6.6% Sep 2021 I/O Office TX 67.2 66.8 L+3.60% 6.6% July 2020 I/O Hotel OR/WA 64.1 63.6 L+3.45% 6.5% May 2021 I/O Multifamily UT 63.5 63.2 L+3.25% 6.0% Dec 2020 I/O Office IL 63.2 63.1 L+3.99% 6.9% Aug 2019 I/O Office IL 61.2 60.8 L+3.75% 6.8% Dec 2020 I/O Office NJ 54.5 54.2 L+4.65% 7.7% July 2020 I/O Office IL 54.1 53.8 L+3.95% 6.8% June 2021 I/O Industrial MN 52.0 51.7 L+3.15% 6.1% Dec 2020 I/O Mixed-use CA 49.0 48.7 L+4.00% 6.9% Apr 2021 I/O Multifamily FL 45.4 45.3 L+4.75% 7.8% Sep 2019 I/O Multifamily TX 42.7 42.5 L+3.30% 6.2% Dec 2020 I/O Student Housing CA 41.8 41.5 L+3.95% 7.0% July 2020 I/O Multifamily FL 41.2 40.8 L+2.60% 5.7% Jan 2022 I/O Student Housing TX 41.0 40.7 L+4.75% 7.8% Jan 2021 I/O Hotel CA 40.0 39.7 L+4.12% 7.0% Jan 2021 I/O Multifamily SC 38.9 38.7 L+3.36% 6.3% May 2021 I/O Student Housing NC 38.7 38.7 L+4.00% 7.5% Feb 2019 I/O Hotel NY 38.6 38.6 L+4.75% 7.3% Dec 2018 (5) I/O Multifamily IL 37.0 36.6 L+3.50% 6.7% Nov 2020 I/O Hotel MI 35.2 35.2 L+4.15% 6.7% July 2019 (6) I/O Hotel MN 31.5 31.2 L+3.55% 6.4% Aug 2021 I/O Multifamily NY 30.1 30.0 L+3.20% 6.1% Dec 2020 I/O Multifamily PA 29.4 29.1 L+3.00% 6.1% Dec 2021 I/O Office CO 27.6 27.3 L+4.15% 7.1% June 2021 I/O Multifamily TX 27.5 27.4 L+3.20% 6.2% Oct 2020 I/O Multifamily CA 26.8 26.7 L+3.85% 6.8% July 2020 I/O Student Housing AL 24.1 24.0 L+4.45% 7.5% Feb 2020 I/O Student Housing TX 24.0 23.8 L+4.10% 7.1% Jan 2021 I/O Hotel IL 21.4 21.2 L+4.40% 7.5% May 2021 I/O Multifamily CA 19.8 19.6 L+3.30% 6.2% Feb 2021 I/O Office PA 19.6 19.5 L+4.70% 7.7% Mar 2020 I/O Multifamily FL 19.2 19.1 L+4.00% 6.9% Nov 2020 I/O Office FL 18.4 18.3 L+4.30% 7.4% Apr 2020 I/O Residential Condominium FL 17.5 17.4 L+8.00% 11.9% Apr 2020 I/O Office CA 17.5 17.3 L+3.40% 6.5% Nov 2021 I/O Residential CA 9.1 8.8 12.00% 14.8% Feb 2020 I/O Office NC 8.0 7.9 L+4.00% 7.1% Nov 2022 I/O Subordinated Debt and Preferred Equity Investments: Office NJ 17.0 16.4 12.00% 12.8% Jan 2026 I/O (7) Residential Condominium NY 10.8 10.6 L+14.00% 17.5% May 2021 I/O Residential Condominium HI 4.7 4.7 14.00% 19.1% Apr 2019 I/O Office CA 2.7 2.7 L+8.25% 10.9% Nov 2021 I/O Mixed-use IL 1.0 0.8 L+12.25% 15.7% Nov 2021 I/O Total/Weighted Average $1,534.7 $1,524.9 7.1% _______________________________________________________________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 10 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of December 31, 2018 or the LIBOR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2018 as weighted by the outstanding principal balance of each loan. (3) Certain loans are subject to contractual extension options that generally vary between one and two 12 -month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) As of December 31, 2018, the $38.6 million senior mortgage loan, which is collateralized by a hotel property located in New York, is in maturity default. See below in this Note 3 included in these consolidated financial statements for further discussion of this loan. (6) In June 2018, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Michigan loan to July 2019. (7) In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $17.0 million as of December 31, 2018 . The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. |
Schedule of activity in loan portfolio | For the years ended December 31, 2018 and 2017 , the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2016 $ 1,313,937 Initial funding 878,834 Origination fees and discounts, net of costs (9,323 ) Additional funding 21,455 Amortizing payments (509 ) Loan payoffs (410,789 ) Loans sold to third parties (1) (73,900 ) Origination fee accretion 6,578 Balance at December 31, 2017 $ 1,726,283 Initial funding 510,529 Origination fees and discounts, net of costs (5,816 ) Additional funding 33,693 Amortizing payments (645 ) Loan payoffs (746,120 ) Origination fee accretion 6,949 Balance at December 31, 2018 $ 1,524,873 _______________________________________________________________________________ (1) In December 2017, the Company sold a senior mortgage loan and a B-Note mortgage loan with outstanding principal of $63.9 million and $10.0 million , respectively, which were both collateralized by an office property located in Texas, to a third party. Both loans were previously classified as held for investment and were sold in order to rebalance and optimize the Company’s loan portfolio. No gain or loss was recognized on the sale. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding balances and total commitments under the Funding Agreements | As of December 31, 2018 and 2017 , the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): As of December 31, 2018 2017 Outstanding Balance Total Outstanding Balance Total Wells Fargo Facility $ 274,071 $ 500,000 $ 407,853 $ 500,000 Citibank Facility 184,003 325,000 (1) 175,651 250,000 (1) BAML Facility 36,280 125,000 78,320 125,000 CNB Facility — 50,000 — 50,000 MetLife Facility 135,145 180,000 101,131 180,000 UBS Facility — — (2) 34,000 140,000 U.S. Bank Facility 148,475 185,989 161,005 185,989 Secured Term Loan 110,000 110,000 110,000 110,000 Total $ 887,974 $ 1,475,989 $ 1,067,960 $ 1,540,989 ______________________________________________________________________________ (1) As of December 31, 2017, the Citibank Facility (as defined below) had an accordion feature that provided for an increase in the $250.0 million commitment amount with respect to approved assets, as determined by Citibank, N.A. in its sole discretion. In December 2018, the Company amended the Citibank Facility to, among other things, increase the facility’s commitment amount from $250.0 million to $325.0 million and remove the accordion feature. (2) In October 2018, the UBS Facility (as defined below) matured. The UBS Facility had been repaid in full and its term was not extended. |
Schedule of principal maturities of the Company's secured funding agreements and the 2015 Convertible Notes | At December 31, 2018 , approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousands): Wells Fargo Citibank BAML Facility CNB Facility MetLife Facility U.S. Bank Facility Secured Term Loan Total 2019 $ — $ — $ 36,280 $ — $ — $ — $ — $ 36,280 2020 274,071 — — — 135,145 148,475 110,000 667,691 2021 — 184,003 — — — — — 184,003 2022 — — — — — — — — 2023 — — — — — — — — Thereafter — — — — — — — — $ 274,071 $ 184,003 $ 36,280 $ — $ 135,145 $ 148,475 $ 110,000 $ 887,974 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of loan commitments | As of December 31, 2018 and 2017 , the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of December 31, 2018 2017 Total commitments $ 1,677,615 $ 1,847,534 Less: funded commitments (1,534,743 ) (1,737,286 ) Total unfunded commitments $ 142,872 $ 110,248 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted stock grants awarded | The following table details the restricted stock grants awarded as of December 31, 2018 : Grant Date Vesting Start Date Shares Granted May 1, 2012 July 1, 2012 35,135 June 18, 2012 July 1, 2012 7,027 July 9, 2012 October 1, 2012 25,000 June 26, 2013 July 1, 2013 22,526 November 25, 2013 November 25, 2016 30,381 January 31, 2014 August 31, 2015 48,273 February 26, 2014 February 26, 2014 12,030 February 27, 2014 August 27, 2014 22,354 June 24, 2014 June 24, 2014 17,658 June 24, 2015 July 1, 2015 25,555 April 25, 2016 July 1, 2016 10,000 June 27, 2016 July 1, 2016 24,680 April 25, 2017 April 25, 2018 81,710 June 7, 2017 July 1, 2017 18,224 October 17, 2017 January 2, 2018 7,278 December 15, 2017 January 2, 2018 8,948 May 14, 2018 July 2, 2018 31,766 June 26, 2018 July 1, 2019 67,918 December 14, 2018 March 31, 2019 57,065 Total 553,528 |
Schedule of restricted stock award activity | Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager Total Balance at December 31, 2017 21,394 90,658 112,052 Granted 31,766 124,983 156,749 Vested (30,606 ) (36,185 ) (66,791 ) Forfeited — — — Balance at December 31, 2018 22,554 179,456 202,010 |
Future anticipated vesting schedule of restricted stock awards | Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager Total 2019 18,384 62,303 80,687 2020 3,336 65,313 68,649 2021 834 38,072 38,906 2022 — 13,768 13,768 2023 — — — Total 22,554 179,456 202,010 |
Summary of activity in the Company's vested and nonvested shares of restricted stock | The following table summarizes the restricted stock compensation expense included within general and administrative expenses for ACRE and compensation and benefits for ACRE Capital (which is included within net income from operations of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations), the total fair value of shares vested and the weighted average grant date fair value of the restricted stock granted to the Company’s directors and officers, employees of the Manager and employees of ACRE Capital for the years ended December 31, 2018, 2017 and 2016 ($ in thousands): For the years ended December 31, 2018 2017 2016 Restricted Stock Grants Restricted Stock Grants Restricted Stock Grants Directors Officers and Employees of the Manager Employees Total Directors Officers and Employees of the Manager Employees Total Directors Officers and Employees of the Manager Employees Total Compensation expense (1) $ 427 $ 675 $ — $ 1,102 $ 317 $ 264 $ — $ 581 $ 355 $ 53 $ (96 ) $ 312 Total fair value of shares vested (2) 405 449 — 854 347 — — 347 342 54 383 779 Weighted average grant date fair value 427 1,759 — 2,186 338 1,254 — 1,592 412 — — 412 ______________________________________________________________________________ (1) Compensation expense for ACRE Capital employees is included within compensation and benefits expense for the year ended December 31, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. See Note 13 included in these consolidated financial statements for more information. (2) Based on the closing price of the Company’s common stock on the NYSE on each vesting date. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following information sets forth the computations of basic and diluted earnings per common share from continuing operations and discontinued operations for the years ended December 31, 2018, 2017 and 2016 ($ in thousands, except share and per share data): For the years ended December 31, 2018 2017 2016 Net income from continuing operations, less non-controlling interests $ 38,596 $ 30,407 $ 25,919 Net income from discontinued operations, including gain on sale of discontinued operations $ — $ — $ 14,417 Divided by: Basic weighted average shares of common stock outstanding: 28,529,439 28,478,237 28,461,853 Weighted average non-vested restricted stock 127,221 72,708 61,453 Diluted weighted average shares of common stock outstanding: 28,656,660 28,550,945 28,523,306 Basic earnings per common share: Continuing operations $ 1.35 $ 1.07 $ 0.91 Discontinued operations — — 0.51 Net income $ 1.35 $ 1.07 $ 1.42 Diluted earnings per common share: Continuing operations $ 1.35 $ 1.07 $ 0.91 Discontinued operations — — 0.51 Net income $ 1.35 $ 1.07 $ 1.41 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the TRS's income tax provision | The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2018, 2017 and 2016 ($ in thousands): For the years ended December 31, 2018 2017 2016 Current $ 84 $ 25 $ 21 Deferred — — — Excise tax 362 153 209 Total income tax expense, including excise tax $ 446 $ 178 $ 230 The Company established a TRS, TRS Holdings, in connection with the acquisition of ACRE Capital. TRS Holdings’ income tax provision consisted of the following for the year ended December 31, 2016 ($ in thousands): Current $ (1,206 ) Deferred 2,049 Total income tax expense $ 843 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and estimated fair value of the Company's financial instruments not carried at fair value on the consolidated balance sheet | As of December 31, 2018 and 2017 , the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of December 31, 2018 2017 Level in Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Financial assets: Loans held for investment 3 $ 1,524,873 $ 1,534,743 $ 1,726,283 $ 1,737,286 Financial liabilities: Secured funding agreements 2 $ 777,974 $ 777,974 $ 957,960 $ 957,960 Secured term loan 2 108,345 110,000 107,595 110,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 270,737 272,927 271,211 272,927 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of related-party costs incurred by the Company and amounts payable to the Manager | The following table summarizes the related party costs incurred by the Company related to continuing operations for the years ended December 31, 2018, 2017 and 2016 and amounts payable to the Company’s Manager as of December 31, 2018 and 2017 ($ in thousands): Incurred Payable For the years ended December 31, As of December 31, 2018 2017 2016 2018 2017 Affiliate Payments Management fees $ 6,268 $ 6,188 $ 5,608 $ 1,576 $ 1,549 Incentive fees 1,150 381 348 540 — General and administrative expenses 3,570 3,899 3,441 996 1,016 Direct costs 224 (1) 304 (1) 848 (2) 51 63 Total $ 11,212 $ 10,772 $ 10,245 $ 3,163 $ 2,628 ______________________________________________________________________________ (1) For the years ended December 31, 2018 and 2017 , direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations. (2) For the year ended December 31, 2016 , direct costs incurred are included within (i) general and administrative expenses of $486 thousand and (ii) interest expense of $362 thousand in the Company’s consolidated statements of operations. The following table summarizes the related party costs incurred by the Company related to discontinued operations for the year ended December 31, 2016 ($ in thousands): Affiliate Payments Management fees (1) $ 446 General and administrative expenses (1) 622 Direct costs (1) 68 Total $ 1,136 (1) Management fees incurred are included within management fees to affiliate, general and administrative expenses incurred are included within general and administrative expenses reimbursed to affiliate and direct costs incurred are included within general and administrative expenses for the year ended December 31, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
DIVIDENDS AND DISTRIBUTIONS (Ta
DIVIDENDS AND DISTRIBUTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DIVIDENDS AND DISTRIBUTIONS | |
Summary of the Company's dividends declared | The following table summarizes the Company’s dividends declared during the years ended December 31, 2018, 2017 and 2016 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount October 30, 2018 December 28, 2018 January 15, 2019 $ 0.31 $ 8,914 July 26, 2018 September 28, 2018 October 16, 2018 0.29 8,323 May 1, 2018 June 29, 2018 July 17, 2018 0.28 8,036 March 1, 2018 March 29, 2018 April 17, 2018 0.28 8,008 Total cash dividends declared for the year ended December 31, 2018 $ 1.16 $ 33,281 November 1, 2017 December 29, 2017 January 16, 2018 $ 0.27 $ 7,722 August 3, 2017 September 29, 2017 October 16, 2017 0.27 7,717 May 2, 2017 June 30, 2017 July 17, 2017 0.27 7,718 March 7, 2017 March 31, 2017 April 17, 2017 0.27 7,690 Total cash dividends declared for the year ended December 31, 2017 $ 1.08 $ 30,847 November 3, 2016 December 30, 2016 January 17, 2017 $ 0.26 $ 7,406 August 4, 2016 September 30, 2016 October 17, 2016 0.26 7,406 May 5, 2016 June 30, 2016 July 15, 2016 0.26 7,413 March 1, 2016 March 31, 2016 April 15, 2016 0.26 7,429 Total cash dividends declared for the year ended December 31, 2016 $ 1.04 $ 29,654 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following information reconciles the net income from operations of discontinued operations, net of income taxes, that is presented separately in the consolidated statement of operations for the year ended December 31, 2016 ($ in thousands): Mortgage banking revenue: Servicing fees, net $ 11,081 Gains from mortgage banking activities 24,034 Provision for loss sharing 146 Change in fair value of mortgage servicing rights (6,457 ) Mortgage banking revenue 28,804 Expenses: Management fees to affiliate 446 Professional fees 718 Compensation and benefits 18,108 Transaction costs 797 General and administrative expenses 3,049 General and administrative expenses reimbursed to affiliate 622 Total expenses 23,740 Income from operations before income taxes 5,064 Income tax expense 843 Net income from operations of discontinued operations, net of income taxes $ 4,221 |
Schedule of components of income tax expense | The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2018, 2017 and 2016 ($ in thousands): For the years ended December 31, 2018 2017 2016 Current $ 84 $ 25 $ 21 Deferred — — — Excise tax 362 153 209 Total income tax expense, including excise tax $ 446 $ 178 $ 230 The Company established a TRS, TRS Holdings, in connection with the acquisition of ACRE Capital. TRS Holdings’ income tax provision consisted of the following for the year ended December 31, 2016 ($ in thousands): Current $ (1,206 ) Deferred 2,049 Total income tax expense $ 843 |
Schedule of effective tax rate reconciliation | The following table is a reconciliation of TRS Holdings’ statutory U.S. federal income tax rate to TRS Holdings’ effective tax rate for the year ended December 31, 2016: Federal statutory rate 35.0 % State income taxes 4.4 % Federal benefit of state tax deduction (1.5 )% Effective tax rate 37.9 % |
Summary of related-party transactions | The following table summarizes the related party costs incurred by the Company related to continuing operations for the years ended December 31, 2018, 2017 and 2016 and amounts payable to the Company’s Manager as of December 31, 2018 and 2017 ($ in thousands): Incurred Payable For the years ended December 31, As of December 31, 2018 2017 2016 2018 2017 Affiliate Payments Management fees $ 6,268 $ 6,188 $ 5,608 $ 1,576 $ 1,549 Incentive fees 1,150 381 348 540 — General and administrative expenses 3,570 3,899 3,441 996 1,016 Direct costs 224 (1) 304 (1) 848 (2) 51 63 Total $ 11,212 $ 10,772 $ 10,245 $ 3,163 $ 2,628 ______________________________________________________________________________ (1) For the years ended December 31, 2018 and 2017 , direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations. (2) For the year ended December 31, 2016 , direct costs incurred are included within (i) general and administrative expenses of $486 thousand and (ii) interest expense of $362 thousand in the Company’s consolidated statements of operations. The following table summarizes the related party costs incurred by the Company related to discontinued operations for the year ended December 31, 2016 ($ in thousands): Affiliate Payments Management fees (1) $ 446 General and administrative expenses (1) 622 Direct costs (1) 68 Total $ 1,136 (1) Management fees incurred are included within management fees to affiliate, general and administrative expenses incurred are included within general and administrative expenses reimbursed to affiliate and direct costs incurred are included within general and administrative expenses for the year ended December 31, 2016 in the reconciliation of net income from operations of discontinued operations, net of income taxes. |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of the entity's quarterly financial results | The following table summarizes the Company’s quarterly financial results for each quarter for the years ended December 31, 2018 and 2017 ($ in thousands, except per share data): For the three month period ended, March 31 June 30 September 30 December 31 2018: Net interest margin $ 13,137 $ 13,636 $ 13,984 $ 14,525 Net income attributable to common stockholders $ 9,318 $ 9,303 $ 9,957 $ 10,018 Net income per common share-Basic and Diluted $ 0.33 $ 0.33 $ 0.35 $ 0.35 2017: Net interest margin $ 10,339 $ 10,411 $ 14,726 $ 10,872 Net income attributable to common stockholders $ 6,453 $ 6,713 $ 11,058 $ 6,183 Net income per common share-Basic and Diluted $ 0.23 $ 0.24 $ 0.39 $ 0.22 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Sep. 30, 2016USD ($) | Jun. 28, 2016USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of reportable segments as a result of the Acquisition | segment | 2 | ||||
Impairments of loan held for investment | $ 0 | $ 0 | $ 0 | ||
Minimum period of past due loans to be placed on non accrual | 30 days | ||||
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from divestiture of businesses | $ 93,000,000 | $ 93,000,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 11,089 | $ 28,343 | $ 47,270 | |
Restricted cash | 379 | 379 | 375 | |
Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows | $ 11,468 | $ 28,722 | $ 47,645 | $ 18,149 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Interest income from loans held for investment, excluding non-controlling interests | $ 97,506 | $ 77,424 | |
Interest income from non-controlling interest investment held by third parties | $ 0 | 35 | 4,539 |
Interest and Fee Income, Loans and Leases Held-in-portfolio | $ 118,284 | $ 97,541 | $ 81,963 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Mortgage Loans on Real Estate [Line Items] | |||
Interest expense | $ 63,002 | $ 51,193 | $ 36,856 |
Secured funding agreements and securitizations debt | |||
Mortgage Loans on Real Estate [Line Items] | |||
Interest expense | 54,473 | 37,602 | 27,856 |
Secured term loan | |||
Mortgage Loans on Real Estate [Line Items] | |||
Interest expense | $ 8,529 | $ 13,591 | $ 9,000 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax [Line Items] | |
Excise tax rate | 4.00% |
ACRC Lender UTRS LLC | |
Income Tax [Line Items] | |
Excise tax rate | 100.00% |
Percentage of ownership in subsidiaries | 100.00% |
ACRC Lender WTRS LLC | ACRE Capital | |
Income Tax [Line Items] | |
Excise tax rate | 100.00% |
Percentage of ownership in subsidiaries | 100.00% |
LOANS HELD FOR INVESTMENT - Nar
LOANS HELD FOR INVESTMENT - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)Loan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Receivables [Abstract] | |||
Number of loans originated or co-originated | Loan | 44 | ||
Number of loans repaid or sold | Loan | 76 | ||
Total Commitment | $ 1,700,000,000 | ||
Loans held for investment, Carrying Amount | 1,524,873,000 | $ 1,726,283,000 | $ 1,313,937,000 |
Amount funded | 544,200,000 | ||
Amount of repayments, excluding non-controlling interests held by third parties | $ 746,800,000 | ||
Percentage of Loans Held for Investment Having LIBOR Floors | 89.80% | ||
Weighted average floor (as a percent) | 1.38% | ||
Unleveraged effective yield dispositions, early prepayments or defaults | $ 0 | ||
Mortgage loans on real estate impairment charges recognized | $ 0 | $ 0 | $ 0 |
LOANS HELD FOR INVESTMENT - Loa
LOANS HELD FOR INVESTMENT - Loans Held for Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 1,524,873 | $ 1,726,283 |
Outstanding Principal | $ 1,534,743 | $ 1,737,286 |
Weighted Average Interest Rate | 5.40% | 5.00% |
Unleveraged effective yield (as a percent) | 7.10% | 6.30% |
Weighted Average Remaining Life | 1 year 9 months 18 days | 2 years |
Senior mortgage loans | ||
Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 1,489,708 | $ 1,674,169 |
Outstanding Principal | $ 1,498,530 | $ 1,684,439 |
Weighted Average Interest Rate | 5.20% | 4.80% |
Unleveraged effective yield (as a percent) | 7.00% | 6.20% |
Weighted Average Remaining Life | 1 year 8 months 12 days | 1 year 10 months 24 days |
Subordinated debt and preferred equity investments | ||
Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 35,165 | $ 52,114 |
Outstanding Principal | $ 36,213 | $ 52,847 |
Weighted Average Interest Rate | 12.70% | 9.50% |
Unleveraged effective yield (as a percent) | 14.90% | 10.80% |
Weighted Average Remaining Life | 4 years 3 months 18 days | 3 years 4 months 24 days |
LOANS HELD FOR INVESTMENT - Inv
LOANS HELD FOR INVESTMENT - Investment Portfolio (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)extension_option | Dec. 31, 2017USD ($) | Oct. 31, 2018USD ($) | |
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 1,534,743,000 | $ 1,737,286,000 | |
Loans held for investment | $ 1,524,873,000 | $ 1,726,283,000 | |
Unleveraged effective yield (as a percent) | 7.10% | 6.30% | |
Stated interest rate | 5.40% | 5.00% | |
Minimum | |||
Mortgage Loans on Real Estate [Line Items] | |||
Number of extension pptions | extension_option | 1 | ||
Maximum | |||
Mortgage Loans on Real Estate [Line Items] | |||
Number of extension pptions | extension_option | 2 | ||
Extension period of maturity date | 12 months | ||
Senior Mortgage Loans | FLORIDA | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 22,000,000 | ||
Loans held for investment | $ 17,500,000 | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.75%, Due September 2019, Instrument 1 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | 89,700,000 | ||
Loans held for investment | $ 89,500,000 | ||
Unleveraged effective yield (as a percent) | 7.80% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.75%, Due September 2019, Instrument 1 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.75% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.75%, Due September 2019, Instrument 2 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 45,400,000 | ||
Loans held for investment | $ 45,300,000 | ||
Unleveraged effective yield (as a percent) | 7.80% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.75%, Due September 2019, Instrument 2 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.75% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.60%, Due January 2022 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 41,200,000 | ||
Loans held for investment | $ 40,800,000 | ||
Unleveraged effective yield (as a percent) | 5.70% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.60%, Due January 2022 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 2.60% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.00%, Due November 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 19,200,000 | ||
Loans held for investment | $ 19,100,000 | ||
Unleveraged effective yield (as a percent) | 6.90% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.00%, Due November 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.00% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.30%, Due April 2020 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 18,400,000 | ||
Loans held for investment | $ 18,300,000 | ||
Unleveraged effective yield (as a percent) | 7.40% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 4.30%, Due April 2020 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.30% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 8.00%, Due April 2020 | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 17,500,000 | ||
Loans held for investment | $ 17,400,000 | ||
Unleveraged effective yield (as a percent) | 11.90% | ||
Senior Mortgage Loans | FLORIDA | LIBOR Plus 8.00%, Due April 2020 | LIBOR | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 8.00% | ||
Senior Mortgage Loans | Diversified | LIBOR Plus 3.60%, Due September 2021 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 68,000,000 | ||
Loans held for investment | $ 67,400,000 | ||
Unleveraged effective yield (as a percent) | 6.60% | ||
Senior Mortgage Loans | Diversified | LIBOR Plus 3.60%, Due September 2021 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.60% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.60%, Due July 2020 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 67,200,000 | ||
Loans held for investment | $ 66,800,000 | ||
Unleveraged effective yield (as a percent) | 6.60% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.60%, Due July 2020 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.60% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.30%, Due December 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 42,700,000 | ||
Loans held for investment | $ 42,500,000 | ||
Unleveraged effective yield (as a percent) | 6.20% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.30%, Due December 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.30% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 4.75%, Due Jan 2021 | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 41,000,000 | ||
Loans held for investment | $ 40,700,000 | ||
Unleveraged effective yield (as a percent) | 7.80% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 4.75%, Due Jan 2021 | LIBOR | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.75% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.20%, Due October 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 27,500,000 | ||
Loans held for investment | $ 27,400,000 | ||
Unleveraged effective yield (as a percent) | 6.20% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 3.20%, Due October 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.20% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 4.10%, Due January 2021 | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 24,000,000 | ||
Loans held for investment | $ 23,800,000 | ||
Unleveraged effective yield (as a percent) | 7.10% | ||
Senior Mortgage Loans | TEXAS | LIBOR Plus 4.10%, Due January 2021 | LIBOR | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.10% | ||
Senior Mortgage Loans | OREGON/WASHINGTON | LIBOR Plus 3.45%, Due May 2021 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 64,100,000 | ||
Loans held for investment | $ 63,600,000 | ||
Unleveraged effective yield (as a percent) | 6.50% | ||
Senior Mortgage Loans | OREGON/WASHINGTON | LIBOR Plus 3.45%, Due May 2021 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.45% | ||
Senior Mortgage Loans | NEW YORK | LIBOR Plus 4.75%, Due December 2018 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 38,600,000 | ||
Loans held for investment | $ 38,600,000 | ||
Unleveraged effective yield (as a percent) | 7.30% | ||
Senior Mortgage Loans | NEW YORK | LIBOR Plus 4.75%, Due December 2018 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.75% | ||
Senior Mortgage Loans | NEW YORK | LIBOR Plus 3.20%, Due December 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 30,100,000 | ||
Loans held for investment | $ 30,000,000 | ||
Unleveraged effective yield (as a percent) | 6.10% | ||
Senior Mortgage Loans | NEW YORK | LIBOR Plus 3.20%, Due December 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.20% | ||
Senior Mortgage Loans | UTAH | LIBOR Plus 3.25%, Due December 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 63,500,000 | ||
Loans held for investment | $ 63,200,000 | ||
Unleveraged effective yield (as a percent) | 6.00% | ||
Senior Mortgage Loans | UTAH | LIBOR Plus 3.25%, Due December 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.25% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.99%, Due August 2019 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 63,200,000 | ||
Loans held for investment | $ 63,100,000 | ||
Unleveraged effective yield (as a percent) | 6.90% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.99%, Due August 2019 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.99% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.75%, Due December 2020 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 61,200,000 | ||
Loans held for investment | $ 60,800,000 | ||
Unleveraged effective yield (as a percent) | 6.80% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.75%, Due December 2020 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.75% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.95%, Due June 2021 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 54,100,000 | ||
Loans held for investment | $ 53,800,000 | ||
Unleveraged effective yield (as a percent) | 6.80% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.95%, Due June 2021 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.95% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.50%, Due November 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 37,000,000 | ||
Loans held for investment | $ 36,600,000 | ||
Unleveraged effective yield (as a percent) | 6.70% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.50%, Due November 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.50% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 4.40%, Due May 2021 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 21,400,000 | ||
Loans held for investment | $ 21,200,000 | ||
Unleveraged effective yield (as a percent) | 7.50% | ||
Senior Mortgage Loans | ILLINOIS | LIBOR Plus 4.40%, Due May 2021 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.40% | ||
Senior Mortgage Loans | CALIFORNIA | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 9,100,000 | ||
Loans held for investment | $ 8,800,000 | ||
Unleveraged effective yield (as a percent) | 14.80% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 12.00% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 4.00%, Due April 2021 | Mixed-use | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 49,000,000 | ||
Loans held for investment | $ 48,700,000 | ||
Unleveraged effective yield (as a percent) | 6.90% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 4.00%, Due April 2021 | LIBOR | Mixed-use | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.00% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.95%, Due July 2020 | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 41,800,000 | ||
Loans held for investment | $ 41,500,000 | ||
Unleveraged effective yield (as a percent) | 7.00% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.95%, Due July 2020 | LIBOR | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.95% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 4.12%, Due January 2021 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 40,000,000 | ||
Loans held for investment | $ 39,700,000 | ||
Unleveraged effective yield (as a percent) | 7.00% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 4.12%, Due January 2021 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.12% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.85%, Due July 2020 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 26,800,000 | ||
Loans held for investment | $ 26,700,000 | ||
Unleveraged effective yield (as a percent) | 6.80% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.85%, Due July 2020 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.85% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.30%, Due February 2021 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 19,800,000 | ||
Loans held for investment | $ 19,600,000 | ||
Unleveraged effective yield (as a percent) | 6.20% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.30%, Due February 2021 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.30% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.40%, Due November 2021 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 17,500,000 | ||
Loans held for investment | $ 17,300,000 | ||
Unleveraged effective yield (as a percent) | 6.50% | ||
Senior Mortgage Loans | CALIFORNIA | LIBOR Plus 3.40%, Due November 2021 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.40% | ||
Senior Mortgage Loans | SOUTH CAROLINA | LIBOR Plus 3.36%, Due May 2021 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 38,900,000 | ||
Loans held for investment | $ 38,700,000 | ||
Unleveraged effective yield (as a percent) | 6.30% | ||
Senior Mortgage Loans | SOUTH CAROLINA | LIBOR Plus 3.36%, Due May 2021 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.36% | ||
Senior Mortgage Loans | COLORADO | LIBOR Plus 4.15%, Due June 2021 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 27,600,000 | ||
Loans held for investment | $ 27,300,000 | ||
Unleveraged effective yield (as a percent) | 7.10% | ||
Senior Mortgage Loans | COLORADO | LIBOR Plus 4.15%, Due June 2021 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.15% | ||
Senior Mortgage Loans | MINNESOTA | LIBOR Plus 3.15%, Due December 2020 | Industrial | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 52,000,000 | ||
Loans held for investment | $ 51,700,000 | ||
Unleveraged effective yield (as a percent) | 6.10% | ||
Senior Mortgage Loans | MINNESOTA | LIBOR Plus 3.15%, Due December 2020 | LIBOR | Industrial | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.15% | ||
Senior Mortgage Loans | MINNESOTA | LIBOR Plus 3.55%, Due August 2021 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 31,500,000 | ||
Loans held for investment | $ 31,200,000 | ||
Unleveraged effective yield (as a percent) | 6.40% | ||
Senior Mortgage Loans | MINNESOTA | LIBOR Plus 3.55%, Due August 2021 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.55% | ||
Senior Mortgage Loans | NEW JERSEY | LIBOR Plus 4.65%, Due July 2020 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 54,500,000 | ||
Loans held for investment | $ 54,200,000 | ||
Unleveraged effective yield (as a percent) | 7.70% | ||
Senior Mortgage Loans | NEW JERSEY | LIBOR Plus 4.65%, Due July 2020 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.65% | ||
Senior Mortgage Loans | NORTH CAROLINA | LIBOR Plus 4.00%, Due February 2019 | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 38,700,000 | ||
Loans held for investment | $ 38,700,000 | ||
Unleveraged effective yield (as a percent) | 7.50% | ||
Senior Mortgage Loans | NORTH CAROLINA | LIBOR Plus 4.00%, Due February 2019 | LIBOR | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.00% | ||
Senior Mortgage Loans | NORTH CAROLINA | LIBOR Plus 4.00%, Due November 2022 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 8,000,000 | ||
Loans held for investment | $ 7,900,000 | ||
Unleveraged effective yield (as a percent) | 7.10% | ||
Senior Mortgage Loans | NORTH CAROLINA | LIBOR Plus 4.00%, Due November 2022 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.00% | ||
Senior Mortgage Loans | MICHIGAN | LIBOR Plus 4.15%, Due July 2019 | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 35,200,000 | ||
Loans held for investment | $ 35,200,000 | ||
Unleveraged effective yield (as a percent) | 6.70% | ||
Amount of delinquent loans | $ 38,600,000 | ||
Senior Mortgage Loans | MICHIGAN | LIBOR Plus 4.15%, Due July 2019 | LIBOR | Hotel | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.15% | ||
Senior Mortgage Loans | ALABAMA | LIBOR Plus 4.55%, Due February 2020 | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 24,100,000 | ||
Loans held for investment | $ 24,000,000 | ||
Unleveraged effective yield (as a percent) | 7.50% | ||
Senior Mortgage Loans | ALABAMA | LIBOR Plus 4.55%, Due February 2020 | LIBOR | Student Housing | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.45% | ||
Senior Mortgage Loans | PENNSYLVANIA | LIBOR Plus 3.00%, Due December 2021 | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 29,400,000 | ||
Loans held for investment | $ 29,100,000 | ||
Unleveraged effective yield (as a percent) | 6.10% | ||
Senior Mortgage Loans | PENNSYLVANIA | LIBOR Plus 3.00%, Due December 2021 | LIBOR | Multifamily | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 3.00% | ||
Senior Mortgage Loans | PENNSYLVANIA | LIBOR Plus 4.70%, Due March 2020 | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 19,600,000 | ||
Loans held for investment | $ 19,500,000 | ||
Unleveraged effective yield (as a percent) | 7.70% | ||
Senior Mortgage Loans | PENNSYLVANIA | LIBOR Plus 4.70%, Due March 2020 | LIBOR | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable interest rate | 4.70% | ||
Subordinated debt and preferred equity investments | NEW YORK | LIBOR Plus 14.00%, Due May 2021 | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 10,800,000 | ||
Loans held for investment | $ 10,600,000 | ||
Unleveraged effective yield (as a percent) | 17.50% | ||
Subordinated debt and preferred equity investments | NEW YORK | LIBOR Plus 14.00%, Due May 2021 | LIBOR | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Stated interest rate | 14.00% | ||
Subordinated debt and preferred equity investments | ILLINOIS | LIBOR Plus 12.25%, Due November 2021 | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 1,000,000 | ||
Loans held for investment | $ 800,000 | ||
Unleveraged effective yield (as a percent) | 15.70% | ||
Subordinated debt and preferred equity investments | ILLINOIS | LIBOR Plus 12.25%, Due November 2021 | LIBOR | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Stated interest rate | 12.25% | ||
Subordinated debt and preferred equity investments | CALIFORNIA | LIBOR Plus 8.25%, Due November 2021 | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 2,700,000 | ||
Loans held for investment | $ 2,700,000 | ||
Unleveraged effective yield (as a percent) | 10.90% | ||
Subordinated debt and preferred equity investments | CALIFORNIA | LIBOR Plus 8.25%, Due November 2021 | LIBOR | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Stated interest rate | 8.25% | ||
Subordinated debt and preferred equity investments | NEW JERSEY | Office | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 17,000,000 | ||
Loans held for investment | $ 16,400,000 | ||
Basis spread on variable interest rate | 12.00% | ||
Unleveraged effective yield (as a percent) | 12.80% | ||
Subordinated debt and preferred equity investments | HAWAII | Residential | |||
Mortgage Loans on Real Estate [Line Items] | |||
Outstanding Principal | $ 4,700,000 | ||
Loans held for investment | $ 4,700,000 | ||
Basis spread on variable interest rate | 14.00% | ||
Unleveraged effective yield (as a percent) | 19.10% |
LOANS HELD FOR INVESTMENT - Por
LOANS HELD FOR INVESTMENT - Portfolio Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in the activity of loan portfolio | |||
Balance at the beginning of the period | $ 1,726,283 | $ 1,313,937 | |
Initial funding | 510,529 | 878,834 | |
Receipt of origination fees, net of costs | (5,816) | (9,323) | |
Additional funding | 33,693 | 21,455 | |
Amortizing payments | (645) | (509) | |
Loan payoffs | (746,120) | (410,789) | |
Loans sold to third parties | (73,900) | ||
Origination fee accretion | 6,949 | 6,578 | $ 5,924 |
Balance at the end of the period | 1,524,873 | $ 1,726,283 | $ 1,313,937 |
Senior mortgage loans | |||
Change in the activity of loan portfolio | |||
Loans sold to third parties | (63,900) | ||
B Note Mortgage Loan | |||
Change in the activity of loan portfolio | |||
Loans sold to third parties | $ (10,000) |
DEBT - Schedule of outstanding
DEBT - Schedule of outstanding balances and total commitments under Financing Agreements (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | May 30, 2017 |
Debt Instrument [Line Items] | ||||
Outstanding Balance | $ 887,974,000 | $ 1,067,960,000 | ||
Total Commitment | 1,475,989,000 | 1,540,989,000 | ||
Secured term loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 110,000,000 | 110,000,000 | ||
Total Commitment | 110,000,000 | 110,000,000 | ||
Wells Fargo Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 274,071,000 | 407,853,000 | ||
Total Commitment | 500,000,000 | 500,000,000 | $ 500,000,000 | |
Wells Fargo Facility | Secured revolving funding facility | ||||
Debt Instrument [Line Items] | ||||
Total Commitment | 0.02 | |||
Citibank Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 184,003,000 | 175,651,000 | ||
Total Commitment | 325,000,000 | 250,000,000 | ||
Citibank Facility | Secured revolving funding facility | ||||
Debt Instrument [Line Items] | ||||
Total Commitment | 325,000,000 | $ 250,000,000 | 250,000,000 | |
BAML Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 36,280,000 | 78,320,000 | ||
Total Commitment | 125,000,000 | 125,000,000 | ||
City National Bank Facility | CNB Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 0 | 0 | ||
Total Commitment | 50,000,000 | 50,000,000 | ||
MetLife Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 135,145,000 | 101,131,000 | ||
Total Commitment | 180,000,000 | 180,000,000 | ||
April 2014 UBS Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 0 | 34,000,000 | ||
Total Commitment | 0 | 140,000,000 | ||
U.S. Bank Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | 148,475,000 | 161,005,000 | ||
Total Commitment | $ 185,989,000 | $ 185,989,000 |
DEBT - Narrative Disclosures (D
DEBT - Narrative Disclosures (Details) | Sep. 09, 2016USD ($) | Dec. 14, 2015 | Dec. 09, 2015USD ($) | Dec. 31, 2018USD ($)extension | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018USD ($)extension | Dec. 31, 2017USD ($) | Aug. 03, 2017 | Sep. 30, 2018USD ($) | Dec. 08, 2017 | Dec. 31, 2018USD ($)extension | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2017USD ($) | May 30, 2017USD ($) |
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 887,974,000 | $ 1,067,960,000 | $ 1,067,960,000 | $ 887,974,000 | $ 1,067,960,000 | $ 887,974,000 | $ 1,067,960,000 | |||||||||||||
Total Commitment | 1,475,989,000 | 1,540,989,000 | 1,540,989,000 | 1,475,989,000 | 1,540,989,000 | 1,475,989,000 | 1,540,989,000 | |||||||||||||
Early extinguishment of debt costs | 0 | (768,000) | $ 0 | |||||||||||||||||
Initial amount withdrawn from the maximum borrowing capacity | 0 | 0 | $ 80,000,000 | |||||||||||||||||
Amount of debt discount on the initial draw down amount | $ 2,600,000 | |||||||||||||||||||
Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Secured term loan | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | 110,000,000 | 110,000,000 | 110,000,000 | 110,000,000 | 110,000,000 | $ 110,000,000 | 110,000,000 | |||||||||||||
Total Commitment | $ 110,000,000 | $ 110,000,000 | 110,000,000 | $ 110,000,000 | 110,000,000 | $ 110,000,000 | $ 110,000,000 | |||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Non-utilization threshold percentage (as a percent) | 1.00% | 1.00% | 1.00% | |||||||||||||||||
Non-utilization/commitment fee | $ 560,000 | |||||||||||||||||||
Aggregate principal amount | $ 110,000,000 | $ 110,000,000 | $ 110,000,000 | |||||||||||||||||
Initial amount withdrawn from the maximum borrowing capacity | $ 80,000,000 | $ 75,000,000 | ||||||||||||||||||
Secured term loan | LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 7.20% | 8.70% | 5.00% | 6.00% | ||||||||||||||||
Repayments of Debt | 45,000,000 | |||||||||||||||||||
Early extinguishment of debt costs | $ 768,000 | |||||||||||||||||||
LIBOR floor (as a percent) | 1.00% | 1.00% | 1.00% | |||||||||||||||||
Percentage of accretion of Original issue discount and associated costs | 7.60% | 8.50% | 7.60% | 7.60% | 8.50% | |||||||||||||||
Secured term loan | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
Percentage of tangible net worth required to be maintained (as a percent) | 65.00% | |||||||||||||||||||
Asset coverage ratio | 110.00% | |||||||||||||||||||
Unencumbered asset ratio | 120.00% | |||||||||||||||||||
Secured term loan | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
U.S. Bank Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 148,475,000 | $ 161,005,000 | 161,005,000 | $ 148,475,000 | 161,005,000 | $ 148,475,000 | $ 161,005,000 | |||||||||||||
Total Commitment | $ 185,989,000 | 185,989,000 | 185,989,000 | $ 185,989,000 | 185,989,000 | $ 185,989,000 | 185,989,000 | |||||||||||||
U.S. Bank Facility | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 186,000,000 | |||||||||||||||||||
U.S. Bank Facility | Revolving master repurchase facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | 2 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
U.S. Bank Facility | Revolving master repurchase facility | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 0.00% | |||||||||||||||||||
Non-utilization/commitment fee | 83,000 | $ 77,000 | ||||||||||||||||||
U.S. Bank Facility | Revolving master repurchase facility | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.25% | |||||||||||||||||||
Wells Fargo Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 274,071,000 | 407,853,000 | 407,853,000 | $ 274,071,000 | 407,853,000 | $ 274,071,000 | 407,853,000 | |||||||||||||
Total Commitment | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | $ 500,000,000 | ||||||||||||
Wells Fargo Facility | Secured revolving funding facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 0.02 | $ 0.02 | $ 0.02 | |||||||||||||||||
Number of extension periods available for maturity date | extension | 3 | 3 | 3 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Non-utilization threshold percentage (as a percent) | 75.00% | 75.00% | 75.00% | |||||||||||||||||
Non-utilization/commitment fee | $ 149,000 | 362,000 | 340,000 | |||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | |||||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Debt Instrument, Covenant Specified Amount for Computing Tangible Net Worth to be Maintained | $ 135,500,000 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 1.75% | 1.50% | ||||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.35% | 2.25% | ||||||||||||||||||
Citibank Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 184,003,000 | 175,651,000 | 175,651,000 | $ 184,003,000 | 175,651,000 | $ 184,003,000 | 175,651,000 | |||||||||||||
Total Commitment | 325,000,000 | 250,000,000 | 250,000,000 | 325,000,000 | 250,000,000 | 325,000,000 | 250,000,000 | |||||||||||||
Citibank Facility | Secured revolving funding facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 325,000,000 | 250,000,000 | 250,000,000 | $ 325,000,000 | 250,000,000 | $ 250,000,000 | $ 325,000,000 | 250,000,000 | ||||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | 2 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Non-utilization/commitment fee | $ 143,000 | 165,000 | 93,000 | |||||||||||||||||
Liquidity to be maintained as a percentage of recourse indebtedness | 5.00% | |||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | |||||||||||||||||||
Citibank Facility | Secured revolving funding facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Amount of liquidity to be maintained | $ 5,000,000 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
Citibank Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 400.00% | 1.50% | 2.25% | |||||||||||||||||
Citibank Facility | Secured revolving funding facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Amount of liquidity to be maintained | $ 10,000,000 | |||||||||||||||||||
Citibank Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 100.00% | 2.25% | 2.50% | |||||||||||||||||
BAML Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 36,280,000 | 78,320,000 | 78,320,000 | $ 36,280,000 | 78,320,000 | 36,280,000 | 78,320,000 | |||||||||||||
Total Commitment | 125,000,000 | 125,000,000 | 125,000,000 | 125,000,000 | 125,000,000 | $ 125,000,000 | 125,000,000 | |||||||||||||
Period immediately preceding on the last date of the applicable reporting period for maintaining fixed charge coverage ratio | 12 months | |||||||||||||||||||
BAML Facility | Secured revolving funding facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.125% | |||||||||||||||||||
BAML Facility | Secured funding facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 | |||||||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Facility used on average (as a percent) | 50.00% | |||||||||||||||||||
Non-utilization/commitment fee | $ 21,000 | 52,000 | 52,000 | |||||||||||||||||
Term of debt | 2 years | |||||||||||||||||||
BAML Facility | Secured funding facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
BAML Facility | Secured funding facility | Minimum | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.25% | |||||||||||||||||||
BAML Facility | Secured funding facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
BAML Facility | Secured funding facility | Maximum | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.75% | |||||||||||||||||||
City National Bank Facility | CNB Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 0 | 0 | 0 | $ 0 | 0 | $ 0 | 0 | |||||||||||||
Total Commitment | $ 50,000,000 | 50,000,000 | 50,000,000 | $ 50,000,000 | 50,000,000 | $ 50,000,000 | 50,000,000 | |||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Non-utilization/commitment fee | $ 166,000 | 184,000 | $ 122,000 | |||||||||||||||||
Period immediately preceding on the last date of the applicable reporting period for maintaining fixed charge coverage ratio | 12 months | |||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | |||||||||||||||||||
City National Bank Facility | CNB Facility | One, two, three or six month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 3.00% | |||||||||||||||||||
City National Bank Facility | CNB Facility | Federal funds rate | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 0.50% | |||||||||||||||||||
City National Bank Facility | CNB Facility | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||||||||
City National Bank Facility | CNB Facility | Base rate | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 1.25% | |||||||||||||||||||
City National Bank Facility | CNB Facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate (as a percent) | 3.00% | 3.00% | 3.00% | |||||||||||||||||
Facility used on average (as a percent) | 75.00% | |||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
City National Bank Facility | CNB Facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
MetLife Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 135,145,000 | 101,131,000 | 101,131,000 | $ 135,145,000 | 101,131,000 | $ 135,145,000 | 101,131,000 | |||||||||||||
Total Commitment | $ 180,000,000 | 180,000,000 | 180,000,000 | $ 180,000,000 | $ 180,000,000 | $ 180,000,000 | 180,000,000 | |||||||||||||
MetLife Facility | Secured revolving funding facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Non-utilization threshold percentage (as a percent) | 65.00% | 65.00% | 65.00% | |||||||||||||||||
Non-utilization/commitment fee | $ 7,000 | |||||||||||||||||||
MetLife Facility | Revolving master repurchase facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 180,000,000 | $ 180,000,000 | $ 180,000,000 | |||||||||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | 2 | |||||||||||||||||
Extension period of maturity date | 12 months | |||||||||||||||||||
Period immediately preceding on the last date of the applicable reporting period for maintaining fixed charge coverage ratio | 12 months | |||||||||||||||||||
MetLife Facility | Revolving master repurchase facility | 30 day LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.30% | 2.35% | ||||||||||||||||||
MetLife Facility | Revolving master repurchase facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
MetLife Facility | Revolving master repurchase facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
April 2014 UBS Facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Outstanding Balance | $ 0 | 34,000,000 | 34,000,000 | $ 0 | $ 34,000,000 | $ 0 | 34,000,000 | |||||||||||||
Total Commitment | 0 | $ 140,000,000 | $ 140,000,000 | 0 | $ 140,000,000 | 0 | $ 140,000,000 | |||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Total Commitment | $ 140,000,000 | $ 140,000,000 | $ 140,000,000 | |||||||||||||||||
Period immediately preceding on the last date of the applicable reporting period for maintaining fixed charge coverage ratio | 12 months | |||||||||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | Minimum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument, Covenant Ratio of EBITDA to Fixed Charges | 1.25 | |||||||||||||||||||
Percentage of tangible net worth as of September 30, 2013 used for computing the tangible net worth to be maintained | 80.00% | |||||||||||||||||||
Debt Instrument, Covenant Percentage of Net Proceeds Raised in Future Equity Issuances Used for Computing Tangible Net Worth to be Maintained | 80.00% | |||||||||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | Maximum | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument Covenant Ratio of Debt to Tangible Net Worth | 4 | |||||||||||||||||||
Ratio of recourse debt to tangible net worth | 3 | |||||||||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | Assets subject to an advance for one year or less | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 1.88% | |||||||||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | Assets subject to an advance in excess of one year but less than two years | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.08% | |||||||||||||||||||
April 2014 UBS Facility | Revolving master repurchase facility | Assets subject to an advance for greater than two years | One-month LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Interest rate margin (as a percent) | 2.28% | |||||||||||||||||||
Forecast | Secured term loan | LIBOR | ||||||||||||||||||||
Funding agreements | ||||||||||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 0.75% | 0.375% | 0.125% |
DEBT - Maturity Schedule (Detai
DEBT - Maturity Schedule (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | $ 36,280 |
2,020 | 667,691 |
2,021 | 184,003 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 887,974 |
Secured term loan | |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | 0 |
2,020 | 110,000 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 110,000 |
Wells Fargo Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,020 | 274,071 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 274,071 |
Citibank Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | 0 |
2,021 | 184,003 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 184,003 |
BAML Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | 36,280 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 36,280 |
CNB Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
MetLife Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,020 | 135,145 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 135,145 |
U.S. Bank Facility | |
Principal maturities of secured funding agreements and unsecured debt | |
2,019 | 0 |
2,020 | 148,475 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | $ 148,475 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Total commitments | $ 1,677,615 | $ 1,847,534 |
Less: funded commitments | (1,534,743) | (1,737,286) |
Total unfunded commitments | $ 142,872 | $ 110,248 |
EQUITY - Stock Buyback Program
EQUITY - Stock Buyback Program and Public Offering (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
May 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 29, 2016 | |
Stockholders' Equity Note [Abstract] | |||||
Stock repurchase agreement, authorized amount | $ 20,000,000 | $ 30,000,000 | |||
Period in force | 1 year | ||||
Stock repurchased and retired during period, shares | 0 | 0 | (129,916) | ||
Stock repurchased and retired during period, value | $ (1,436,000) | ||||
Average price per share | $ 11.06 | ||||
Subscription agreement shares issued | 0 | 0 | 0 |
EQUITY - Disclosures (Details)
EQUITY - Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,390,000 | |||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 112,052 | |||
Granted (in shares) | 156,749 | |||
Vested (in shares) | (66,791) | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 202,010 | 112,052 | ||
Activity in the Company's vested and nonvested shares of restricted stock | ||||
Compensation expense included in compensation and benefits | $ 1,102 | $ 581 | $ 312 | |
Total fair value of shares vested | 854 | 347 | 779 | |
Weighted average grant date fair value | 2,186 | 1,592 | 412 | |
Total compensation cost related to non-vested awards that have not yet been recognized | $ 2,300 | $ 1,200 | $ 180 | |
Weighted-average period over which non-vested awards are expected to be recognized | 2 years 1 month 6 days | 1 year 11 months 11 days | 1 year 7 days | |
Directors | ||||
Activity in the Company's vested and nonvested shares of restricted stock | ||||
Compensation expense included in compensation and benefits | $ 427 | $ 317 | $ 355 | |
Total fair value of shares vested | 405 | 347 | 342 | |
Weighted average grant date fair value | 427 | 338 | 412 | |
Officer | ||||
Activity in the Company's vested and nonvested shares of restricted stock | ||||
Compensation expense included in compensation and benefits | 675 | 264 | 53 | |
Total fair value of shares vested | 449 | 0 | 54 | |
Weighted average grant date fair value | 1,759 | 1,254 | 0 | |
Employees | ||||
Activity in the Company's vested and nonvested shares of restricted stock | ||||
Compensation expense included in compensation and benefits | 0 | 0 | (96) | |
Total fair value of shares vested | 0 | 0 | 383 | |
Weighted average grant date fair value | $ 0 | $ 0 | 0 | |
ACRC KA Investor LLC | ||||
Non-controlling interest | ||||
Total equity of VIE | 21,700 | |||
VIE equity owned by the company | 11,100 | |||
Amount allocated to non-controlling interest | $ 10,600 | |||
Restricted stock | ||||
Equity Incentive Plan | ||||
Shares granted | 553,528 | |||
Future Anticipated Vesting Schedule | ||||
2019 (in shares) | 80,687 | |||
2020 (in shares) | 68,649 | |||
2021 (in shares) | 38,906 | |||
2022 (in shares) | 13,768 | |||
2023 (in shares) | 0 | |||
Total (in shares) | 202,010 | |||
Restricted stock | Maximum | ||||
Equity Incentive Plan | ||||
Award vesting period | 4 years | |||
Restricted stock | Minimum | ||||
Equity Incentive Plan | ||||
Award vesting period | 1 year | |||
Restricted stock | Directors | ||||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 21,394 | |||
Granted (in shares) | 31,766 | |||
Vested (in shares) | (30,606) | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 22,554 | 21,394 | ||
Future Anticipated Vesting Schedule | ||||
2019 (in shares) | 18,384 | |||
2020 (in shares) | 3,336 | |||
2021 (in shares) | 834 | |||
2022 (in shares) | 0 | |||
2023 (in shares) | 0 | |||
Total (in shares) | 22,554 | |||
Restricted stock | Officer | ||||
Restricted stock activity | ||||
Balance at the beginning of the period (in shares) | 90,658 | |||
Granted (in shares) | 124,983 | |||
Vested (in shares) | (36,185) | |||
Forfeited (in shares) | 0 | |||
Balance at the end of the period (in shares) | 179,456 | 90,658 | ||
Future Anticipated Vesting Schedule | ||||
2019 (in shares) | 62,303 | |||
2020 (in shares) | 65,313 | |||
2021 (in shares) | 38,072 | |||
2022 (in shares) | 13,768 | |||
2023 (in shares) | 0 | |||
Total (in shares) | 179,456 | |||
Restricted stock | May 1, 2012 | ||||
Equity Incentive Plan | ||||
Shares granted | 35,135 | |||
Restricted stock | June 18, 2012 | ||||
Equity Incentive Plan | ||||
Shares granted | 7,027 | |||
Restricted stock | July 9, 2012 | ||||
Equity Incentive Plan | ||||
Shares granted | 25,000 | |||
Restricted stock | June 26, 2013 | ||||
Equity Incentive Plan | ||||
Shares granted | 22,526 | |||
Restricted stock | November 25, 2013 | ||||
Equity Incentive Plan | ||||
Shares granted | 30,381 | |||
Restricted stock | January 31, 2014 | ||||
Equity Incentive Plan | ||||
Shares granted | 48,273 | |||
Restricted stock | February 26, 2014 | ||||
Equity Incentive Plan | ||||
Shares granted | 12,030 | |||
Restricted stock | February 27, 2014 | ||||
Equity Incentive Plan | ||||
Shares granted | 22,354 | |||
Restricted stock | June 24, 2014 | ||||
Equity Incentive Plan | ||||
Shares granted | 17,658 | |||
Restricted stock | June 24, 2015 | ||||
Equity Incentive Plan | ||||
Shares granted | 25,555 | |||
Restricted stock | April 25, 2016 | ||||
Equity Incentive Plan | ||||
Shares granted | 10,000 | |||
Restricted stock | June 27, 2016 | ||||
Equity Incentive Plan | ||||
Shares granted | 24,680 | |||
Restricted stock | April 25, 2017 | ||||
Equity Incentive Plan | ||||
Shares granted | 81,710 | |||
Restricted stock | June 7, 2017 | ||||
Equity Incentive Plan | ||||
Shares granted | 18,224 | |||
Restricted stock | October 17, 2017 | ||||
Equity Incentive Plan | ||||
Shares granted | 7,278 | |||
Restricted stock | December 15, 2017 | ||||
Equity Incentive Plan | ||||
Shares granted | 8,948 | |||
Restricted stock | May 14, 2018 | ||||
Equity Incentive Plan | ||||
Shares granted | 31,766 | |||
Restricted stock | June 26, 2018 | ||||
Equity Incentive Plan | ||||
Shares granted | 67,918 | |||
Restricted stock | December 14, 2018 | ||||
Equity Incentive Plan | ||||
Shares granted | 57,065 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net income from continuing operations, less non-controlling interests | $ 38,596 | $ 30,407 | $ 25,919 |
Net income from discontinued operations, including gain on sale of discontinued operations | $ 0 | $ 0 | $ 14,417 |
Divided by: | |||
Basic weighted average shares of common stock outstanding (shares) | 28,529,439 | 28,478,237 | 28,461,853 |
Non-vested restricted stock (shares) | 127,221 | 72,708 | 61,453 |
Diluted weighted average shares of common stock outstanding: (shares) | 28,656,660 | 28,550,945 | 28,523,306 |
Basic earnings per common share: | |||
Continuing operations (in dollars per share) | $ 1.35 | $ 1.07 | $ 0.91 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.51 |
Net income (in dollars per share) | 1.35 | 1.07 | 1.42 |
Diluted earnings per common share: | |||
Continuing operations (in dollars per share) | 1.35 | 1.07 | 0.91 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.51 |
Net income (in dollars per share) | $ 1.35 | $ 1.07 | $ 1.41 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of the company's income tax provision | |||
Deferred | $ 0 | $ 0 | $ 2,049 |
Excise tax | 153 | 209 | |
Total income tax expense (benefit) | $ 446 | 178 | 230 |
Excise tax rate | 4.00% | ||
ACRE Capital Sale | |||
Components of the company's income tax provision | |||
Current | $ 84 | 25 | 21 |
Deferred | 0 | 0 | 0 |
Excise tax | 362 | 153 | 209 |
Total income tax expense (benefit) | $ 446 | $ 178 | $ 230 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | $ 1,524,873 | $ 1,726,283 |
Carrying Value | ||
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | 1,524,873 | 1,726,283 |
Financial Liabilities: | ||
Secured funding agreements | 777,974 | 957,960 |
Secured term loan | 108,345 | 107,595 |
Debt issued by consolidated VIE | 270,737 | 271,211 |
Fair Value | Level II | ||
Financial Liabilities: | ||
Secured funding agreements | 777,974 | 957,960 |
Secured term loan | 110,000 | 110,000 |
Fair Value | Level III | ||
Carrying value and estimated fair value of the financial assets on the consolidated balance sheet | ||
Loans held for investment | 1,534,743 | 1,737,286 |
Financial Liabilities: | ||
Debt issued by consolidated VIE | $ 272,927 | $ 272,927 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2018 | Aug. 31, 2018 | May 31, 2018 | |
Related Party Transaction [Line Items] | ||||||
Related Party Transactions, Management Fee Renewal Term | 1 year | |||||
Related Party Transactions, Management Fee Look Back Period | 24 months | |||||
Outstanding Principal | $ 1,534,743,000 | $ 1,737,286,000 | ||||
Mortgage Loans on Real Estate, Commercial and Consumer, Net | $ 1,524,873,000 | 1,726,283,000 | ||||
Credit support fee, percent | 1.50% | |||||
Credit surrport fee, Average outstanding amount threshold | $ 75,000,000 | |||||
Ares Management | ||||||
Related Party Transaction [Line Items] | ||||||
Credit support fee incurred | 362,000 | |||||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Base management fees as a percentage of stockholders' equity per annum | 1.50% | |||||
Incentive fee payable | $ 0 | |||||
Percentage multiplied to arrive at first value affecting calculation of incentive fees | 20.00% | |||||
Previous period for which core earnings are considered to arrive at first value affecting calculation of incentive fees | 12 months | |||||
Previous period for product of weighted average price per share and weighted average number of shares of common stock and other shares | 12 months | |||||
Percentage multiplied to arrive at difference of first value affecting calculation of incentive fees | 8.00% | |||||
Period whose fiscal quarters are considered to arrive at first value affecting calculation of incentive fees | 12 months | |||||
Minimum cumulative core earnings | $ 0 | |||||
Revenue from Related Parties | 1,200,000 | $ 381,000 | $ 348,000 | |||
ILLINOIS | Mezzanine Loan | Mixed-use | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 25,000,000 | |||||
Mortgage Loans on Real Estate, Commercial and Consumer, Net | 974,000 | |||||
ILLINOIS | Mezzanine Loan | Mixed-use | Ares Management | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 15,300,000 | |||||
ILLINOIS | Mezzanine Loan | Mixed-use | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 9,700,000 | |||||
HAWAII | Pre-Constructions Mezzanine Loan | Residential | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 12,000,000 | |||||
Mortgage Loans on Real Estate, Commercial and Consumer, Net | 4,700,000 | |||||
HAWAII | Pre-Constructions Mezzanine Loan | Residential | Ares Management | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 8,000,000 | |||||
HAWAII | Pre-Constructions Mezzanine Loan | Residential | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 4,000,000 | |||||
FLORIDA | Residential | Senior Mortgage Loans | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 22,000,000 | |||||
Mortgage Loans on Real Estate, Commercial and Consumer, Net | 17,500,000 | |||||
FLORIDA | Residential | Senior Mortgage Loans | Ares Management | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 17,500,000 | |||||
FLORIDA | Residential | Senior Mortgage Loans | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 4,500,000 | |||||
NEW YORK | Mezzanine Loan | Residential | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 23,300,000 | |||||
Mortgage Loans on Real Estate, Commercial and Consumer, Net | $ 10,800,000 | |||||
NEW YORK | Mezzanine Loan | Residential | Ares Management | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | 14,000,000 | |||||
NEW YORK | Mezzanine Loan | Residential | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding Principal | $ 9,300,000 |
RELATED PATY TRANSACTIONS - Rel
RELATED PATY TRANSACTIONS - Related Party Costs Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Payable | $ 3,163 | $ 2,628 | |
Continuing Operations | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Incurred | 11,212 | 10,772 | $ 10,245 |
Payable | 3,163 | 2,628 | |
Continuing Operations | Affiliated Entity | Management fees | |||
Related Party Transaction [Line Items] | |||
Incurred | 6,268 | 6,188 | 5,608 |
Payable | 1,576 | 1,549 | |
Continuing Operations | Affiliated Entity | Incentive Fees | |||
Related Party Transaction [Line Items] | |||
Incurred | 1,150 | 381 | 348 |
Payable | 540 | 0 | |
Continuing Operations | Affiliated Entity | General and administrative expenses | |||
Related Party Transaction [Line Items] | |||
Incurred | 3,570 | 3,899 | 3,441 |
Payable | 996 | 1,016 | |
Continuing Operations | Affiliated Entity | Direct costs | |||
Related Party Transaction [Line Items] | |||
Incurred | 224 | 304 | 848 |
Payable | $ 51 | $ 63 | |
Continuing Operations | Affiliated Entity | Direct costs | General and administrative expenses | |||
Related Party Transaction [Line Items] | |||
Incurred | 486 | ||
Continuing Operations | Affiliated Entity | Direct costs | Interest Expense | |||
Related Party Transaction [Line Items] | |||
Incurred | $ 362 |
DIVIDENDS AND DISTRIBUTIONS (De
DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
DIVIDENDS AND DISTRIBUTIONS | |||||||||||||||
Dividends per share amount paid (in dollars per share) | $ 0.31 | $ 0.29 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.26 | $ 1.16 | $ 1.08 | $ 1.04 |
Total cash dividends | $ 8,914 | $ 8,323 | $ 8,036 | $ 8,008 | $ 7,722 | $ 7,717 | $ 7,718 | $ 7,690 | $ 7,406 | $ 7,406 | $ 7,413 | $ 7,429 | $ 33,281 | $ 30,847 | $ 29,654 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) | Mar. 02, 2017USD ($)Loan | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)Loan | Dec. 31, 2016USD ($) | Dec. 19, 2014USD ($)property |
Variable Interest Entity [Line Items] | |||||
Loans held for investment | $ 1,524,873,000 | $ 1,726,283,000 | |||
Primary beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss | 68,200,000 | ||||
Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85% | |||||
Variable Interest Entity [Line Items] | |||||
Number of properties collateralized for mortgage loan | Loan | 11 | 13 | |||
Collateral amount | $ 289,600,000 | $ 341,200,000 | |||
Loans and Leases Receivable, Gross, Consumer, Mortgage | $ 51,600,000 | ||||
Offered Certificates | |||||
Variable Interest Entity [Line Items] | |||||
Debt Instrument, Prepayment Fee, Percent | 1.00% | ||||
Offered Notes | |||||
Variable Interest Entity [Line Items] | |||||
Debt Instrument, Prepayment Fee, Percent | 1.00% | ||||
Interest expense | $ 10,500,000 | $ 6,800,000 | $ 3,200,000 | ||
Parent Company | Offered Certificates | |||||
Variable Interest Entity [Line Items] | |||||
Preferred equity fully funded amount | 32,400,000 | ||||
Parent Company | Secured funding agreements and securitizations debt | |||||
Variable Interest Entity [Line Items] | |||||
Loans held for investment | 68,200,000 | ||||
Holdco | Offered Notes | |||||
Variable Interest Entity [Line Items] | |||||
Principal amount of certificates retained by wholly owned subsidiary of the entity | 35,800,000 | ||||
ACRE Commercial Mortgage 2017-FL3 Ltd And ACRE Commercial Mortgage 2017-FL3 LLC | Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85% | |||||
Variable Interest Entity [Line Items] | |||||
Loans held for investment | $ 308,800,000 | ||||
ACRC KA Investor LLC | |||||
Variable Interest Entity [Line Items] | |||||
Preferred equity fully funded amount | $ 170,000,000 | ||||
Number of properties | property | 22 | ||||
Fixed rate of return on investment | 10.95% | ||||
Parent Company | ACRC KA Investor LLC | |||||
Variable Interest Entity [Line Items] | |||||
Controlling financial interest held by parent | 51.00% | ||||
Third Party Institutional Investors | ACRC KA Investor LLC | |||||
Variable Interest Entity [Line Items] | |||||
Controlling financial interest held by third party institutional investors | 49.00% |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) | Sep. 30, 2016USD ($) | Jun. 28, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2016forward_sale_commitmentsloan_commitments | Dec. 31, 2017USD ($) | Oct. 31, 2014USD ($)note |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Loan Commitments Entered | loan_commitments | 49 | |||||
Secured funding agreements | $ 777,974,000 | $ 957,960,000 | ||||
Number of Forward Sale Commitments | forward_sale_commitments | 49 | |||||
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | Notes One | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Aggregate principal amount | $ 44,000,000 | |||||
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | Revolving Promissory Note | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Aggregate principal amount | $ 8,000,000 | |||||
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | Notes Receivable And Revolving Promissory Note Receivable | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Secured funding agreements | $ 51,900,000 | |||||
Notes | Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of notes | note | 2 | |||||
ACRE Capital Sale | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 93,000,000 | $ 93,000,000 | ||||
Minimum | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Amortization Period of Mortgage Servicing Rights (MSRs) (in years) | 10 years |
DISCONTINUED OPERATIONS - Net I
DISCONTINUED OPERATIONS - Net Income of Discontinued Operations Held for Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net income from operations of discontinued operations, net of income taxes | $ 0 | $ 0 | $ 4,221 |
ACRE Capital Sale | Discontinued Operations, Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Servicing fees, net | 11,081 | ||
Gains from mortgage banking activities | 24,034 | ||
Provision for loss sharing | 146 | ||
Change in fair value of mortgage servicing rights | (6,457) | ||
Mortgage banking revenue | 28,804 | ||
Management fees to affiliate | 446 | ||
Professional fees | 718 | ||
Compensation and benefits | 18,108 | ||
Transaction costs | 797 | ||
General and administrative expenses | 3,049 | ||
General and administrative expenses reimbursed to affiliate | 622 | ||
Total expenses | 23,740 | ||
Income from operations before income taxes | 5,064 | ||
Income tax expense (benefit) | 843 | ||
Net income from operations of discontinued operations, net of income taxes | $ 4,221 |
DISCONTINUED OPERATIONS - Incom
DISCONTINUED OPERATIONS - Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Expense [Abstract] | |||
Total income tax expense (benefit) | $ 446 | $ 178 | $ 230 |
ACRE Capital Sale | |||
Income Tax Expense [Abstract] | |||
Total income tax expense (benefit) | $ 446 | 178 | $ 230 |
Discontinued Operations, Disposed of by Sale | ACRE Capital Sale | |||
Income Tax Expense [Abstract] | |||
Current | (1,206) | ||
Deferred | 2,049 | ||
Total income tax expense (benefit) | $ 843 | ||
Reconciliation of the Company's effective tax rate to the Company's statutory federal income tax rate | |||
Federal statutory rate (as a percent) | 35.00% | ||
State income taxes | 4.40% | ||
Federal benefit of state tax deduction (as a percent) | (1.50%) | ||
Effective tax rate | 37.90% |
DISCONTINUED OPERATIONS - Relat
DISCONTINUED OPERATIONS - Related Party Transactions (Details) - ACRE Capital Sale - Discontinued Operations - Affiliated Entity $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Incurred | $ 1,136 |
Management fees | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Incurred | 446 |
General and administrative expenses | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Incurred | 622 |
Direct costs | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Incurred | $ 68 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net interest margin | $ 14,525 | $ 13,984 | $ 13,636 | $ 13,137 | $ 10,872 | $ 14,726 | $ 10,411 | $ 10,339 | |||
Net income attributable to common stockholders | $ 10,018 | $ 9,957 | $ 9,303 | $ 9,318 | $ 6,183 | $ 11,058 | $ 6,713 | $ 6,453 | $ 38,596 | $ 30,432 | $ 44,868 |
Net income per common share-Basic and Diluted (in dollars per share) | $ 0.35 | $ 0.35 | $ 0.33 | $ 0.33 | $ 0.22 | $ 0.39 | $ 0.24 | $ 0.23 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Feb. 21, 2019 | Feb. 14, 2019 | Feb. 06, 2019 | Jan. 11, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Subsequent Events | |||||||
Total Commitment | $ 887,974,000 | ||||||
Outstanding Principal | 1,534,743,000 | $ 1,737,286,000 | |||||
Loans held for investment | 1,524,873,000 | $ 1,726,283,000 | |||||
Wells Fargo Bank, NA | |||||||
Subsequent Events | |||||||
Total Commitment | $ 274,071,000 | ||||||
Subsequent event | |||||||
Subsequent Events | |||||||
Dividends declared per share of common stock (in dollars per share) | $ 0.33 | ||||||
Subsequent event | Senior Mortgage Loans, LIBOR Plus 3.15% | Student Housing | NORTH CAROLINA | Senior Mortgage Loans | |||||||
Subsequent Events | |||||||
Outstanding Principal | $ 30,000,000 | ||||||
Basis spread on variable interest rate | 3.15% | ||||||
Term of debt | 3 years | ||||||
Subsequent event | Senior Mortgage Loans, LIBOR Plus 4.25% | Mixed-use | FLORIDA | Senior Mortgage Loans | |||||||
Subsequent Events | |||||||
Outstanding Principal | $ 100,600,000 | ||||||
Loans held for investment | $ 37,000,000 | ||||||
Basis spread on variable interest rate | 4.25% | ||||||
Term of debt | 2 years | ||||||
Wells Fargo Bank, NA | |||||||
Subsequent Events | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 32,400,000 | ||||||
Wells Fargo Bank, NA | Subsequent event | 2019 FL3 CLO Securitization | |||||||
Subsequent Events | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 52,900,000 | ||||||
Notes Payable to Banks | Wells Fargo Bank, NA | |||||||
Subsequent Events | |||||||
Total Commitment | $ 308,800,000 | ||||||
Notes Payable to Banks | Subsequent event | Wells Fargo Bank, NA | 2019 FL3 CLO Securitization | |||||||
Subsequent Events | |||||||
Total Commitment | 504,100,000 | ||||||
Collateral amount | 557,000,000 | ||||||
Affiliated Entity | Wells Fargo Bank, NA | Subsequent event | 2019 FL3 CLO Securitization | |||||||
Subsequent Events | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 52,900,000 | ||||||
Affiliated Entity | Notes Payable to Banks | Subsequent event | Wells Fargo Bank, NA | 2019 FL3 CLO Securitization | |||||||
Subsequent Events | |||||||
Total Commitment | $ 58,500,000 |