REAL ESTATE RELATED AND OTHER LOANS, RESIDENTIAL MORTGAGE LOANS AND SUBPRIME MORTGAGE LOANS (Tables)
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12 Months Ended |
Dec. 31, 2016 |
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| Receivables [Abstract] |
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| Schedule of real estate and other related loans, residential mortgage loans and subprime mortgage loans |
The following is a summary of real estate related and other loans, residential mortgage loans and subprime mortgage loans. The loans contain various terms, including fixed and floating rates, self-amortizing and interest only. They are generally subject to prepayment.
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December 31, 2016 |
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December 31, 2015 |
Loan Type |
|
Outstanding
Face Amount |
|
Carrying
Value (A) |
|
Valuation Allowance (Reversal) |
|
Loan
Count |
|
Wtd.
Avg
Yield |
|
Wtd
Avg
Coupon |
|
Wtd
Avg
Life
(Years) (B) |
|
Floating Rate
Loans as a %
of Face
Amount |
|
Delinquent
Face Amount
(C) |
|
Carrying
Value |
|
Loan Count |
|
Wtd. Avg.
Yield |
Mezzanine Loans |
|
$ |
17,767 |
|
|
$ |
— |
|
|
$ |
— |
|
|
2 |
|
|
0.00 |
% |
|
8.39 |
% |
|
0.0 |
|
100.0 |
% |
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$ |
17,767 |
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$ |
19,433 |
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3 |
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8.00 |
% |
Corporate Loans |
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120,381 |
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55,612 |
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3,826 |
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4 |
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22.49 |
% |
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15.20 |
% |
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0.5 |
|
0.0 |
% |
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59,384 |
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129,765 |
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4 |
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22.42 |
% |
Total Real Estate Related and other Loans Held-for-Sale, Net (D) |
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$ |
138,148 |
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$ |
55,612 |
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$ |
3,826 |
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6 |
|
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22.49 |
% |
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14.32 |
% |
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0.5 |
|
12.9 |
% |
|
$ |
77,151 |
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$ |
149,198 |
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7 |
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20.54 |
% |
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Residential Mortgage Loans Held-for-Sale, Net (E) |
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$ |
771 |
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$ |
231 |
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$ |
213 |
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3 |
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3.40 |
% |
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3.05 |
% |
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1.8 |
|
100.0 |
% |
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$ |
628 |
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$ |
532 |
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4 |
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62.02 |
% |
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Subprime Mortgage Loans Subject to Call Option |
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$ |
— |
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$ |
— |
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$ |
380,806 |
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(A) |
The aggregate United States federal income tax basis for such assets at December 31, 2016 was approximately $75.5 million (unaudited). Carrying value includes negligible interest receivable for the residential housing loans.
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(B) |
The weighted average maturity is based on the timing of expected cash flows on the assets. |
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(C) |
Includes loans that are 60 days or more past due (including loans that are in foreclosure and borrowers in bankruptcy) or considered real estate owned (“REO”). As of December 31, 2016 and December 31, 2015, $77.2 million and $63.5 million face amount of real estate related and other loans, respectively, was on non-accrual status.
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(D) |
Loans which are more than 3% of the total current carrying value (or $1.7 million) at December 31, 2016 are as follows:
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December 31, 2016 |
Loan Type |
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Outstanding
Face Amount |
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Carrying Value |
|
Prior Liens |
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Loan
Count |
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Yield (1) |
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Coupon (1) |
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Weighted Average
Life (Years) |
Individual Corporate Loan (2) |
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$ |
60,997 |
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$ |
55,465 |
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$ |
554,480 |
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1 |
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22.50 |
% |
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22.50 |
% |
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0.5 |
Others (3) |
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77,151 |
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147 |
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327,234 |
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5 |
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20.00 |
% |
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7.85 |
% |
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0.5 |
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$ |
138,148 |
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$ |
55,612 |
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6 |
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22.49 |
% |
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14.32 |
% |
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0.5 |
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(1) |
For Others, represents weighted average yield and weighted average coupon. |
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(2) |
Interest accrued to principal balance over life to maturity. Prior Liens reflect indebtedness and other claims on the assets of the related companies which support the Individual Corporate Loan. |
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(3) |
Various terms of payment. This represents $59.4 million and $17.8 million of corporate loans and mezzanine loans, respectively. Each of the five loans had a carrying value of less than $1.7 million at December 31, 2016. Prior Liens reflect face amounts of third party liens that are senior to Drive Shack Inc.’s position for Others.
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(E) |
Loans acquired at a discount for credit quality. Residential mortgage loans held-for-sale, net is recorded in receivables and other assets on the Consolidated Balance Sheets. |
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| Schedule of large loans |
Loans which are more than 3% of the total current carrying value (or $1.7 million) at December 31, 2016 are as follows:
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December 31, 2016 |
Loan Type |
|
Outstanding
Face Amount |
|
Carrying Value |
|
Prior Liens |
|
Loan
Count |
|
Yield (1) |
|
Coupon (1) |
|
Weighted Average
Life (Years) |
Individual Corporate Loan (2) |
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$ |
60,997 |
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$ |
55,465 |
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$ |
554,480 |
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1 |
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22.50 |
% |
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22.50 |
% |
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0.5 |
Others (3) |
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77,151 |
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147 |
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327,234 |
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5 |
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20.00 |
% |
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7.85 |
% |
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0.5 |
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$ |
138,148 |
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$ |
55,612 |
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6 |
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22.49 |
% |
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14.32 |
% |
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0.5 |
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(1) |
For Others, represents weighted average yield and weighted average coupon. |
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(2) |
Interest accrued to principal balance over life to maturity. Prior Liens reflect indebtedness and other claims on the assets of the related companies which support the Individual Corporate Loan. |
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(3) |
Various terms of payment. This represents $59.4 million and $17.8 million of corporate loans and mezzanine loans, respectively. Each of the five loans had a carrying value of less than $1.7 million at December 31, 2016. Prior Liens reflect face amounts of third party liens that are senior to Drive Shack Inc.’s position for Others.
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| Schedule of real estate related loans by maturity |
The following is a summary of real estate related and other loans by maturity at December 31, 2016:
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Year of Maturity (A)
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Outstanding
Face Amount |
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Carrying Value |
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Number of
Loans |
Delinquent (B)
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$ |
77,151 |
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$ |
147 |
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5 |
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2017 |
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— |
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— |
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— |
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2018 |
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— |
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— |
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— |
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2019 |
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60,997 |
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55,465 |
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1 |
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2020 |
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— |
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— |
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— |
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2021 |
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— |
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— |
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— |
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Thereafter |
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— |
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— |
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— |
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Total |
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$ |
138,148 |
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$ |
55,612 |
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6 |
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(A) |
Based on the final extended maturity date of each loan investment as of December 31, 2016.
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(B) |
Includes loans that are non-performing, in foreclosure, or under bankruptcy. |
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| Schedule of activity in carrying value of real estate related and other loans and residential mortgage loans |
Activities relating to the carrying value of real estate related and other loans and residential mortgage loans are as follows:
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Held for Sale |
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Held for Investment |
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Real Estate
Related Loans |
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Residential
Mortgage Loans (A) |
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Residential
Mortgage Loans |
Balance at December 31, 2013 |
$ |
437,530 |
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|
$ |
2,185 |
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$ |
255,450 |
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Purchases / additional fundings |
— |
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— |
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— |
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Interest accrued to principal balance |
20,830 |
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— |
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— |
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Principal pay downs |
(240,937 |
) |
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(9,574 |
) |
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(9,436 |
) |
Sales |
— |
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(233,349 |
) |
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— |
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Transfer to held-for-sale |
— |
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|
246,121 |
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(246,121 |
) |
Valuation (allowance) reversal on loans |
3,303 |
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(51 |
) |
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(833 |
) |
Accretion of loan discount and other amortization |
8,867 |
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— |
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|
115 |
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Other |
607 |
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(1,478 |
) |
|
825 |
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Balance at December 31, 2014 |
$ |
230,200 |
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$ |
3,854 |
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$ |
— |
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Purchases / additional fundings |
— |
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— |
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— |
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Interest accrued to principal balance |
27,717 |
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— |
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— |
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Principal pay downs |
(46,696 |
) |
|
(134 |
) |
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— |
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Sales |
(55,574 |
) |
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(2,925 |
) |
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— |
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Valuation allowance on loans |
(9,284 |
) |
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(257 |
) |
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— |
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Accretion of loan discount and other amortization |
3,203 |
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— |
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— |
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Other |
(368 |
) |
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(6 |
) |
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— |
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Balance at December 31, 2015 |
$ |
149,198 |
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$ |
532 |
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$ |
— |
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Purchases / additional fundings |
— |
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— |
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— |
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Interest accrued to principal balance |
29,025 |
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— |
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— |
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Principal pay downs |
(109,892 |
) |
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(40 |
) |
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— |
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Sales |
(19,433 |
) |
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— |
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— |
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Valuation (allowance) reversal on loans |
(3,826 |
) |
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(213 |
) |
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— |
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Accretion of loan discount and other amortization |
10,540 |
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— |
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— |
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Loss on settlement of loans |
— |
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(48 |
) |
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— |
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Balance at December 31, 2016 |
$ |
55,612 |
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$ |
231 |
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$ |
— |
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(A) |
Residential mortgage loans held-for-sale, net is recorded in receivables and other assets on the Consolidated Balance Sheets. |
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| Rollforward of loss allowance for real estate related and other loans and residential mortgage loans |
The following is a rollforward of the related loss allowance:
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Held for Sale |
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Held for Investment |
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Real Estate Related and Other Loans |
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Residential Mortgage Loans (A) |
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Residential Mortgage Loans (B) |
Balance at December 31, 2013 |
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$ |
(94,037 |
) |
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$ |
(824 |
) |
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$ |
(12,247 |
) |
Charge-offs (C) |
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14,808 |
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|
84 |
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|
711 |
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Transfer to held-for-sale |
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— |
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(12,369 |
) |
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12,369 |
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Sales |
|
— |
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|
13,006 |
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|
— |
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Valuation (allowance) reversal on loans |
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3,303 |
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(51 |
) |
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(833 |
) |
Balance at December 31, 2014 |
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(75,926 |
) |
|
(154 |
) |
|
— |
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Charge-offs (C) |
|
14,345 |
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|
160 |
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— |
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Sales |
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— |
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|
— |
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|
— |
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Valuation (allowance) reversal on loans |
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(9,284 |
) |
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(257 |
) |
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— |
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Balance at December 31, 2015 |
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$ |
(70,865 |
) |
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$ |
(251 |
) |
|
$ |
— |
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Charge-offs (C) |
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— |
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— |
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— |
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Sales |
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— |
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— |
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— |
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Valuation (allowance) reversal on loans |
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(3,826 |
) |
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(213 |
) |
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— |
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Balance at December 31, 2016 |
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$ |
(74,691 |
) |
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$ |
(464 |
) |
|
$ |
— |
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(A) |
Residential mortgage loans held-for-sale, net is reported in receivables and other assets on the Consolidated Balance Sheets. |
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(B) |
The allowance for credit losses was determined based on the guidance for loans acquired with deteriorated credit quality. |
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(C) |
The charge-offs for real estate related loans represent zero, four and three loans which were written off, sold, restructured, or paid off at a discounted price during 2016, 2015 and 2014, respectively.
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| Schedule of geographic distribution of real estate related and other loans and residential mortgage loans |
The table below summarizes the geographic distribution of real estate related and other loans and residential loans at December 31, 2016:
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Real Estate Related and Other Loans |
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Residential Mortgage Loans |
Geographic Location |
|
Outstanding Face Amount |
|
Percentage |
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Outstanding Face Amount |
|
Percentage |
Northeastern U.S. |
|
$ |
— |
|
|
0.0 |
% |
|
$ |
523 |
|
|
67.8 |
% |
Southeastern U.S. |
|
— |
|
|
0.0 |
% |
|
248 |
|
|
32.2 |
% |
Foreign |
|
63,454 |
|
|
100.0 |
% |
|
— |
|
|
— |
|
|
|
$ |
63,454 |
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|
100.0 |
% |
|
$ |
771 |
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|
100.0 |
% |
Other |
|
74,694 |
|
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(A) |
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$ |
138,148 |
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(A) |
Includes corporate loans which are not directly secured by real estate assets. |
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