Debt and Preferred Equity Investments

During the nine months ended September 30, 2014 and 2013, our debt and preferred equity investments, net of discounts and deferred origination fees, increased $476.6 million and $497.4 million, respectively, due to originations, purchases, accretion of reserves, discounts and paid-in-kind interest. We recorded repayments, participations and sales of $348.5 million and $530.2 million during the nine months ended September 30, 2014 and 2013, respectively, which offset the increases in debt and preferred equity investments.

Debt Investments

As of September 30, 2014 and December 31, 2013, we held the following debt investments with an aggregate weighted average current yield of 10.72% at September 30, 2014 (in thousands):



Loan Type	September 30, 2014 Funding Obligations		September 30, 2014 Senior Financing		September 30, 2014 Carrying Value(1)		December 31, 2013 Carrying Value(1)		Initial Maturity Date
Fixed Rate Investments:
Jr. Mortgage Participation	$	—	$	398,500	$	11,913	$	11,856	March 2015
Jr. Mortgage Participation/Mezzanine Loan	—		205,000		70,080		68,319		February 2016
Jr. Mortgage Participation/Mezzanine Loan	—		164,744		45,355		44,742		May 2016
Mezzanine Loan	—		177,000		14,298		15,012		May 2016
Jr. Mortgage Participation	—		133,000		49,000		49,000		June 2016
Mezzanine Loan	—		165,000		71,592		71,312		November 2016
Jr. Mortgage Participation/Mezzanine Loan⁽²⁾	—		1,109,000		97,101		26,884		March 2017
Other⁽²⁾	—		—		65,674		54,099		March 2017
Mezzanine Loan⁽³⁾	19,555		521,750		21,456		20,954		June 2017
Mezzanine Loan	—		539,000		50,412		—		July 2018
Mortgage Loan⁽⁴⁾	—		—		26,196		—		February 2019
Mortgage Loan	—		—		667		—		August 2019
Mezzanine Loan	—		15,000		3,500		3,500		September 2021
Mezzanine Loan⁽⁵⁾	—		90,000		19,929		19,926		November 2023
Total fixed rate	$	19,555	$	3,517,994	$	547,173	$	385,604
Floating Rate Investments:
Mezzanine Loan	15,309		50,000		29,650		—		April 2015
Mortgage/Mezzanine Loan	—		—		109,252		—		June 2015
Mezzanine Loan	—		110,000		49,482		49,110		September 2015
Mezzanine Loan	8,262		110,295		41,675		27,662		December 2015
Mezzanine Loan	—		775,000		73,602		72,823		March 2016
Mezzanine Loan⁽⁶⁾	—		160,000		22,561		22,526		June 2016
Mezzanine Loan	—		115,000		24,909		25,590		July 2016
Mezzanine Loan	8,448		172,105		28,855		25,725		November 2016
Mezzanine Loan	333		33,833		11,825		11,798		December 2016
Mortgage/Mezzanine Loan	3,130		109,351		38,186		—		July 2017
Mortgage/Mezzanine Loan	—		—		22,786		—		July 2017
Mortgage/Mezzanine Loan	—		—		16,835		—		September 2017
Jr. Mortgage Participation/Mezzanine Loan	—		55,000		20,538		20,553		July 2018
Mortgage/Mezzanine Loan	—		—		17,996		—		February 2019
Mezzanine Loan	—		38,000		21,798		—		March 2019
Mortgage Loan⁽⁷⁾	—		—		—		30,000
Jr. Mortgage Participation⁽⁸⁾	—		—		—		24,046



Loan Type	September 30, 2014 Funding Obligations		September 30, 2014 Senior Financing		September 30, 2014 Carrying Value(1)		December 31, 2013 Carrying Value(1)			Initial Maturity Date
Jr. Mortgage Participation/Mezzanine Loan⁽⁸⁾	—		—		—		131,724
Mezzanine Loan⁽⁹⁾	—		—		—		59,892
Jr. Mortgage Participation⁽⁹⁾	—		—		—		10,873
Mezzanine Loan⁽⁹⁾	—		—		—		38,549
Total floating rate	$	35,482	$	1,728,584	$	529,950	$	550,871
Total	$	55,037	$	5,246,578	1,077,123		936,475
Loan loss reserve					—		(1,000		)
Total					$	1,077,123	$	935,475

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(1)	Carrying value is net of discounts, original issue discounts and deferred origination fees.

(2)

During the three months ended March 31, 2014, we recognized $10.1 million of previously unaccrued interest income as deemed collectible as a result of the subsequent sale of the property, which closed in June 2014. In connection with the sale of the underlying property, our existing $66.7 million mezzanine loan was defeased and is now shown separately, as it is collateralized by defeasance securities. The buyer assumed our $30.0 million participating interest on the mortgage and we acquired a $67.3 million participating interest on the mezzanine loan.


(3)	Carrying value is net of $41.3 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.


(4)	In September 2014, we acquired a $26.4 million mortgage loan at a $0.2 million discount and a $5.7 million junior mortgage participation at a $5.7 million discount. The junior mortgage participation was a nonperforming loan at acquisition and is currently on a non-accrual status.


(5)	Carrying value is net of $5.0 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.


(6)	Carrying value is net of $7.4 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.


(7)	This loan was repaid in May 2014.


(8)	This loan was repaid in July 2014.


(9)	This loan was repaid in August 2014.

Preferred Equity Investments

As of September 30, 2014 and December 31, 2013, we held the following preferred equity investments with an aggregate weighted average current yield of 9.76% at September 30, 2014 (in thousands):



Type	September 30, 2014 Senior Financing		September 30, 2014 Carrying Value (1)		December 31, 2013 Carrying Value (1)		Initial Mandatory Redemption
Preferred equity⁽²⁾	$	550,000	$	121,158	$	115,198	July 2015
Preferred equity⁽²⁾	926,260		224,720		218,330		July 2016
Preferred equity	70,000		9,950		9,940		November 2017
Preferred equity⁽³⁾	—		—		25,896
	$	1,546,260	$	355,828	$	369,364

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(1)	Carrying value is net of discounts and deferred origination fees.


(2)	The difference between the pay and accrual rates is included as an addition to the principal balance outstanding.


(3)	This preferred equity investment was redeemed in April 2014.

The following table is a rollforward of our total loan loss reserves at September 30, 2014 and December 31, 2013 (in thousands):



	September 30, 2014			December 31, 2013
Balance at beginning of year	$	1,000		$	7,000
Expensed	—			—
Recoveries	—			—
Charge-offs and reclassifications	(1,000		)	(6,000		)
Balance at end of period	$	—		$	1,000

At September 30, 2014 and December 31, 2013, all debt and preferred equity investments were performing in accordance with the terms of the relevant investments, except for the nonperforming loan acquired in September 2014 as noted in the debt investments table above.

We have determined that we have one portfolio segment of financing receivables at September 30, 2014 and December 31, 2013 comprising commercial real estate which is primarily recorded in debt and preferred equity investments. Included in other assets is an additional amount of financing receivables totaling $132.6 million and $172.8 million at September 30, 2014 and December 31, 2013, respectively. No financing receivables were 90 days past due at September 30, 2014.