REAL ESTATE HELD FOR SALE, OTHER REAL ESTATE OWNED, AND OPERATING PROPERTIES

3 Months Ended

Mar. 31, 2018

Real Estate [Abstract]

REAL ESTATE HELD FOR SALE AND OTHER REAL ESTATE OWNED

REAL ESTATE HELD FOR SALE, OTHER REAL ESTATE OWNED, AND OPERATING PROPERTIES

As of March 31, 2018, we held total REO assets of $66.4 million, of which $12.6 million were held for sale, $21.2 million were held as operating properties, and $32.6 million were classified as other real estate owned. At December 31, 2017, we held total REO assets of $64.6 million, of which $5.9 million were held for sale, $20.5 million were held as operating properties, and $38.3 million were classified as other real estate owned.

During the three months ended March 31, 2018, we sold an easement on an REO project for $0.3 million (net of transaction costs and other non-cash adjustments) resulting in a total net gain on sale of $0.3 million. During the three months ended March 31, 2017, we sold two REO assets (or portions thereof) for $91.6 million (net of transaction costs and other non-cash adjustments), resulting in a total net gain of $6.8 million, the majority of which is included as a component of discontinued operations in the unaudited condensed consolidated statement of operations.

During the three months ended March 31, 2018, the Company made capital cost additions of $2.0 million to owned operating properties and REO assets. Depreciation expense relating to our operating properties was $0.2 million for the three months ended March 31, 2018 and $0.3 million for the three months ended March 31, 2017. The 2017 amount which is included as a component of discontinued operations in the unaudited condensed consolidated statement of operations.

REO Planned Development and Operations

Costs and expenses related to operating, holding and maintaining our operating properties and REO assets are expensed as incurred and included in operating property direct expenses, and expenses for non-operating real estate owned in the accompanying condensed consolidated statements of operations. For the three months ended March 31, 2018 and 2017, these costs and expenses were $2.4 million and $4.7 million ($3.7 million of which is included in loss from discontinued operations), respectively. Costs related to the development or improvements of the Company’s real estate assets are generally capitalized and costs relating to holding the assets are generally charged to expense. Cash outlays for capitalized development costs totaled $1.1 million and $0.9 million for the three months ended March 31, 2018 and 2017, respectively.