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

9 Months Ended

Sep. 30, 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 September 30, 2018, we held total REO assets of $67.5 million, of which $8.0 million were classified as held for sale, $25.8 million were held as operating properties, and $33.7 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 classified as held for sale, $20.5 million were held as operating properties, and $38.3 million were classified as other real estate owned.

During the nine months ended September 30, 2018, we sold three REO assets (or portions thereof) for $8.7 million (net of transaction costs and other adjustments) resulting in a total net gain on sale of $3.9 million, less allocated gains to non-controlling interests of $1.9 million. During the nine months ended September 30, 2017, the Company sold REO from seven projects (in whole or portions thereof), for $98.3 million (net of transaction costs and other non-cash adjustments) resulting in a total net gain on sale of $8.9 million, of which $6.8 million is included as a component of discontinued operations in the 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 September 30, 2018 and 2017, these costs and expenses were $2.5 million and $0.3 million ($16.0 thousand of which is included in income from discontinued operations), respectively. For the nine months ended September 30, 2018 and 2017, these costs and expenses were $7.2 million and $6.0 million ($4.0 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 $7.2 million and $1.4 million for the nine months ended September 30, 2018 and 2017, respectively.