COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

17. COMMITMENTS AND CONTINGENCIES

Leases

In 2011, the Company entered into a lease for its primary office space, which commenced on October 1, 2011 and expires on January 31, 2022 with no extension option. In 2012, the Company entered into a lease for secondary office space. The lease commenced on May 15, 2012 and would have expired on May 14, 2015 with no extension option. This lease was amended, however, on October 2, 2014, extending the expiration date from May 14, 2015 to May 14, 2018. The Company recorded $0.3 million and $0.8 million of rental expense for the three and nine months ended September 30, 2017, respectively, which is included in operating expenses in the consolidated statements of income. The Company recorded $0.3 million and $0.9 million, of rental expense for the three and nine months ended September 30, 2016, respectively, which is included in operating expenses in the consolidated statements of income.

The following is a schedule of future minimum rental payments required under the above operating leases ($ in thousands):



Period Ending December 31,	Amount

2017 (last 3 months)	$	314
2018	1,206
2019	1,180
2020	1,180
2021	1,180
Thereafter	99
Total	$	5,159

Unfunded Loan Commitments

As of September 30, 2017, the Company’s off-balance sheet arrangements consisted of $145.8 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing, at rates to be determined at the time of funding, which consisted of $145.8 million to provide additional first mortgage loan financing. As of December 31, 2016, the Company’s off-balance sheet arrangements consisted of $147.7 million of unfunded commitments of mortgage loan receivables held for investment, at rates to be determined at the time of funding, which was composed of $146.3 million to provide additional first mortgage loan financing and $1.4 million to provide additional mezzanine loan financing. Such commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. These commitments are not reflected on the consolidated balance sheets.

Hurricanes Harvey, Irma and Maria

During 2017, Hurricanes Harvey, Irma and Maria inflicted damage on certain of the properties owned by the Company or securing loans held by the Company with carrying amounts of $13.0 million, $295.6 million and $23.9 million, respectively, as of September 30, 2017. The damage to individual properties owned by the Company was not significant and all properties are open and operating. The Company has insurance coverage on the properties it owns and expects to fully recover amounts for necessary repairs in excess of its deductibles. The Company’s loan agreements require adequate insurance to be maintained by the respective borrowers. The Company understands that the damages to the affected collateral underlying the Company’s mortgage loans were not significant and that all properties are open and operating. Accordingly, the Company does not believe it is exposed to any additional loan losses as a result of each hurricane’s impact on its borrowers and the underlying property collateral.