Investments

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

The Company holds investments in various debt securities and beneficial interests which are the net residual interest of the investment trust. The Company's debt securities and beneficial interests are issued by securitization trusts, which are VIE's, that the Company has sponsored but which the Company does not consolidate since it has determined it is not the primary beneficiary. (See Note 10 - Related party transactions). The Company models the expected cash flows from the underlying loan pools held by the trusts using its Manager's proprietary pricing model, and believes any unrealized losses to be temporary. The following table presents information regarding the Company's investments and investments in beneficial interests ($ in thousands):


	As of December 31, 2019
	Basis⁽¹⁾		Gross unrealized gains		Gross unrealized losses		Carrying value (fair value)
Debt securities	$	230,408	$	1,643	$	(366)	$	231,685
Beneficial interests in securitization trusts	57,954		—		—		57,954
Total investments at fair value	$	288,362	$	1,643	$	(366)	$	289,639

(1)Basis amount is net of any realized amortized costs, principal paydowns and interest receivable on securities of $0.3 million


	As of December 31, 2018
	Basis⁽¹⁾		Gross unrealized gains		Gross unrealized losses		Carrying value (fair value)
Debt securities	$	147,386	$	250	$	(825)	$	146,811
Beneficial interests in securitization trusts	22,086		—		—		22,086
Total investments at fair value	$	169,472	$	250	$	(825)	$	168,897

(1)Basis amount is net of any realized amortized costs and principal paydowns.

The following table presents a breakdown of the Company's gross unrealized losses ($ in thousands):


	As of December 31, 2019
	Basis⁽¹⁾		Gross unrealized losses		Carrying value (fair value)
Debt securities due April 2058⁽²⁾	$	6,855	$	(9)	$	6,846
Debt securities due February 2057⁽²⁾	7,324		(1)		7,323
Debt securities due September 2059⁽³⁾	37,843		(356)		37,487
Total	$	52,022	$	(366)	$	51,656

(1)Basis amount is net of any realized amortized costs and principal paydowns.

(2)These securities have been in an unrealized loss position for 12 months or longer.

(3)This security has been in an unrealized loss position for less than 12 months.


	As of December 31, 2018
	Basis⁽¹⁾		Gross unrealized losses		Carrying value (fair value)
Debt securities due April 2058⁽²⁾	$	7,896	$	(315)	$	7,581
Debt securities due February 2057⁽²⁾	11,813		(203)		11,610
Debt securities due June 2058⁽²⁾	18,702		(3)		18,699
Debt securities due August 2058⁽²⁾	16,143		(297)		15,846
Debt securities due November 2058⁽²⁾	45,680		(7)		45,673
Total	$	100,234	$	(825)	$	99,409

(1)Basis amount is net of any realized amortized costs and principal paydowns.

(2)These securities have been in an unrealized loss position for less than 12 months.

In October 2016, the Company purchased subordinate debt securities for $6.3 million from Oileus Residential Loan Trust, a related party trust. These securities were sold during the fourth quarter of 2018 for a gain of $0.2 million.

During 2019 and 2018, the Company acquired $187.8 million and $175.3 million, respectively, in notes and beneficial interests issued by joint ventures between the Company and third party institutional accredited investors. Each joint venture issued senior notes and beneficial interests, which are trust certificates representing the residual investment of the trust. In certain transactions, the joint venture also issued subordinate notes. The Company acquired $139.6 million in senior notes and $16.8 million in subordinate notes, collectively “the Notes.” The Notes are accounted for as debt securities carried at fair value. As of December 31, 2019, the Company recorded a gross unrealized gain of $1.6 million and a gross unrealized loss of $0.4 million in fair value valuation adjustments in accumulated other comprehensive income. As of December 31, 2019 the Company carried the Notes on the consolidated Balance Sheet at a fair value of $231.7 million. As of December 31, 2018, the Company recorded a gross unrealized gain of $0.3 million and a gross unrealized loss of $0.8 million in fair valuation adjustments in accumulated other comprehensive income and carried the Notes on the Company's consolidated Balance Sheet at fair value of $146.8 million. During 2019, the Company sold senior notes issued by certain joint ventures for total proceeds of $39.6 million and recognized a gain of $8 thousand, net of transaction fees.

The Company also acquired $31.4 million and $21.8 million in beneficial interests issued by joint ventures in 2019 and 2018. The Company accounts for its investments in the beneficial interests at the lower of amortized cost or fair value and assesses its investment in Beneficial Interests for impairment on a quarterly basis. As of December 31, 2019, the Investments in Beneficial Interests were carried on the Company's consolidated Balance Sheet at $58.0 million. For the year ended December 31, 2018, the investments in beneficial interests were carried on the Company's consolidated Balance Sheet at $22.1 million.During the year ended December 31, 2018 the Company purchased shares of common stock in publicly traded real estate investment trusts. At December 31, 2018, all equity securities had been sold and the Company recognized a gain of $0.2 million, which is reflected in the Company's consolidated Statements of Income.