6. FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2011

Fair Value Disclosures [Text Block]

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with ASC Topic 820, the Company discloses the fair value of its financial instruments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements), and gives the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (level 3 measurements). Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset and liability, either directly or indirectly, for substantially the full term on the financial instrument.

Assets and liabilities measured at fair value on a recurring basis are summarized below by hierarchy as of September 30 2011 and December 31, 2010:

	Fair value measurement at reporting date using
Description	Total September 30, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Time deposits	$	54,000		—	$	54,000		—
Money market mutual funds		1,914,000	$	1,914,000		—		—
Marketable securities:
Corporate debt securities		605,000		—		605,000		—
Marketable equity securities		1,282,000		1,282,000		—		—
Total assets	$	3,855,000	$	3,196,000	$	659,000	$	—
Liabilities:
Interest rate swap contract		1,976,000		—		1,976,000		—
Total liabilities	$	1,976,000		—	$	1,976,000		—

	Fair value measurement at reporting date using
Description	Total December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Time deposits	$	53,000		—	$	53,000		—
Money market mutual funds		2,450,000	$	2,450,000		—		—
Cash equivalents – restricted:
Money market mutual funds		2,380,000		2,380,000		—		—
Marketable securities:
Corporate debt securities		730,000		—		730,000		—
Marketable equity securities		1,364,000		1,364,000		—		—
Total assets	$	6,977,000	$	6,194,000	$	783,000		—
Liabilities:
Interest rate swap contract		1,462,000		—		1,462,000		—
Total liabilities	$	1,462,000		—	$	1,462,000		—

Assets measured at fair value on a nonrecurring basis are summarized below by hierarchy as of September 30, 2011 and December 31, 2010:

	Fair value measurement at reporting date using
	Total September 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total losses for the nine months ended
Description	2011		(Level 1)		(Level 2) (a)		(Level 3) (b)		9/30/2011
Assets:
Other investments by investment focus:
Technology & Communication	$	468,000	$	—	$	468,000	$	—	$	(3,000	)
Diversified businesses		1,427,000		—		1,427,000		—		—
Real estate and related		1,522,000		—		541,000		981,000		(84,000	)
Other		300,000		—		—		300,000		—
	$	3,717,000	$	—	$	2,436,000	$	1,281,000	$	(87,000	)
Goodwill (Bayshore)		5,628,000						5,628,000
Total assets	$	9,345,000	$	—	$	2,436,000	$	6,909,000	$	(87,000	)

	Fair value measurement at reporting date using
	Total December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total gains (losses) for year ended
Description	2010		(Level 1)		(Level 2) (a)		(Level 3) (b)		12/31/2010
Assets:
Other investments by investment focus:
Technology & Communication	$	469,000	$	—	$	469,000	$	—	$	(44,000	)
Diversified businesses		1,461,000		—		1,461,000		—		187,000
Real estate and related		1,539,000		—		539,000		1,000,000		(45,000	)
Other		300,000				—		300,000	$	14,000
	$	3,769,000	$	—	$	2,469,000	$	1,300,000	$	112,000
Goodwill (Bayshore)		5,628,000						5,628,000		(2,100,000	)
Total assets	$	9,397,000	$	—	$	2,469,000	$	6,928,000	$	(1,988,000	)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

For the nine months ended September 30, 2011 and 2010, respectively, $87,000 and $50,000 of OTTI adjustments were recognized. No OTTI adjustments were recognized for the three months ended September 30, 2011 and 2010.

The OTTI loss for the nine months ended September 30, 2011 primarily consists of a recognized impairment loss of approximately $84,000 in an investment in a partnership which operates and leases executive suites in Miami, Florida. The Company has funded $120,000 to date in this investment and the losses incurred were primarily associated with the initial start up of the venture in 2010.

(a) This class of other investments above which are measured on a nonrecurring basis using Level 2 input or recent observable information. These include investments in certain entities that calculate net asset value per share (or its equivalent such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed, “NAV”). This class primarily consists of private equity funds that have varying investment focus. These investments can never be redeemed with the funds. Instead, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. If these investments were held it is estimated that the underlying assets of the fund would be liquidated over 5 to 10 years. As of September 30, 2011 and December 31, 2010, it is probable that all of the investments in this class will be sold at an amount different from the NAV of the Company’s ownership interest in partners’ capital. Therefore, the fair values of the investments in this class have been estimated using recent observable information such as audited financial statements and/or statements of partners’ capital obtained directly from investees on a quarterly or other regular basis.

(b) This class of other investments above which are measured on a nonrecurring basis using Level 3 unobservable inputs consist of investments primarily in commercial real estate in Florida through private partnerships and two investments in the stock of private banks in Florida and Texas. The Company does not know when it will have the ability to redeem the investments and has categorized them as a Level 3 fair value measurement. The Level 3 real estate and related investments of approximately $1 million primarily consist of one investment in a commercial building located near the Company’s offices purchased in 2005. This investment is measured using primarily inputs provided by the managing member of the partnerships with whom the Company has done similar transactions in the past and is well known to management. The fair values of these real estate investments have been estimated using the net asset value of the Company’s ownership interest in partners’ capital. There have been no gains or losses realized or unrealized relating to these investments. The investments in private bank stocks include a private bank and trust located in Coral Gables, Florida in the amount of $250,000 made in 2009, and a $50,000 investment in a bank located in El Campo, Texas made in 2010. The fair values of these bank stock investments have been estimated using the cost method less distributions received and other than temporary impairments. This investment is valued using inputs provided by the management of the banks.

The following table includes a roll-forward of the investments classified within level 3 of the fair value hierarchy for the nine months ended September 30, 2011:

	Level 3 Investments:
Balance at January 1, 2011	$	1,300,000
Additional investment in limited partnership		30,000
Other than temporary impairment loss		(87,000	)
Transfers from Level 2		38,000
Balance at September 30, 2011	$	1,281,000

For the nine months ended September 30, 2011 the Company transferred approximately $38,000 from level 2 to level 3 to correct a misclassification of an investment in a real estate partnership as of December 31, 2010.