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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued Unaudited
32 The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of
March 31, 2016 and December 31, 2015 dollars in thousands:
March 31, 2016 Unaudited December 31, 2015
Principal Amount
Carrying Value
Fair Value Principal
Amount Carrying
Value Fair Value
Financial assets:
1
Real estate debt investments, net 648,543
2
648,746 673,568
863,154
2
864,840 892,682
Real estate debt investments, held for sale 212,201
3
212,177 212,329
— —
— Real estate securities, available for sale
73,738 47,493
47,493 25,500
17,943 17,943
Financial liabilities:
1
Credit facilities 453,703
453,703 453,703
461,768 461,768
461,768 Mortgage and other notes payable
374,126 371,732
373,216 372,368
369,878 369,602
_____________________________
1 The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.
2 As of March 31, 2016 and December 31, 2015, excludes future funding commitments of 25.2 million and 46.8 million, respectively.
3 As of March 31, 2016, excludes future funding commitments of 4.2 million.
Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been
comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.
Real Estate Debt Investments For CRE debt investments, fair value was approximated by comparing the current yield to the estimated yield for newly originated
loans with similar credit risk or the market yield at which a third party might expect to purchase such investment. Fair value was determined assuming fully-extended maturities regardless of structural or economic tests required to achieve such extended
maturities. The fair value of CRE debt investments held for sale is determined based on the expected sales price. These fair value measurements of CRE debt are generally based on unobservable inputs and, as such, are classified as Level 3 of the fair value
hierarchy.
Credit Facilities The Company has amounts outstanding under Term Loan Facilities. The Term Loan Facilities bear floating rates of interest. As
of the reporting date, the Company believes the carrying value approximates fair value. This fair value measurement is based on observable inputs, and as such, is classified as Level 2 of the fair value hierarchy.
Mortgage and Other Notes Payable For mortgage and other notes payable, the Company primarily uses rates currently available with similar terms and remaining
maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury rates as of the end of the reporting period or market credit spreads over the rate payable on fixed rate U.S. Treasury of like maturities. These fair value
measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.