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2326301 - Disclosure - FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
(http://newcastleinv.com/role/FairValueOfFinancialInstrumentsTables)
Table(Implied)
Slicers (applies to each fact value in each table cell)
Fair Value Disclosures [Abstract]Period [Axis]
2016-01-01 - 2016-12-31
Fair Value Disclosures [Abstract]
 
Schedule of carrying value and estimated fair value of assets and liabilities
The following table summarizes the carrying values and estimated fair values of Drive Shack Inc.’s financial instruments at December 31, 2016 and 2015:
 
December 31, 2016
December 31, 2015
 
Carrying
Value
 
Estimated
Fair Value
 
Fair Value Method (A)
 
Carrying
Value
 
Estimated
Fair Value
Assets
 
 
 
 
 
 
 
 
 
Real estate securities, available-for-sale
$
1,950

 
$
1,950

 
Broker/counterparty quotations, pricing services, pricing models
 
$
59,034

 
$
59,034

Real estate securities, pledged as collateral
627,304

 
627,304

 
Broker/counterparty quotations, pricing services
 
105,963

 
105,963

Real estate related and other loans, held-for-sale, net
55,612

 
61,144

 
Pricing models, broker/counterparty quotations, pricing services
 
149,198

 
165,270

Residential mortgage loans, held-for-sale, net (B)
231

 
249

 
Broker/counterparty quotations, pricing models
 
532

 
569

Subprime mortgage loans subject to call option (C)

 

 
(C)
 
380,806

 
380,806

Restricted cash
6,404

 
6,404

 
 
 
4,469

 
4,469

Cash and cash equivalents
140,140

 
140,140

 
 
 
45,651

 
45,651

Non-hedge derivative assets (D)
856

 
856

 
Counterparty quotations, pricing services
 
127

 
127

 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
CDO bonds payable (E)
$

 
$

 
Pricing models
 
$
92,933

 
$
15,193

Other bonds and notes payable (E)

 

 
Pricing models
 
16,162

 
16,620

Repurchase agreements
600,964

 
600,964

 
Counterparty quotations, market comparables
 
418,458

 
418,625

Credit facilities and obligations under capital leases
115,284

 
115,284

 
Pricing models
 
11,258

 
11,258

Financing of subprime mortgage loans subject to call option (C)

 

 
(C)
 
380,806

 
380,806

Junior subordinated notes payable
51,217

 
26,756

 
Pricing models
 
51,225

 
24,649

Non-hedge derivative liabilities (D)

 

 
Counterparty quotations, pricing services
 
684

 
684

(A)
Methods are listed in order of priority. In the case of real estate securities and real estate related and other loans, broker quotations are obtained if available and practicable, otherwise counterparty quotations or pricing service valuations are obtained or, finally, internal pricing models are used. Internal pricing models are only used for (i) securities and loans that are not traded in an active market, and, therefore, have little or no price transparency, and for which significant unobservable inputs must be used in estimating fair value, or (ii) loans or debt obligations which are private and untraded.
(B)
Residential mortgage loans held-for-sale, net is recorded in receivables and other assets on the Consolidated Balance Sheets.
(C)
Represents an option, not an obligation, to repurchase loans from Drive Shack Inc.’s subprime mortgage loan securitizations (Note 6).
(D)
Represents derivative assets and liabilities including interest rate swaps and TBA forward contracts (Note 9).
(E)
Drive Shack Inc. notes that the unrealized gain on the liabilities within such structures cannot be fully realized. Assets held within CDOs and other non- recourse structures are generally not available to satisfy obligations outside of such financings, except to the extent Drive Shack Inc. receives net cash flow distributions from such structures. Furthermore, creditors or beneficial interest holders of these structures have no recourse to the general credit of Drive Shack Inc. Therefore, Drive Shack Inc.’s exposure to the economic losses from such structures is limited to its invested equity in them and economically their book value cannot be less than zero. As a result, the fair value of Drive Shack Inc.’s net investments in these non-recourse financing structures is equal to the present value of their expected future net cash flows.
 
 
Schedule of assets and liabilities measured at fair value on a recurring basis
The following table summarizes financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016:
 
 
 
Fair Value
 
Carrying Value
 
Level 2
 
Level 3
 
Total
 
 
 
Market Quotations
(Observable)
 
Market Quotations (Unobservable)
 
Internal Pricing Models
 
 
Assets:
 
 
 
 
 
 
 
 
 
Real estate securities, available for sale:
 
 
 
 
 
 
 
 
 
ABS- Non-Agency RMBS
$
1,950

 
$

 
$

 
$
1,950

 
$
1,950

Real estate securities, available for sale total
$
1,950

 
$

 
$

 
$
1,950

 
$
1,950

 
 
 
 
 
 
 
 
 
 
Real estate securities, pledged as collateral:
 
 
 
 
 
 
 
 
 
FNMA/FHLMC
$
627,304

 
$
627,304

 
$

 
$

 
$
627,304

Real estate securities, pledged as collateral
$
627,304

 
$
627,304

 
$

 
$

 
$
627,304

 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
Interest rate cap, not treated as hedge
$
371

 
$
371

 
$

 
$

 
$
371

TBAs, not treated as hedges
485

 
485

 

 

 
485

Derivative assets total
$
856

 
$
856

 
$

 
$

 
$
856


 
 
Schedule of quantitative information about significant unobservable inputs
The following table provides quantitative information regarding the significant unobservable inputs used by Drive Shack Inc. for assets and liabilities measured at fair value on a recurring basis as of December 31, 2016. This table excludes inputs used to measure fair value that are not developed by Drive Shack Inc., such as broker prices and other third-party pricing service valuations.
 
 
 
 
 
 
Weighted Average Significant Input
Asset Type
 
Amortized
Cost
Basis
 
Fair
Value
 
Discount Rate
 
Prepayment Speed
 
Cumulative Default Rate
 
Loss Severity
ABS - Non-Agency RMBS
 
$
782

 
$
1,950

 
12.0
%
 
3.9
%
 
5.1
%
 
64.2
%
Total
 
$
782

 
$
1,950

 
 
 
 
 
 
 
 
 
 
Schedule of change in fair value of Level 3 investments
Drive Shack Inc.’s investments in instruments measured at fair value on a recurring basis using Level 3 inputs changed as follows:
 
Level 3 Assets
 
CMBS
 
ABS - Non-Agency RMBS
 
Equity/Other Securities
 
Total
 
 
 
 
 
 
 
 
Balance at December 31, 2014
$
178,763

 
$
45,035

 
$
7,956

 
$
231,754

Transfers
 
 
 
 
 
 
 
Transfer into Level 3

 

 
367

 
367

Total gains (losses) (A)
 
 
 
 
 
 
 
Included in net income (B)
12,038

 
14,826

 
(367
)
 
26,497

Included in other comprehensive income (loss)
(18,797
)
 
(12,933
)
 
1,775

 
(29,955
)
Amortization included in interest income
6,866

 
2,849

 

 
9,715

Purchases, sales and settlements
 
 
 
 
 
 
 
Purchases

 

 

 

Proceeds from sales
(102,607
)
 
(37,582
)
 

 
(140,189
)
Proceeds from repayments
(36,579
)
 
(2,576
)
 

 
(39,155
)
Balance at December 31, 2015
$
39,684

 
$
9,619

 
$
9,731

 
$
59,034

CDO VI deconsolidation
(37,179
)
 
(6,710
)
 

 
(43,889
)
Total gains (losses) (A)
 
 
 
 
 
 
 
Included in net income (B)
(108
)
 
3

 
11,232

 
11,127

Included in other comprehensive income (loss)
(658
)
 
(1,015
)
 
(9,731
)
 
(11,404
)
Amortization included in interest income
879

 
278

 

 
1,157

Purchases, sales and settlements
 
 
 
 
 
 
 
Purchases

 

 

 

Proceeds from sales
(2
)
 
(3
)
 
(11,232
)
 
(11,237
)
Proceeds from repayments
(2,616
)
 
(222
)
 

 
(2,838
)
Balance at December 31, 2016
$

 
$
1,950

 
$

 
$
1,950

(A)
None of the gains (losses) recorded in earnings during the periods is attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates.
(B)
These gains (losses) are recorded in the following line items in the Consolidated Statements of Operations:
 
Year Ended December 31,
 
2016
 
2015
Realized/unrealized gain on investments
$
11,237

 
$
28,854

Impairment (reversal)
(110
)
 
(2,357
)
Total
$
11,127

 
$
26,497

Realized/unrealized gain on investments, net, from investments transferred into Level 3 during the period
$

 
$

 
 
Schedule of gains losses on fair value of real estate securities
These gains (losses) are recorded in the following line items in the Consolidated Statements of Operations:
 
Year Ended December 31,
 
2016
 
2015
Realized/unrealized gain on investments
$
11,237

 
$
28,854

Impairment (reversal)
(110
)
 
(2,357
)
Total
$
11,127

 
$
26,497

Realized/unrealized gain on investments, net, from investments transferred into Level 3 during the period
$

 
$

 
 
Schedule of fair value for real estate related and other loans and residential mortgage loans held for sale
The following tables summarize certain information for real estate related and other loans as of December 31, 2016:
 
 
 
 
 
 
Significant Input
 
 
 
 
 
 
Range
 
Weighted Average
Loan Type
 
Carrying Value
 
Fair Value
 
Discount Rate
 
Loss Severity
 
Discount Rate
 
Loss Severity
Corporate Loans
 
$
55,612

 
$
61,144

 
0.0% - 22.5%
 
0.0% - 100.0%
 
22.5
%
 
49.3
%
Total Real Estate Related and Other Loans Held for Sale, Net (A)
 
$
55,612

 
$
61,144

 
 
 
 
 
 
 
 
(A)
 Excludes $17.8 million face amount of mezzanine loans which have a zero carrying value.