XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

Debt and Preferred Equity Investments | 9 Months Ended
--- | ---
Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract] |
Debt and Preferred Equity Investments | Debt and Preferred Equity Investments Below is a summary of the activity in our debt and preferred equity investments for the nine months ended September 30, 2020 and the twelve months ended December 31, 2019 (in thousands):
| September 30, 2020 |  | December 31, 2019
Balance at beginning of year (1) | $ | 1,580,306 |  |  | $ | 2,099,393 |
Debt investment originations/accretion (2) | 383,365 |  |  | 652,866 |
Preferred equity investment originations/accretion (2) | 163,821 |  |  | 14,736 |
Redemptions/sales/syndications/equity ownership/amortization (3) | (956,869) |  |  | (1,190,689) |
Net change in loan loss reserves | (17,260) |  |  | 4,000 |
Balance at end of period (1) | $ | 1,153,363 |  |  | $ | 1,580,306 |
(1)Net of unamortized fees, discounts, and premiums. (2)Accretion includes amortization of fees and discounts and paid-in-kind investment income. (3)Certain participations in debt investments that were sold or syndicated, but did not meet the conditions for sale accounting, are included in other assets and other liabilities on the consolidated balance sheets. Below is a summary of our debt and preferred equity investments as of September 30, 2020 (dollars in thousands):
| Floating Rate |  | Fixed Rate |  | Total Carrying Value | Senior Financing | Maturity (1)
Type | Carrying Value | Face Value | Interest Rate |  | Carrying Value | Face Value | Interest Rate |
Senior Mortgage Debt | $ | 62,683 |  | $63,425 | L + 2.00% - 3.50% |  | $ | 1,249 |  | $1,250 | 3.00% |  | $ | 63,932 |  | $ | — |  | 2020 - 2022
Junior Mortgage Debt | 85,295 |  | 96,697 | L + 6.00% - 7.25% |  | 32,805 |  | 33,000 | 6.00% |  | $ | 118,100 |  | 542,241 |  | 2020 - 2023
Mezzanine Debt | 278,726 |  | 283,336 | L + 4.95% - 14.62% |  | 436,040 |  | 447,265 | 2.90% - 9.30% |  | $ | 714,766 |  | 4,447,803 |  | 2020 - 2029
Preferred Equity | — |  | — | — |  | 256,565 |  | 259,431 | 6.50% - 11.00% |  | $ | 256,565 |  | 1,962,750 |  | 2022 - 2027
Balance at end of period | $ | 426,704 |  | $ | 443,458 |  | — |  | $ | 726,659 |  | $ | 740,946 |  | — |  | $ | 1,153,363 |  |  |
(1)Excludes available extension options to the extent they have not been exercised as of the date of this filing. The following table is a rollforward of our total allowance for loan losses for the nine months ended September 30, 2020 and the twelve months ended December 31, 2019 (in thousands):
| September 30, 2020 |  | December 31, 2019
Balance at beginning of year | $ | 1,750 |  |  | $ | 5,750 |
Cumulative adjustment upon adoption of ASC 326 | 27,804 |  |  | — |
Current period provision for loan loss | 20,741 |  |  | — |
Write-offs charged against the allowance | (31,285) |  |  | (4,000) |
Balance at end of period | $ | 19,010 |  |  | $ | 1,750 |
At September 30, 2020, all debt and preferred equity investments were performing in accordance with their respective terms, with the exception of two investments with a carrying value, net of reserves, of $25.3 million, as discussed in subnotes 6 and 7 of the Debt Investments table below. At December 31, 2019, all debt and preferred equity investments were performing in accordance with their respective terms. No other financing receivables were 90 days past due at September 30, 2020 and December 31, 2019 with the exception of a $27.7 million financing receivable which was put on nonaccrual in August 2018 as a result of interest default. As of September 30, 2020, management estimated the weighted average risk rating for our debt and preferred equity investments to be 1.4. We have determined that we have one portfolio segment of financing receivables at September 30, 2020 and December 31, 2019 comprising commercial real estate which is primarily recorded in debt and preferred equity investments. Included in other assets is an additional amount of financing receivables representing loans to joint venture partners totaling $110.9 million and $131.1 million at September 30, 2020 and December 31, 2019, respectively, for which the Company recorded adjustments upon adoption of ASC 326 of $11.4 million and provisions for loan losses of $0.0 million and $6.3 million for the three and nine months ended September 30, 2020, respectively. Debt Investments As of September 30, 2020 and December 31, 2019, we held the following debt investments with an aggregate weighted average current yield of 6.26% at September 30, 2020 (dollars in thousands):
Loan Type |  | September 30, 2020 Future Funding Obligations |  | September 30, 2020 Senior Financing |  | September 30, 2020 Carrying Value (1) |  | December 31, 2019 Carrying Value (1) |  | Maturity Date (2)
Fixed Rate Investments: |  |  |  |  |  |  |  |  |  |
Mortgage/Mezzanine Loan |  | $ | — |  |  | $ | 63,750 |  |  | $ | 56,242 |  |  | $ | 55,573 |  |  | October 2020 (3)
Junior Mortgage(4b) |  | 10,000 |  |  | 67,000 |  |  | 32,805 |  |  | — |  |  | January 2021
Loan Type |  | September 30, 2020 Future Funding Obligations |  | September 30, 2020 Senior Financing |  | September 30, 2020 Carrying Value (1) |  | December 31, 2019 Carrying Value (1) |  | Maturity Date (2)
Mezzanine Loan |  | — |  |  | 15,000 |  |  | 3,500 |  |  | 3,500 |  |  | September 2021
Mezzanine Loan |  | — |  |  | 280,000 |  |  | 40,458 |  |  | 38,734 |  |  | August 2022
Mezzanine Loan(5) |  | — |  |  | 348,327 |  |  | 225,204 |  |  | 215,737 |  |  | June 2023
Mezzanine Loan(4a)(6) |  | — |  |  | 115,000 |  |  | 13,265 |  |  | 12,950 |  |  | June 2024
Mezzanine Loan |  | — |  |  | 95,000 |  |  | 30,000 |  |  | 30,000 |  |  | January 2025
Mezzanine Loan |  | — |  |  | 1,712,750 |  |  | 55,250 |  |  | 55,250 |  |  | June 2027
Mezzanine Loan |  | — |  |  | 85,000 |  |  | 20,000 |  |  | 20,000 |  |  | December 2029
Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 24,952 |  |  |
Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 30,000 |  |  |
Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 12,714 |  |  |
Total fixed rate |  | $ | 10,000 |  |  | $ | 2,781,827 |  |  | $ | 476,724 |  |  | $ | 499,410 |  |  |
Floating Rate Investments: |  |  |  |  |  |  |  |  |  |
Junior Mortgage(7) |  | $ | — |  |  | $ | 40,000 |  |  | $ | 20,000 |  |  | $ | 20,000 |  |  | April 2020
Mezzanine Loan |  | — |  |  | 275,000 |  |  | 49,919 |  |  | 49,809 |  |  | April 2021
Junior Mortgage Participation/Mezzanine Loan |  | — |  |  | 60,000 |  |  | 15,724 |  |  | 15,698 |  |  | July 2021
Mezzanine Loan |  | 7,933 |  |  | 169,540 |  |  | 46,613 |  |  | 41,395 |  |  | July 2021
Mezzanine Loan |  | 5,329 |  |  | 54,204 |  |  | 23,753 |  |  | 15,743 |  |  | July 2021
Mezzanine Loan(4c) |  | — |  |  | 1,115,000 |  |  | 126,486 |  |  | 222,775 |  |  | March 2022
Mortgage/Mezzanine Loan |  | 7,425 |  |  | — |  |  | 60,116 |  |  | — |  |  | May 2022
Mortgage/Mezzanine Loan |  | 44,000 |  |  | — |  |  | 13,987 |  |  | 13,918 |  |  | December 2022
Mortgage Loan(8) |  | 35,303 |  |  | 375,241 |  |  | 63,899 |  |  | — |  |  | February 2023
Mezzanine Loan |  | 55,033 |  |  | 59,232 |  |  | 18,587 |  |  | 69,839 |  |  | May 2023
Mortgage/Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 35,386 |  |  |
Mortgage Loan |  | — |  |  | — |  |  | — |  |  | 19,971 |  |  |
Mortgage Loan |  | — |  |  | — |  |  | — |  |  | 106,473 |  |  |
Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 51,387 |  |  |
Mortgage/Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 96,570 |  |  |
Mortgage/Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 82,696 |  |  |
Total floating rate |  | $ | 155,023 |  |  | $ | 2,148,217 |  |  | $ | 439,084 |  |  | $ | 841,660 |  |  |
Allowance for loan loss |  | $ | — |  |  | $ | — |  |  | $ | (19,010) |  |  | $ | — |  |  |
Total |  | $ | 165,023 |  |  | $ | 4,930,044 |  |  | $ | 896,798 |  |  | $ | 1,341,070 |  |  |
(1)Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees. (2)Represents contractual maturity, excluding any unexercised extension options. (3)In October 2020, this loan was extended one year to October 2021. (4)Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $12.0 million, (b) $66.6 million and (c) $0.4 million. (5)This loan is on non-accrual at September 30, 2020. (6)This loan is in default and on non-accrual as of the date of this filing. The Company is in discussions with the borrower. (7)As of September 30, 2020 this loan was in default and on non-accrual. In October 2020, the Company accepted a purchase in lieu of repayment and marked the assets received and liabilities assumed to fair value. (8)This loan was sold on October 1, 2020. Preferred Equity Investments As of September 30, 2020 and December 31, 2019, we held the following preferred equity investments with an aggregate weighted average current yield of 9.98% at September 30, 2020 (dollars in thousands):
Type |  | September 30, 2020 Future Funding Obligations |  | September 30, 2020 Senior Financing |  | September 30, 2020 Carrying Value (1) |  | December 31, 2019 Carrying Value (1) |  | Mandatory Redemption (2)
Preferred Equity |  | $ | — |  |  | $ | 1,712,750 |  |  | $ | 153,196 |  |  | $ | 98,065 |  |  | June 2022
Preferred Equity |  | — |  |  | 250,000 |  |  | 103,369 |  |  | — |  |  | February 2027
Preferred Equity(3) |  | — |  |  | — |  |  | — |  |  | 142,921 |  |  |
Total Preferred Equity |  | $ | — |  |  | $ | 1,962,750 |  |  | $ | 256,565 |  |  | $ | 240,986 |  |  |
Allowance for loan loss |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1,750) |  |  |
Total |  | $ | — |  |  | $ | 1,962,750 |  |  | $ | 256,565 |  |  | $ | 239,236 |  |  |
(1)Carrying value is net of deferred origination fees. (2)Represents contractual maturity, excluding any unexercised extension options. (3)In June 2020, we, along with the common member in the investment, amended the partnership documents related to the investment to provide us with more rights over management of the underlying property. This resulted in the investment being accounted for using the equity method. See Note 6, "Investments in Unconsolidated Joint Ventures."

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration