XML 37 R22.htm IDEA: XBRL DOCUMENT
v3.24.3

Debt and Preferred Equity Investments | 9 Months Ended
--- | ---
Sep. 30, 2024
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 consolidated debt and preferred equity investments for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023 (in thousands):
| September 30, 2024 |  | December 31, 2023
Balance at beginning of year (1) | $ | 346,745 |  |  | $ | 623,280 |
Debt investment originations/fundings/accretion (2) | 5,334 |  |  | 72,160 |
Preferred equity investment originations/accretion (2) (3) | 6,474 |  |  | 8,142 |
Redemptions/sales/syndications/equity ownership/amortization | (64,629) |  |  | (349,947) |
Net change in loan loss reserves | — |  |  | (6,890) |
Balance at end of period (1) (4) | $ | 293,924 |  |  | $ | 346,745 |
(1)Net of unamortized fees, discounts, and premiums. (2)Accretion includes amortization of fees and discounts and paid-in-kind investment income. (3)Excludes a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet. See Note 6, "Investments in Unconsolidated Joint Ventures." (4)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio. Below is a summary of our consolidated debt and preferred equity investments as of September 30, 2024 (dollars in thousands):
| Floating Rate |  | Fixed Rate |  | Total Carrying Value |  | Senior Financing | Maturity (2)
Type | Carrying Value | Face Value | Interest Rate (1) |  | Carrying Value | Face Value | Interest Rate |  |
Mezzanine Debt | $ | 109,450 |  | $ | 109,604 |  | S + 5.00% - 12.11% |  | $ | 50,000 |  | $ | 50,000 |  | 8.00% - 8.40% |  | $ | 159,450 |  | (3) | $ | 804,021 |  | 2024 - 2029
Preferred Equity (4) | — |  | — |  | — |  | 134,474 |  | 134,474 |  | 6.5% |  | 134,474 |  |  | 250,000 |  | 2027
Balance at end of period | $ | 109,450 |  | $ | 109,604 |  |  |  | $ | 184,474 |  | $ | 184,474 |  |  |  | $ | 293,924 |  |  | $ | 1,054,021 |  |
(1)Floating interest rates are presented with the stated spread over Term SOFR ("S"). (2)Excludes available extension options to the extent they have not been exercised as of the date of this filing. (3)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio. (4)Excludes a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet. See Note 6, "Investments in Unconsolidated Joint Ventures." The following table is a roll forward of our total allowance for loan losses for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023 (in thousands):
| September 30, 2024 |  | December 31, 2023
Balance at beginning of year | $ | 13,520 |  |  | $ | 6,630 |
Current period provision for loan loss | — |  |  | 6,890 |
Balance at end of period (1) | $ | 13,520 |  |  | $ | 13,520 |
(1)As of September 30, 2024, all debt and preferred equity investments on non-accrual had an allowance for loan loss except for one debt investment with a carrying value of $49.8 million, which is included in the Company's alternative strategy portfolio. As of September 30, 2024, two investments that are in the Company's alternative strategy portfolio and have a total carrying value, net of reserves, of $49.8 million were not performing in accordance with their respective terms. As of December 31, 2023, the same two investments with a total carrying value, net of reserves, of $49.8 million were not performing in accordance with their respective terms. This is further discussed in the Debt Investments and Preferred Equity Investments tables below. No other financing receivables were 90 days past due as of September 30, 2024 and December 31, 2023. The following table sets forth the carrying value of our consolidated debt and preferred equity investment portfolio by risk rating as of September 30, 2024 and December 31, 2023 (dollars in thousands):
Risk Rating |  | September 30, 2024 |  | December 31, 2023
1 - Low Risk Assets - Low probability of loss |  | $ | 154,474 |  |  | $ | 210,333 |
2 - Watch List Assets - Higher potential for loss (1) |  | 139,450 |  |  | 136,412 |
3 - High Risk Assets - Loss more likely than not |  | — |  |  | — |
|  | $ | 293,924 |  |  | $ | 346,745 |
(1)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio. The following table sets forth the carrying value of our consolidated debt and preferred equity investment portfolio by year of origination and risk rating as of September 30, 2024 (dollars in thousands):
|  | As of September 30, 2024
Risk Rating |  | 2024 (1) |  | 2023 (1) |  | 2022 (1) |  | Prior (1) |  | Total
1 - Low Risk Assets - Low probability of loss |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 154,474 |  |  | $ | 154,474 |
2 - Watch List Assets - Higher potential for loss |  | — |  |  | — |  |  | — |  |  | 139,450 |  | (2) | 139,450 |
3 - High Risk Assets - Loss more likely than not |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 293,924 |  |  | $ | 293,924 |
(1)Year in which the investment was originated or acquired by us or in which a material modification occurred. (2)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio. We have determined that we have one portfolio segment of financing receivables as of September 30, 2024 and December 31, 2023 comprised of 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 $10.9 million and $8.8 million as of September 30, 2024 and December 31, 2023, respectively. The Company recorded no provisions for loan losses related to these financing receivables for the nine months ended September 30, 2024 and 2023. All of these loans have a risk rating of 2 and were performing in accordance with their respective terms. Debt Investments As of September 30, 2024 and December 31, 2023, we held the following consolidated debt investments with an aggregate weighted average current yield of 6.32% as of September 30, 2024 (dollars in thousands):
Loan Type |  | September 30, 2024 Future Funding Obligations |  | September 30, 2024 Senior Financing |  | September 30, 2024 Carrying Value (1) |  | December 31, 2023 Carrying Value (1) |  | Maturity Date (2)
Fixed Rate Investments: |  |  |  |  |  |  |  |  |  |
Mezzanine Loan (3) (4) (6) |  | $ | — |  |  | $ | 105,000 |  |  | $ | 13,366 |  |  | $ | 13,366 |  |  | October 2024
Mezzanine Loan |  | — |  |  | 95,000 |  |  | 30,000 |  |  | 30,000 |  |  | January 2025
Mezzanine Loan |  | — |  |  | 85,000 |  |  | 20,000 |  |  | 20,000 |  |  | December 2029
Total fixed rate |  | $ | — |  |  | $ | 285,000 |  |  | $ | 63,366 |  |  | $ | 63,366 |  |  |
Floating Rate Investments: |  |  |  |  |  |  |  |  |  |
Mezzanine Loan (5) (6) |  | $ | — |  |  | $ | 275,000 |  |  | $ | 50,000 |  |  | $ | 50,000 |  |  | April 2023
Mezzanine Loan |  | — |  |  | 54,000 |  |  | 8,620 |  |  | 8,243 |  |  | January 2025
Mezzanine Loan |  | 8,099 |  |  | 190,021 |  |  | 50,984 |  |  | 48,323 |  |  | January 2026
Mezzanine Loan |  | — |  |  | — |  |  | — |  |  | 62,333 |  |  | May 2024
Total floating rate |  | $ | 8,099 |  |  | $ | 519,021 |  |  | $ | 109,604 |  |  | $ | 168,899 |  |  |
Allowance for loan loss |  | $ | — |  |  | $ | — |  |  | $ | (13,520) |  |  | $ | (13,520) |  |  |
Total |  | $ | 8,099 |  |  | $ | 804,021 |  |  | $ | 159,450 |  |  | $ | 218,745 |  |  |
(1)Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees. (2)Represents contractual maturity, excluding any extension options to the extent they have not been exercised as of the date of this filing. (3)Carrying value is net of a $12.0 million participation that was sold and did not meet the conditions for sale accounting. That participation is included in Other assets and Other liabilities on the consolidated balance sheets as a result. (4)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of September 30, 2024. No investment income has been recognized subsequent to it being put on non-accrual. In the first quarter of 2023, the Company fully reserved the balance of the investment. Additionally, we determined the borrower entity to be a VIE, in which we are not the primary beneficiary. (5)This loan went into default and was put on non-accrual in January 2023 and remains on non-accrual as of September 30, 2024. No investment income has been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower with respect to the loan. (6)Included in the Company's alternative strategy portfolio. Preferred Equity Investments As of September 30, 2024 and December 31, 2023, we held the following consolidated preferred equity investment with an aggregate weighted average current yield of 6.55% as of September 30, 2024 (dollars in thousands), excluding a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet:
Type |  | September 30, 2024 Future Funding Obligations |  | September 30, 2024 Senior Financing |  | September 30, 2024 Carrying Value (1) |  | December 31, 2023 Carrying Value (1) |  | Mandatory Redemption (2)
Preferred Equity |  | $ | — |  |  | $ | 250,000 |  |  | $ | 134,474 |  |  | $ | 128,000 |  |  | February 2027
Allowance for loan loss |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
Total |  | $ | — |  |  | $ | 250,000 |  |  | $ | 134,474 |  |  | $ | 128,000 |  |  |
(1)Carrying value is net of deferred origination fees. (2)Represents contractual redemption, excluding any unexercised extension options.

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://www.xbrl.org/2009/role/commonPracticeRef -Topic 940 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/940-320/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph b -Publisher SEC Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/320/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481800/320-10-50-10 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6B Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/942-320/tableOfContent + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration