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Receivables, Loans, Notes Receivable, and Others | 6 Months Ended
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Jun. 30, 2024
Receivables [Abstract] |
Financing Receivables | Investment in Mortgage Notes and Notes Receivable The Company measures expected credit losses on its mortgage notes and notes receivable on an individual basis because its financial instruments do not have similar risk characteristics. The Company uses a forward-looking commercial real estate loss forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan-by-loan basis. As of June 30, 2024, the Company did not anticipate any prepayments. Therefore, the contractual terms of its mortgage notes and notes receivable were used for the calculation of the expected credit losses. The Company updates the model inputs at each reporting period to reflect, if applicable, any newly originated loans, changes to loan specific information on existing loans and current macroeconomic conditions. The CECL allowance is a valuation account that is deducted from the related mortgage note or note receivable. Effective January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. Certain of the Company’s mortgage notes and notes receivable include commitments to fund future incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The allowance related to future funding is recorded as a liability and is included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets. Investment in mortgage notes, including related accrued interest receivable, was $593.1 million and $569.8 million at June 30, 2024 and December 31, 2023, respectively. Investment in notes receivable, including related accrued interest receivable, w as $3.9 million at both June 30, 2024 and December 31, 2023, and is included in "Other assets" in the accompanying consolidated balance sheets. At June 30, 2024, one of the Company's mortgage notes receivable and two of the Company's notes receivable are considered collateral-dependent and expected credit losses are based on the fair value of the underlying collateral at the reporting date. The Company assessed the fair value of the collateral as of June 30, 2024 on the mortgage note receivable and the notes receivable. The mortgage note receivable has a carrying amount at June 30, 2024 of approximately $10.4 million net of an allowance for credit loss totaling $0.4 million. The two notes receivable remain fully reserved with an allowance for credit loss totaling $7.6 million and $1.9 million, respectively, which represents the outstanding principal balances of the notes as of June 30, 2024. Income from these borrowers is recognized on a cash basis. During the six months ended June 30, 2024 and 2023, the Company received cash basis interest payments of $0.4 million for each period from the mortgage note receivable borrower and $0.4 million for each period from one of the note receivable borrowers. At June 30, 2024, the Company's investment in one of the notes receivable was a variable interest investment and the underlying entity is a VIE. The Company is not the primary beneficiary of this VIE because the Company does not individually have the power to direct the activities that are most significant to the entity and, accordingly, this investment is not consolidated. The Company's maximum exposure to loss associated with this VIE is limited to the Company's outstanding note receivable in the amount of $7.6 million, which is fully reserved in the allowance for credit losses at June 30, 2024. The following summarizes the activity within the allowance for credit losses related to mortgage notes, unfunded commitments and n otes receivable for the six months ended June 30, 2024 (in thousands):
| Mortgage notes receivable | Unfunded commitments - mortgage notes receivable | Notes receivable | Unfunded commitments - notes receivable | Total
Allowance for credit losses at December 31, 2023 | $ | 3,656 |  | $ | 1,072 |  | $ | 9,687 |  | $ | — |  | $ | 14,415 |
Provision (benefit) for credit losses, net | 2,742 |  | 500 |  | (101) |  | — |  | 3,141 |
Charge-offs | — |  | — |  | — |  | — |  | — |
Recoveries | — |  | — |  | — |  | — |  | — |
Allowance for credit losses at June 30, 2024 | $ | 6,398 |  | $ | 1,572 |  | $ | 9,586 |  | $ | — |  | $ | 17,556 |

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