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Notes Receivable, Net | 9 Months Ended
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Sep. 30, 2021
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] |
Notes Receivable, Net | 3. Notes Re ceivable, Net The Company’s notes receivable, net are generally collateralized either by the underlying properties or the borrowers’ ownership interests in the entities that own the properties, and were as follows (dollars in thousands):
|  | September 30, |  |  | December 31, |  |  | September 30, 2021
Description |  | 2021 |  |  | 2020 |  |  | Number |  |  | Maturity Date |  | Interest Rate
Core Portfolio (a) |  | $ | 154,332 |  |  | $ | 96,794 |  |  |  | 7 |  |  | Apr 2020 - Dec 2027 |  | 5.00% - 12.00%
Fund III |  |  | 5,306 |  |  |  | 5,306 |  |  |  | 1 |  |  | Jul 2020 |  | 18.00%
Total notes receivable |  |  | 159,638 |  |  |  | 102,100 |  |  |  |  |  |  |  |
Allowance for credit loss |  |  | (1,170 | ) |  |  | (650 | ) |  |  |  |  |  |  |
Notes receivable, net |  | $ | 158,468 |  |  | $ | 101,450 |  |  |  | 8 |  |  |  |  |
a) Includes one and two notes receivable from OP Unit holders, with balances totaling $6.0 million and $6.5 million at September 30, 2021 and December 31, 2020, respectively. During the nine months ended September 30, 2021, the Company:  originated a new Core Portfolio note for $16.0 million with a stated interest rate of 9% and a maturity date of October 20, 2022 collateralized by a single tenant property in Silver Spring, Maryland on April 20, 2021;  exchanged 21,109 OP Units in settlement of a note receivable in the amount of $0.5 million on July 12, 2021 (Note 10);  originated a new Core Portfolio note for $43.0 million, of which $42.0 million was funded, with three tranches with stated interest rates ranging from 5% to 12% and a maturity date of September 17, 2024 collateralized by a retail condominium in Soho, New York on September 17, 2021;  recorded an increase in its allowance for credit loss of approximately $0.5 million primarily attributable to the new loan discussed above. During the year ended December 31, 2020, the Company:  exchanged its Brandywine Note Receivable of $38.7 million plus accrued interest of $2.0 million for the remaining 24.78% undivided interest in Town Center on April 1, 2020 (Note 4);  recorded credit loss reserves of $0.4 million upon the adoption of ASC 326;  converted $33.8 million balance of a Fund II note receivable for interest in real estate on November 2, 2020 (Note 2). Prior to the exchange, the note had been increased by the interest accrued during 2020 of $0.6 million;  made a Core loan for $54.0 million with an interest rate of 9% structured as a redeemable preferred equity investment in a property at 850 Third Avenue in Brooklyn, New York on January 14, 2020;  originated a new Core Portfolio note for $5.0 million with an interest rate of 8% collateralized by our partner’s 50% share of the LUF (Georgetown) Portfolio (Note 4) in Washington, D.C. effective February 1, 2020; and  recorded additional credit loss reserves of $0.3 million related to new transactions and recent market volatility. One Core Portfolio note aggregating $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized) was in default at September 30, 2021 and December 31, 2020. On April 1, 2020, the loan matured and was not repaid. The Company expects to take appropriate actions to recover the amounts due under the loan, and has issued a reservation of rights letter to the borrowers and guarantor, reserving all of its rights and remedies under the applicable loan documents and otherwise. In addition, one Fund III note receivable aggregating $10.0 million, including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized) matured on July 1, 2020 and was not repaid. The Company has issued the borrower a notice of maturity default. The Company has determined for each of these loans that the collateral is sufficient to cover the loan’s carrying value at September 30, 2021. In addition, there are certain personal guarantees associated with each of these notes receivable. The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company’s loan in relation to other debt secured by the collateral and the prospects of the borrower. Earnings from these notes and mortgages receivable are reported within the Company’s Structured Financing segment (Note 12). The Company’s estimated allowance for credit losses related to its Structured Financing segment has been computed for its amortized cost basis in the portfolio, including accrued interest (Note 5), factoring historical loss experience in the United States for similar loans, as adjusted for current conditions, as well as the Company’s expectations related to future economic conditions. Due to the lack of comparability across the Structured Financing portfolio, each loan was evaluated separately. As a result, there were five non-collateral-dependent loans with a total amortized cost of $140.9 million, inclusive of accrued interest of $10.4 million, for which an allowance for credit losses has been recorded aggregating $1.2 million at September 30, 2021. For three loans in this portfolio, aggregating $37.9 million, inclusive of accrued interest of $8.8 million at September 30, 2021, the Company has elected to apply a practical expedient in accordance with ASC 326 and did not establish an allowance for credit losses because (i) these loans are collateral-dependent loans, which due to their settlement terms are not expected to be settled in cash but rather by the Company’s possession of the real estate collateral; and (ii) at September 30, 2021, the Company determined that the estimated fair value of the collateral at the expected realization date for these loans was sufficient to cover the carrying value of its investments in these notes receivable. Impairment charges may be required if and when such amounts are estimated to be nonrecoverable upon a realization event, which is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold; however, non-recoverability may also be concluded if it is reasonably certain that all amounts due will not be collected.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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