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Notes Receivable, Net | 3 Months Ended
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Mar. 31, 2023
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):
|  | March 31, |  |  | December 31, |  |  | March 31, 2023
Description |  | 2023 |  |  | 2022 |  |  | Number |  |  | Maturity Date |  | Interest Rate
Core Portfolio (a) |  | $ | 124,801 |  |  | $ | 124,801 |  |  |  | 5 |  |  | Apr 2020 - Dec 2027 |  | 4.65% - 10.00%
Allowance for credit loss |  |  | (834 | ) |  |  | (898 | ) |  |  |  |  |  |  |
Notes receivable, net |  | $ | 123,967 |  |  | $ | 123,903 |  |  |  | 5 |  |  |  |  |
a) Includes one note receivable from an OP Unit holder, with a balance of $6.0 million at March 31, 2023 and December 31, 2022. During the three months ended March 31, 2023, the Company decreased its allowance for credit loss of approximately $0.1 million. The Company also received payment on a bridge loan and funded additional proceeds on a loan to an unconsolidated venture as part of its investments in and advances to unconsolidated affiliates (Note 4). During the year ended December 31, 2022, the Company: • through Fund III obtained the remaining venture partner's interest in an entity that held a property, which was collateral for a note with a balance of $5.3 million, accrued interest of $4.7 million, less credit loss reserve of $4.6 million (exclusive of default interest and other amounts due on the loan that have not been recognized), via a foreclosure auction in January 2022. The entity was previously accounted for as an equity method investment until Fund III acquired the venture partner's interest in a foreclosure auction. Fund III now owns 100% of the entity and consolidates it (Note 4); • originated a new loan to other Fund II investors of $65.9 million in the third quarter, which is presented in redeemable noncontrolling interests on the Company's consolidated balance sheets (Note 10); • funded $7.5 million of a $12.8 million construction loan commitment to an unconsolidated venture, which is presented in investments in and advances to unconsolidated affiliates, net of an allowance for credit loss (Note 4). The loan has a stated interest rate of Prime + 1.00%, matures on December 28, 2023 and is collateralized by the venture members' interest in an entity that holds the 1238 Wisconsin development property; • Fund V made a bridge loan to an unconsolidated venture for $52.0 million during the first quarter, which was repaid during the second quarter. Additionally, Fund V made a bridge loan to an unconsolidated venture for $31.7 million during the third quarter, which is presented in investments in and advances to unconsolidated affiliates, net of an allowance for credit loss. The loan has a stated interest rate of 8.0%, matures on February 6, 2023 and is collateralized by the Shoppes at South Hills property. The loan was repaid during the first quarter of 2023 (Note 4); • received full payment on a $16.0 million Core Portfolio loan during the second quarter, and full payment on a $13.5 million Core Portfolio loan and partial payment of $5.7 million of accrued interest on a Core Portfolio loan during the third quarter; • extended the maturity date of one Core note receivable of $54.0 million from January 13, 2023 t o January 9, 2024; and • decreased its allowance for credit loss by $4.9 million, of which approximately $4.6 million was attributable to the aforementioned Fund III foreclosure. Default 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 March 31, 2023 and December 31, 2022. 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. The Company has determined that the collateral for this loan is sufficient to cover the loan’s carrying value at March 31, 2023 and December 31, 2022. Allowance for Credit Losses 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). Interest receivable is included in Other assets (Note 5). 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, the Company did not elect the collateral-dependent CECL practical expedient for three of its loans with a total amortized cost of $114.5 million, inclusive of accrued interest of $13.5 million, for which an allowance for credit losses has been recorded aggregating $0.8 million at March 31, 2023. For two loans in this portfolio, aggregating $27.9 million, inclusive of accrued interest of $4.1 million at March 31, 2023, the Company has elected to apply the practical expedient in accordance with ASC 326 and did no t establish an allowance for credit losses because (i) these loans are collateral-dependent loans, which due to their settlement term s are not expected to be settled in cash but rather by the Company’s possession of the real estate collateral; and (ii) at March 31, 2023, 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 b e 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 https://asc.fasb.org/subtopic&trid=2196772 + Details
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