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Investments in Equity Affiliates | 12 Months Ended
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Dec. 31, 2019
Investments in Equity Affiliates |
Investments in Equity Affiliates | Note 8—Investments in Equity Affiliates We account for all investments in equity affiliates under the equity method. A summary of our investments in equity affiliates is as follows (in thousands):
|  | Investments in Equity Affiliates at |  | UPB of Loans to
|  | December 31, |  | December 31, |  | Equity Affiliates at
Equity Affiliates |  | 2019 |  | 2018 |  | December 31, 2019
Arbor Residential Investor LLC |  | $ | 26,520 |  | $ | 19,260 |  | $ | —
AMAC Holdings III LLC |  |  | 10,520 |  |  | — |  |  | 15,600
North Vermont Avenue |  |  | 2,440 |  |  | — |  |  | —
Lightstone Value Plus REIT L.P |  |  | 1,895 |  |  | 1,895 |  |  | —
JT Prime |  |  | 425 |  |  | 425 |  |  | —
West Shore Café |  |  | — |  |  | — |  |  | 1,688
Lexford Portfolio |  |  | — |  |  | — |  |  | 30,470
East River Portfolio |  |  | — |  |  | — |  |  | —
Total |  | $ | 41,800 |  | $ | 21,580 |  | $ | 47,758
Arbor Residential Investor LLC (“ARI”). In 2015, we invested $9.6 million for 50% of our Former Manager’s indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business. As a result of this transaction, we had an initial indirect interest of 22.5% in the mortgage banking business, which was subject to dilution upon attaining certain profit hurdles of the business, and at December 31, 2019, our indirect interest was 16.3%. During 2019, 2018 and 2017, we recorded income of $7.2 million, income of $0.7 million and a loss of $7.3 million, respectively, to income (loss) from equity affiliates in the consolidated statements of income related to this investment. The loss in 2017 included a $5.5 million charge for our proportionate share of a litigation settlement that was paid. During 2018, we made a $2.4 million payment for our proportionate share of the litigation settlement, which was distributed back to us by our equity affiliate. In 2015, we invested $1.7 million through ARI for a 50% noncontrolling interest in a joint venture that invests in non-qualified residential mortgages purchased from the mortgage banking business’s origination platform. During 2018 and 2017, we received cash distributions totaling $0.7 million and $3.2 million, respectively, as a result of the joint venture selling most of its mortgage assets, which were classified as returns of capital. The income (loss) associated with this investment for all periods presented was de minimis. At December 31, 2019, our basis in this investment was zero. AMAC Holdings III LLC (“AMAC III”). In the first quarter of 2019, we committed to a $30.0 million investment (of which $10.9 million was funded as of December 31, 2019) for an 18% interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members. We received a $0.2 million cash distribution, which was classified as a return of capital, related to this investment. The loss associated with this investment for 2019 was de minimis. North Vermont Avenue. In the fourth quarter of 2019, we invested $2.4 million for an initial 85% noncontrolling interest in a joint venture that acquired three parcels of land, which currently has three residential structures, a commercial structure and a parking lot. The joint venture intends to tear down the existing structures and construct a new 206 unit multifamily complex with ground floor retail. Lightstone Value Plus REIT L.P. / JT Prime. We own a $1.9 million interest in an unconsolidated joint venture that holds common operating partnership units of Lightstone Value Plus REIT L.P. (“Lightstone”). We also own a 50% noncontrolling interest in an unconsolidated joint venture, JT Prime, which holds common operating partnership units of Lightstone at a carrying value of $0.4 million. The income associated with these investments for all periods presented was de minimis. West Shore Café. We own a 50% noncontrolling interest in the West Shore Lake Café, a restaurant/inn lakefront property in Lake Tahoe, California. We provided a $1.7 million first mortgage loan to an affiliated entity to acquire property adjacent to the original property, which is scheduled to mature in March 2020 and bears interest at LIBOR plus 4.0%. During 2018, we determined that this investment exhibited indicators of impairment and, as a result of an impairment analysis performed; we recorded an other-than-temporary impairment of $2.2 million for the full carrying amount of this investment, which was recorded in income (loss) from equity affiliates in the consolidated statements of income. Also during 2018, we recorded a provision for loan loss of $1.7 million, fully reserving the first mortgage loan. Lexford Portfolio. We own a $44,000 noncontrolling equity interest in Lexford, a portfolio of multifamily assets. In 2019, 2018 and 2017, we received distributions from this equity investment and recognized income totaling $3.5 million, $2.5 million and $2.5 million, net of expenses, respectively. East River Portfolio. We invested $0.1 million for a 5% interest in a joint venture that owns two multifamily properties. The joint venture is comprised of a consortium of investors (which includes, among other unaffiliated investors, certain of our officers, our chief executive officer and certain other related parties) who together own an interest of 95%. We originated a $1.7 million bridge loan to the joint venture with an interest rate of 5.5% over LIBOR that was repaid in full during 2017. The losses associated with this investment for all periods presented was de minimis. Equity Participation Interest. During 2017, we received $1.5 million from the redemption of a 25% equity participation interest we held in a multifamily property, which is included in income (loss) from equity affiliates in our consolidated statements of income. Our basis in this investment was zero prior to this transaction. See Note 19 for details of certain investments described above.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SX 210.3A-04) -URI http://asc.fasb.org/extlink&oid=116822174&loc=d3e355119-122828 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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