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Loans and Investments (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Structured Business loan and investment portfolio

Our Structured Business loan and investment portfolio consists of ($ in thousands):


								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	June 30, 2020		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)

Bridge loans (4)	$	4,504,232	91	%	234	5.37	%	16.6	1	%	77	%
Preferred equity investments		216,934	4	%	12	8.33	%	53.3	67	%	89	%
Mezzanine loans		170,917	3	%	28	7.78	%	46.9	28	%	78	%
Other (5)		80,055	2	%	20	5.10	%	73.8	0	%	69	%
		4,972,138	100	%	294	5.57	%	20.2	4	%	78	%
Allowance for credit losses		(152,811)
Unearned revenue		(19,151)
Loans and investments, net	$	4,800,176


								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	December 31, 2019		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)
Bridge loans (4)	$	3,836,832	90	%	217	5.77	%	18.0	0	%	75	%
Preferred equity investments		181,058	4	%	10	7.62	%	68.8	69	%	89	%
Mezzanine loans		191,575	4	%	24	9.70	%	36.7	22	%	73	%
Other (5)		70,146	2	%	21	2.88	%	84.8	0	%	70	%
		4,279,611	100	%	272	5.98	%	22.1	4	%	76	%
Allowance for credit losses		(71,069)
Unearned revenue		(18,582)
Loans and investments, net	$	4,189,960

(1)

“Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate that is required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2)	The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(3)	The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

(4)	As of June 30, 2020 and December 31, 2019, bridge loans included 5 and 11, respectively, single-family rental loans with an aggregate UPB of $53.4 million and $66.7 million, respectively, of which $28.3 million and $30.0 million, respectively, was funded.

(5)

As of June 30, 2020 and December 31, 2019, other included 19 and 12, respectively, single-family rental permanent loans with an aggregate UPB of $73.7 million and $41.6 million, respectively, and 1 and 9, respectively, purchased loans with an aggregate UPB of $6.4 million and $28.6 million, respectively.

Summary of the loan portfolio's internal risk ratings and LTV ratios by asset class

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class as of June 30, 2020 is as follows ($ in thousands):


																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2020		2019		2018		2017		2016		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	487,598	$	454,747	$	19,300	$	32,500	$	—	$	905	$	995,050
Pass/Watch		454,466		1,131,309		187,805		173,600		—		28,800		1,975,980
Special Mention		24,925		572,887		160,749		134,300		—		17,080		909,941
Substandard		—		35,379		42,927		17,700		8,250		—		104,256
Total Multifamily	$	966,989	$	2,194,322	$	410,781	$	358,100	$	8,250	$	46,785	$	3,985,227		4	%	77	%
Land:												Percentage of portfolio		80	%
Special Mention	$	71,018	$	19,524	$	—	$	19,975	$	—	$	—	$	110,517
Substandard		—		—		—		—		—		127,928		127,928
Total Land	$	71,018	$	19,524	$	—	$	19,975	$	—	$	127,928	$	238,445		0	%	91	%
Healthcare:												Percentage of portfolio		5	%
Pass	$	—	$	6,600	$	10,000	$	—	$	—	$	—	$	16,600
Pass/Watch		—		14,750		51,500		41,650		—		—		107,900
Special Mention		—		59,569		15,000		—		—		—		74,569
Doubtful		—		—		—		4,625		—		—		4,625
Total Healthcare	$	—	$	80,919	$	76,500	$	46,275	$	—	$	—	$	203,694		0	%	78	%
Student Housing:												Percentage of portfolio		4	%
Special Mention	$	—	$	44,500	$	3,350	$	—	$	—	$	—	$	47,850
Substandard		23,500		—		13,000		67,250		—		—		103,750
Total Student Housing	$	23,500	$	44,500	$	16,350	$	67,250	$	—	$	—	$	151,600		12	%	76	%
Office:												Percentage of portfolio		3	%
Pass	$	—	$	—	$	5,000	$	—	$	—	$	—	$	5,000
Pass/Watch		—		—		—		34,000		—		—		34,000
Special Mention		—		—		—		43,151		—		9,946		53,097
Substandard		—		—		42,799		—		—		—		42,799
Doubtful		—		—		—		—		—		880		880
Total Office	$	—	$	—	$	47,799	$	77,151	$	—	$	10,826	$	135,776		3	%	76	%
Single-Family Rental:												Percentage of portfolio		3	%
Pass	$	8,565	$	34,607	$	—	$	—	$	—	$	—	$	43,172
Pass/Watch		104		34,753		—		—		—		—		34,857
Special Mention		23,773		161		—		—		—		—		23,934
Total Single-Family Rental	$	32,442	$	69,521	$	—	$	—	$	—	$	—	$	101,963		0	%	75	%
Hotel:												Percentage of portfolio		2	%
Substandard	$	—	$	91,000	$	—	$	—	$	—	$	—	$	91,000
Total Hotel	$	—	$	91,000	$	—	$	—	$	—	$	—	$	91,000		32	%	91	%
Other:												Percentage of portfolio		2	%
Pass	$	—	$	4,000	$	—	$	—	$	—	$	—	$	4,000
Pass/Watch		—		—		9,000		13,580		—		—		22,580
Substandard		—		—		32,600		—		—		3,553		36,153
Doubtful		—		—		—		—		—		1,700		1,700
Total Other	$	—	$	4,000	$	41,600	$	13,580	$	—	$	5,253	$	64,433		7	%	79	%
												Percentage of portfolio		1	%

Grand Total	$	1,093,949	$	2,503,786	$	593,030	$	582,331	$	8,250	$	190,792	$	4,972,138		4	%	78	%

Summary of the changes in the allowance for credit losses for our loan portfolio

A summary of the changes in the allowance for credit losses is as follows (in thousands):


	Three Months Ended June 30, 2020
	Land		Multifamily		Retail		Office		Hotel		Student Housing		Healthcare		Other		Total
Allowance for credit losses:
Beginning balance	$	78,418	$	31,891	$	11,322	$	6,096	$	7,528	$	1,142	$	3,934	$	1,921	$	142,252
Provision for credit losses (net of recoveries)		(324)		2,715		2,659		2,436		144		2,968		(4)		(35)		10,559
Charge-offs		—		—		—		—		—				—		—		—
Recoveries of reserves		—		—		—		—		—				—		—		—
Ending balance	$	78,094	$	34,606	$	13,981	$	8,532	$	7,672	$	4,110	$	3,930	$	1,886	$	152,811


	Three Months Ended June 30, 2019
Allowance for credit losses	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069


	Six Months Ended June 30, 2020
Allowance for credit losses:
Beginning balance, prior to adoption of CECL	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069
Impact of adopting CECL - January 1, 2020		77		16,322		335		287		29		68		64		112		17,294
Provision for credit losses (net of recoveries)		10,148		18,284		13,646		6,745		7,643		4,042		3,866		74		64,448
Charge-offs		—		—		—		—		—		—		—		—		—
Recoveries of reserves		—		—		—		—		—		—		—		—		—
Ending balance	$	78,094	$	34,606	$	13,981	$	8,532	$	7,672	$	4,110	$	3,930	$	1,886	$	152,811

	Six Months Ended June 30, 2019
Allowance for credit losses	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069

Summary of our loans considered impaired by asset class


	June 30, 2020
							Wtd. Avg. First			Wtd. Avg. Last
			Carrying		Allowance for		Dollar LTV			Dollar LTV
Asset Class	UPB (1)		Value		Credit Losses		Ratio			Ratio
Land	$	134,215	$	127,168	$	77,869		0	%		97	%
Hotel		50,000		49,691		7,500		59	%		100	%
Retail		36,154		35,221		13,926		9	%		99	%
Healthcare		4,625		4,730		3,845		0	%		89	%
Office		2,196		2,196		1,500		0	%		75	%
Commercial		1,700		1,700		1,700		63	%		63	%
Total	$	228,890	$	220,706	$	106,340		14	%		98	%


	December 31, 2019
Land	$	134,215	$	126,800	$	67,869	0	%	97	%
Office		2,226		2,226		1,500	0	%	78	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	138,141	$	130,726	$	71,069	1	%	96	%

(1)	Represents the UPB of ten and five impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at June 30, 2020 and December 31, 2019, respectively.

Summary of our non-performing loans by asset class

A summary of our non-performing loans by asset class is as follows (in thousands):


	June 30, 2020						December 31, 2019
			Less Than		Greater Than				Less Than		Greater Than
			90 Days		90 Days				90 Days		90 Days
	UPB		Past Due		Past Due		UPB		Past Due		Past Due
Hotel	$	50,000	$	50,000	$	—	$	—	$	—	$	—
Healthcare		4,625		—		4,625		—		—		—
Retail		3,553		—		3,553		1,000		—		1,000
Commercial		1,700		—		1,700		1,700		—		1,700
Office		880		—		880		880		—		880
Total	$	60,758	$	50,000	$	10,758	$	3,580	$	—	$	3,580