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Loans and Investments (Tables)

6 Months Ended

Jun. 30, 2021

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, 2021		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)

Bridge loans (4)	$	6,907,594	94	%	360	4.75	%	18.6	0	%	75	%
Preferred equity investments		224,814	3	%	14	6.39	%	44.7	64	%	90	%
Mezzanine loans		224,107	3	%	29	6.61	%	36.2	27	%	83	%
Other loans (5)		29,414	<1	%	2	4.63	%	54.2	0	%	69	%
		7,385,929	100	%	405	4.85	%	20.1	3	%	76	%
Allowance for credit losses		(138,447)
Unearned revenue		(33,567)
Loans and investments, net	$	7,213,915


	December 31, 2020
Bridge loans (4)	$	5,022,509	92	%	263	5.09	%	16.2	0	%	76	%
Preferred equity investments		224,928	4	%	14	7.07	%	49.8	64	%	89	%
Mezzanine loans		159,242	3	%	29	7.40	%	45.0	32	%	82	%
Other loans (5)		68,403	1	%	22	4.95	%	74.8	0	%	69	%
		5,475,082	100	%	328	5.23	%	19.2	4	%	77	%
Allowance for credit losses		(148,329)
Unearned revenue		(40,885)
Loans and investments, net	$	5,285,868

(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 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, 2021 and December 31, 2020, bridge loans included 77 and 38, respectively, SFR loans with an aggregate UPB of $533.9 million and $309.2 million, respectively, of which $191.5 million and $88.1 million, respectively, was funded.

(5)	As of June 30, 2021, other loans included 2 variable rate SFR permanent loans and as of December 31, 2020, other loans included 22 SFR permanent loans.

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, 2021 is as follows ($ in thousands):


																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2021		2020		2019		2018		2017		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	1,852,008	$	753,955	$	44,035	$	—	$	—	$	335	$	2,650,333
Pass/Watch		699,139		817,032		468,975		121,555		36,000		29,150		2,171,851
Special Mention		50,537		415,935		697,673		111,483		98,138		—		1,373,766
Substandard		—		18,840		120,530		16,925		16,500		8,250		181,045
Doubtful		—		—		—		—		17,700		—		17,700
Total Multifamily	$	2,601,684	$	2,005,762	$	1,331,213	$	249,963	$	168,338	$	37,735	$	6,394,695		3	%	76	%
Land:												Percentage of portfolio		87	%
Special Mention	$	—	$	8,100	$	—	$	—	$	—	$	—	$	8,100
Substandard		—		71,018		19,523		—		19,975		127,928		238,444
Total Land	$	—	$	79,118	$	19,523	$	—	$	19,975	$	127,928	$	246,544		0	%	94	%
Single-Family Rental:												Percentage of portfolio		3	%
Pass	$	37,023	$	8,375	$	31,812	$	—	$	—	$	—	$	77,210
Pass/Watch		78,882		47,650		8,243		—		—		—		134,775
Special Mention		2,228		6,732		—		—		—		—		8,960
Total Single-Family Rental	$	118,133	$	62,757	$	40,055	$	—	$	—	$	—	$	220,945		0	%	63	%
Healthcare:												Percentage of portfolio		3	%
Pass	$	—	$	—	$	6,600	$	—	$	—	$	—	$	6,600
Pass/Watch		—		—		—		26,850		—		—		26,850
Special Mention		—		—		65,819		14,650		39,650		—		120,119
Doubtful		—		—		—		—		4,625		—		4,625
Total Healthcare	$	—	$	—	$	72,419	$	41,500	$	44,275	$	—	$	158,194		0	%	75	%
Office:												Percentage of portfolio		2	%
Special Mention	$	—	$	35,410	$	—	$	42,799	$	43,151	$	9,636	$	130,996
Doubtful		—		—		—		—		—		880		880
Total Office	$	—	$	35,410	$	—	$	42,799	$	43,151	$	10,516	$	131,876		0	%	82	%
Student Housing:												Percentage of portfolio		2	%
Pass	$	25,700	$	—	$	—	$	—	$	—	$	—	$	25,700
Pass/Watch		—		—		31,100		—		—		—		31,100
Substandard		—		23,500		—		13,000		24,050		—		60,550
Total Student Housing	$	25,700	$	23,500	$	31,100	$	13,000	$	24,050	$	—	$	117,350		15	%	74	%
Hotel:												Percentage of portfolio		2	%
Pass/Watch	$	—	$	26,000	$	—	$	—	$	—	$	—	$	26,000
Special Mention		—		—		41,000		—		—		—		41,000
Total Hotel	$	—	$	26,000	$	41,000	$	—	$	—	$	—	$	67,000		0	%	85	%
Retail:												Percentage of portfolio		1	%
Pass	$	—	$	—	$	4,000	$	—	$	—	$	—	$	4,000
Special Mention		—		—		—		26,600		—		—		26,600
Substandard		—		—		—		—		—		3,445		3,445
Total Retail	$	—	$	—	$	4,000	$	26,600	$	—	$	3,445	$	34,045		9	%	72	%
Other:												Percentage of portfolio		< 1	%
Pass	$	—	$	—	$	—	$	—	$	13,580	$	—	$	13,580
Doubtful		—		—		—		—		—		1,700		1,700
Total Other	$	—	$	—	$	—	$	—	$	13,580	$	1,700	$	15,280		7	%	53	%
												Percentage of portfolio		< 1	%

Grand Total	$	2,745,517	$	2,232,547	$	1,539,310	$	373,862	$	313,369	$	181,324	$	7,385,929		3	%	76	%

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, 2021
	Land		Multifamily		Retail		Office		Healthcare		Student Housing		Hotel		Other		Total
Allowance for credit losses:
Beginning balance	$	78,096	$	30,029	$	13,848	$	8,051	$	3,872	$	3,498	$	7,754	$	2,152	$	147,300
Provision for credit losses (net of recoveries)		(39)		131		(29)		(229)		(6)		(1,133)		(7,529)		(19)		(8,853)
Ending balance	$	78,057	$	30,160	$	13,819	$	7,822	$	3,866	$	2,365	$	225	$	2,133	$	138,447


	Three Months Ended June 30, 2020
Allowance for credit losses:
Beginning balance	$	78,418	$	31,891	$	11,322	$	6,096	$	3,934	$	1,142	$	7,528	$	1,921	$	142,252
Provision for credit losses (net of recoveries)		(324)		2,715		2,659		2,436		(4)		2,968		144		(35)		10,559
Ending balance	$	78,094	$	34,606	$	13,981	$	8,532	$	3,930	$	4,110	$	7,672	$	1,886	$	152,811


	Six Months Ended June 30, 2021
Allowance for credit losses:
Beginning balance	$	78,150	$	36,468	$	13,861	$	1,846	$	3,880	$	4,078	$	7,759	$	2,287	$	148,329
Provision for credit losses (net of recoveries)		(93)		(6,308)		(42)		5,976		(14)		(1,713)		(7,534)		(154)		(9,882)
Ending balance	$	78,057	$	30,160	$	13,819	$	7,822	$	3,866	$	2,365	$	225	$	2,133	$	138,447


	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		64		68		29		112		17,294
Provision for credit losses (net of recoveries)		10,148		18,284		13,646		6,745		3,866		4,042		7,643		74		64,448
Ending balance	$	78,094	$	34,606	$	13,981	$	8,532	$	3,930	$	4,110	$	7,672	$	1,886	$	152,811

Summary of our loans considered impaired by asset class


	June 30, 2021
							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	$	127,829	$	77,868	0	%	99	%
Retail		30,045		29,328		13,818	10	%	77	%
Healthcare		4,625		4,673		3,845	0	%	83	%
Office		2,136		2,136		1,500	0	%	68	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	172,721	$	165,666	$	98,731	2	%	94	%


	December 31, 2020
Land	$	134,215	$	127,829	$	77,869	0	%	99	%
Hotel		110,000		89,613		7,500	0	%	94	%
Retail		30,079		28,957		13,851	10	%	75	%
Healthcare		4,625		4,673		3,845	0	%	83	%
Office		2,166		2,166		1,500	0	%	71	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	282,785	$	254,938	$	106,265	1	%	94	%

(1)	Represents the UPB of nine and ten impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at June 30, 2021 and December 31, 2020, 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, 2021						December 31, 2020
			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
Student Housing	$	60,550	$	—	$	60,550	$	36,500	$	—	$	36,500
Multifamily		17,700		—		17,700		17,700		—		17,700
Healthcare		4,625		—		4,625		4,625		—		4,625
Commercial		1,700		—		1,700		1,700		—		1,700
Retail		920		—		920		920		—		920
Office		880		—		880		880		—		880
Total	$	86,375	$	—	$	86,375	$	62,325	$	—	$	62,325