10-K 1 star-12312018x10k.htm 10-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________
FORM 10-K

(Mark One) |
ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
OR
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 1-15371
_______________________________________________________________________________
iStar Inc.
(Exact name of registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or organization) |  | 95-6881527 (I.R.S. Employer Identification Number)
1114 Avenue of the Americas, 39 th Floor New York, NY (Address of principal executive offices) |  | 10036 (Zip code)

Registrant's telephone number, including area code: (212) 930-9400
_______________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:

Title of each class: |  | Name of Exchange on which registered:
Common Stock, $0.001 par value |  | New York Stock Exchange
8.00% Series D Cumulative Redeemable Preferred Stock, $0.001 par value |  | New York Stock Exchange
7.65% Series G Cumulative Redeemable Preferred Stock, $0.001 par value |  | New York Stock Exchange
7.50% Series I Cumulative Redeemable Preferred Stock, $0.001 par value |  | New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

Title of each class: |  | Name of Exchange on which registered:
4.50% Series J Convertible Perpetual Preferred Stock, $0.001 par value |  | N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

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Indicate by check mark whether the registrant: (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports); and (ii) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý |  | Accelerated filer o |  | Non-accelerated filer o |  | Smaller reporting company o |  | Emerging growth company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
As of June 30, 2018 the aggregate market value of iStar Inc. common stock, $0.001 par value per share, held by non-affiliates (1) of the registrant was approximately $698.1 million, based upon the closing price of $10.79 on the New York Stock Exchange composite tape on such date.
As of February 22, 2019, there were 68,158,151 shares of common stock outstanding.

(1) | For purposes of this Annual Report only, includes all outstanding common stock other than common stock held directly by the registrant's directors and executive officers.

DOCUMENTS INCORPORATED BY REFERENCE

1. | Portions of the registrant's definitive proxy statement for the registrant's 2019 Annual Meeting, to be filed within 120 days after the close of the registrant's fiscal year, are incorporated by reference into Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS

|  | Page
PART I |  | 1
Item 1. | Business | 1
Item 1a. | Risk Factors | 5
Item 1b. | Unresolved Staff Comments | 18
Item 2. | Properties | 18
Item 3. | Legal Proceedings | 18
Item 4. | Mine Safety Disclosures | 18
PART II |  | 19
Item 5. | Market for Registrant's Equity and Related Share Matters | 19
Item 6. | Selected Financial Data | 20
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 22
Item 7a. | Quantitative and Qualitative Disclosures about Market Risk | 53
Item 8. | Financial Statements and Supplemental Data | 54
Item 9. | Changes and Disagreements with Registered Public Accounting Firm on Accounting and Financial Disclosure | 130
Item 9a. | Controls and Procedures | 130
Item 9b. | Other Information | 130
PART III |  | 131
Item 10. | Directors, Executive Officers and Corporate Governance of the Registrant | 131
Item 11. | Executive Compensation | 131
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 131
Item 13. | Certain Relationships, Related Transactions and Director Independence | 131
Item 14. | Principal Registered Public Accounting Firm Fees and Services | 131
PART IV |  | 131
Item 15. | Exhibits, Financial Statement Schedules and Reports on Form 8-K | 131
Item 16. | Form10-K Summary | 134
SIGNATURES |

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PART I
Item 1. Business
Explanatory Note for Purposes of the "Safe Harbor Provisions" of Section 21E of the Securities Exchange Act of 1934, as amended
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are included with respect to, among other things, iStar Inc.'s current business plan, business strategy, portfolio management, prospects and liquidity. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results or outcomes to differ materially from those contained in the forward-looking statements. Important factors that iStar Inc. believes might cause such differences are discussed in the section entitled, "Risk Factors" in Part I, Item 1a of this Form 10-K or otherwise accompany the forward-looking statements contained in this Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In assessing all forward-looking statements, readers are urged to read carefully all cautionary statements contained in this Form 10-K.
Overview
iStar Inc. (references to the "Company," "we," "us" or "our" refer to iStar Inc.) finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. The Company also manages entities focused on ground lease ("Ground Lease") and net lease investments. The Company has invested approximately $40 billion over the past two decades and is structured as a real estate investment trust ("REIT") with a diversified portfolio focused on larger assets located in major metropolitan markets. The Company's primary reportable business segments are real estate finance, net lease, operating properties and land and development.
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As of December 31, 2018, based on our gross book value, including the carrying value of our equity method investments exclusive of accumulated depreciation, our total investment portfolio has the following characteristics:
Real Estate Finance: The real estate finance portfolio is comprised of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate and are structured to meet the specific financing needs of borrowers. The Company's portfolio also includes leasehold loans, preferred equity investments and senior and subordinated loans to business entities and may be either secured or unsecured. The Company's loan portfolio includes whole loans and loan participations.
Net Lease: The net lease portfolio includes the Company's net lease and Ground Lease investment strategies, both of which offer stable long-term cash flows. We own net lease properties directly and through ventures that we manage. We operate our Ground Lease investment strategy primarily through Safety, Income & Growth Inc. ("SAFE"), a publicly traded REIT focused exclusively on Ground Leases that we launched in 2017 and manage pursuant to a management agreement. As of December 31, 2018, we owned approximately 41.8% of SAFE's outstanding common stock. On January 2, 2019, we made an additional significant, direct equity investment in SAFE (refer to "Item 7. Management's Discussion and Analysis - Our Portfolio"). After giving effect to the additional investment, we hold approximately 65.5% of SAFE's fully diluted equity. We also directly participate in Ground Leases by offering leasehold loans to SAFE's tenants.
Operating Properties: The operating properties portfolio is comprised of commercial and residential properties, which represent a pool of assets across a broad range of geographies and property types. The Company generally seeks to reposition or redevelop its transitional properties with the objective of maximizing their value through the infusion of capital and/or concentrated asset management efforts. The commercial properties within this portfolio include office, retail, hotel and other property types. The residential properties within this portfolio are generally luxury condominium projects located in major U.S. cities where the Company's strategy is to sell individual condominium units through retail distribution channels.
Land & Development: The land and development portfolio is primarily comprised of land entitled for master planned communities and waterfront and urban infill land parcels located throughout the United States. Master planned communities represent large-scale residential projects that the Company will entitle, plan and/or develop and may sell through retail channels to homebuilders or in bulk ("MPCs"). The communities also typically have a smaller portion of their land reserved for future commercial development. Waterfront parcels are generally entitled for residential projects and urban infill parcels are generally entitled for mixed-use projects. The Company may develop these properties itself, or in partnership with commercial real estate developers, or may sell the properties.
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The Company's primary sources of revenues are operating lease income, which is comprised of the rent and reimbursements that tenants pay to lease the Company's properties, interest income, which is the interest that borrowers pay on loans, and land development revenue from lot and parcel sales. The Company primarily generates income through a “spread” or “margin,” which is the difference between the revenues net of property related expenses generated from leases and loans and interest expense. In addition, the Company generates income from sales of its real estate and income from equity in earnings of its unconsolidated ventures.
Investment Strategy
Throughout our more than 20-year history, we have focused on providing capital to the commercial real estate sector in a differentiated way that emphasizes custom-tailored solutions over commoditized products. We have adjusted the allocation of our capital and resources from time to time based on market conditions. Our Ground Lease strategy is the most recent example of our historical approach. We believe that investment and financing opportunities in the Ground Lease sector currently offer more attractive risk adjusted returns than other investment opportunities, and should enable us to benefit from the unique insights and competitive advantages we have gained through the launch of SAFE.
In originating new investments, the Company's strategy is to focus on the following:

• | Targeting custom-tailored opportunities where customers require flexible financial solutions and "one-call" responsiveness, such as a joint offering of a SAFE Ground Lease and an iStar leasehold loan;

• | Acquiring a fee simple interest in a commercial property that we intend to bifurcate into a SAFE Ground Lease to be acquired by SAFE and a leasehold interest which we may sell or hold for investment;

• | Avoiding commodity businesses where there is significant direct competition from other providers of capital;

• | Developing direct relationships with borrowers and corporate customers in addition to sourcing transactions through intermediaries;

• | Adding value beyond simply providing capital by offering borrowers and corporate customers specific lending expertise, flexibility, certainty of closing and continuing relationships beyond the closing of a particular financing transaction;

• | Taking advantage of market anomalies in the real estate financing markets when, in the Company's view, credit is mispriced by other providers of capital; and

• | Evaluating relative risk adjusted returns across multiple investment markets.

We have been actively seeking to reduce the level of our "legacy assets," which refer primarily to properties that we took back from defaulting borrowers in the financial crisis. In 2018, we reduced that portfolio from 35% of our gross book value to 20%. Under the guidance of a new President of Land and Development hired in 2018, we intend to accelerate the monetization of certain legacy assets, including several larger assets, in order to allow us to focus more capital and resources on new investments, particularly in the Ground Lease business.
Financing Strategy
The Company uses leverage to enhance its return on assets. Although capital remains cheap and plentiful in the commercial real estate markets, recently interest rates and the equity markets are experiencing greater volatility. We have taken a cautious approach in these conditions. In the fourth quarter 2018, we opportunistically refinanced a net lease asset using non-recourse mortgage debt that generated $115.5 million of proceeds to us, net of closing costs, which were used to redeem at par a portion of our senior notes due July 2019. The July 2019 senior notes maturity was reduced from $770.0 million at the beginning of 2018 to $375.0 million as of December 31, 2018. Subsequent to December 31, 2018, we called for redemption the remaining $375.0 million principal amount of July 2019 senior notes on the redemption date of March 7, 2019.
Going forward, the Company will seek to raise capital through a variety of means, which may include unsecured and secured debt financing, debt refinancings, asset sales, sales of interests in business lines, issuances of equity, joint ventures and other third party capital arrangements. A more detailed discussion of the Company's current liquidity and capital resources is provided in Item 7—"Management's Discussion and Analysis of Financial Condition and Results of Operations."
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Underwriting Process
The Company reviews investment opportunities with its investment professionals, as well as representatives from its legal, credit, risk management and capital markets departments. The Company has developed a process for screening potential investments called the Six Point Methodology sm. Through this proprietary process, the Company internally evaluates an investment opportunity by: (1) evaluating the source of the opportunity; (2) evaluating the quality of the collateral, corporate credit or lessee, as well as the market and industry dynamics; (3) evaluating the borrower equity, corporate sponsorship and/or guarantors; (4) determining the optimal legal and financial structure for the transaction given its risk profile; (5) performing an alternative investment test; and (6) evaluating the liquidity of the investment. The Company intends to use a similar screening methodology for leasehold loans to tenants of SAFE and related party transactions with SAFE. The Company maintains an internal investment committee, and certain investments, including related party transactions and leasehold loans to tenants of SAFE, are subject to the approval of the Board of Directors or a committee thereof.
Hedging Strategy
The Company finances its business with a combination of fixed-rate and variable-rate debt and its asset base consists of fixed-rate and variable-rate investments. Its variable-rate assets and liabilities are intended to be matched against changes in variable interest rates. This means that as interest rates increase, the Company earns more on its variable-rate lending assets and pays more on its variable-rate debt obligations and, conversely, as interest rates decrease, the Company earns less on its variable-rate lending assets and pays less on its variable-rate debt obligations. When the Company's variable-rate debt obligations differ from its variable-rate lending assets, the Company may utilize derivative instruments to limit the impact of changing interest rates on its net income. The Company also uses derivative instruments to limit its exposure to changes in currency rates in respect of certain investments denominated in foreign currencies. The derivative instruments the Company uses are typically in the form of interest rate swaps, interest rate caps and foreign exchange contracts.
Policies with Respect to Other Activities
The Company's investment, financing and corporate governance policies (including conflicts of interests policies) are managed under the ultimate supervision of the Company's Board of Directors. The Company can amend, revise or eliminate these policies at any time without a vote of its shareholders. The Company intends to originate and manage investments in a manner consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code") for the Company to qualify as a REIT.
Investment Restrictions or Limitations
The Company does not have any prescribed allocation among investments or product lines. Instead, the Company focuses on corporate and real estate credit underwriting to develop an analysis of the risk/reward trade-offs in determining the pricing and advisability of each particular transaction.
The Company believes that it is not, and intends to conduct its operations so as not to become, regulated as an investment company under the Investment Company Act. The Investment Company Act generally exempts entities that are "primarily engaged in purchasing or otherwise acquiring mortgages and other liens on and interests in real estate" (collectively, "Qualifying Interests"). The Company intends to rely on current interpretations of the Securities and Exchange Commission in an effort to qualify for this exemption. Based on these interpretations, the Company, among other things, must maintain at least 55% of its assets in Qualifying Interests and at least 80% of its assets in Qualifying Interests and other "real estate-related assets" (such as mezzanine loans and unsecured investments in real estate entities) combined. The Company's senior mortgages, real estate assets and certain of its subordinated mortgages generally constitute Qualifying Interests. Subject to the limitations on ownership of certain types of assets and the gross income tests imposed by the Code, the Company also may invest in the securities of other REITs, other entities engaged in real estate activities or other issuers, including for the purpose of exercising control over such entities.
Competition
The Company operates in a competitive market. See Item 1a—Risk factors—"We compete with a variety of financing and leasing sources for our customers," for a discussion of how we may be affected by competition.
Regulation
The operations of the Company are subject, in certain instances, to supervision and regulation by state and federal governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (1) regulate credit granting activities; (2) establish maximum interest rates, finance charges and other charges; (3) require disclosures to customers; (4) govern secured transactions; (5) set collection, foreclosure, repossession and claims-handling procedures and other trade practices; (6) govern privacy of customer information;
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and (7) regulate anti-terror and anti-money laundering activities. Although most states do not regulate commercial finance, certain states impose limitations on interest rates and other charges and on certain collection practices and creditor remedies, and require licensing of lenders and financiers and adequate disclosure of certain contract terms. The Company is also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans.
In the judgment of management, existing statutes and regulations have not had a material adverse effect on the business conducted by the Company. It is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon the future business, financial condition or results of operations or prospects of the Company.
The Company has elected and expects to continue to qualify to be taxed as a REIT under Section 856 through 860 of the Code. As a REIT, the Company must generally distribute at least 90% of its net taxable income, excluding capital gains, to its shareholders each year. In addition, the Company must distribute 100% of its net taxable income (including net capital gains) each year to eliminate U.S. corporate federal income taxes payable by it. REITs are also subject to a number of organizational and operational requirements in order to elect and maintain REIT qualification. These requirements include specific share ownership tests and asset and gross income tests. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal income tax (including, for taxable years prior to 2018, any applicable alternative minimum tax) on its net taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to state and local taxes and to U.S. federal income tax and excise tax on its undistributed income.
Code of Conduct
The Company has adopted a code of conduct that sets forth the principles of conduct and ethics to be followed by our directors, officers and employees (the "Code of Conduct"). The purpose of the Code of Conduct is to promote honest and ethical conduct, compliance with applicable governmental rules and regulations, full, fair, accurate, timely and understandable disclosure in periodic reports, prompt internal reporting of violations of the Code of Conduct and a culture of honesty and accountability. A copy of the Code of Conduct has been provided to each of our directors, officers and employees, who are required to acknowledge that they have received and will comply with the Code of Conduct. A copy of the Company's Code of Conduct has been previously filed with the SEC and is incorporated by reference in this Annual Report on Form 10-K as Exhibit 14.0. The Code of Conduct is also available on the Company's website at www.istar.com. The Company will disclose to shareholders material changes to its Code of Conduct, or any waivers for directors or executive officers, if any, within four business days of any such event. As of December 31, 2018, there have been no amendments to the Code of Conduct and the Company has not granted any waivers from any provision of the Code of Conduct to any directors or executive officers.
Employees
As of February 22, 2019, the Company had 166 employees and believes it has good relationships with its employees. The Company's employees are not represented by any collective bargaining agreements.
Additional Information
We maintain a website at www.istar.com. The information on our website is not incorporated by reference in this report, and our web address is included only as an inactive textual reference. In addition to this Annual Report on Form 10-K, the Company files quarterly and special reports, proxy statements and other information with the SEC. Through the Company's corporate website, www.istar.com, the Company makes available free of charge its annual proxy statement, annual reports to stockholders, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. These documents also may be accessed through the SEC's electronic data gathering, analysis and retrieval system via electronic means, including on the SEC's homepage, which can be found at www.sec.gov.
Item 1a. Risk Factors
In addition to the other information in this report, you should consider carefully the following risk factors in evaluating an investment in the Company's securities. Any of these risks or the occurrence of any one or more of the uncertainties described below could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and market price of the Company's common stock. The risks set forth below speak only as of the date of this report and the Company disclaims any duty to update them except as required by law. For purposes of these risk factors, the terms "our Company," "we," "our" and "us" refer to iStar Inc. and its consolidated subsidiaries, unless the context indicates otherwise.
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Risks Related to Our Business
Changes in general economic conditions and other factors outside our control may adversely affect our business.
Our success is generally dependent upon economic conditions in the United States, and in particular, the geographic areas in which our investments are located. Substantially all businesses, including ours, were negatively affected by the previous economic recession and resulting illiquidity and volatility in the credit and commercial real estate markets. The commercial real estate and credit markets remain volatile and sensitive to factors outside our control, including changes in interest rates, domestic political conditions, geopolitical conditions and other factors. It is not possible for us to predict whether these trends will continue in the future or quantify the impact of these or other trends on our financial results. Deterioration in any of such factors could have a material adverse effect on our financial performance, liquidity and our ability to meet our debt obligations.
Our credit ratings will impact our borrowing costs.
Our borrowing costs and our access to the debt capital markets depend significantly on our credit ratings. Our unsecured corporate credit ratings from major national credit rating agencies are currently below investment grade. Having below investment grade credit ratings increases our borrowing costs and caused restrictive covenants in our public debt instruments to become operative. These restrictive covenants are described below in "Covenants in our indebtedness could limit our flexibility and adversely affect our financial condition." These factors have adversely impacted our financial performance and will continue to do so unless our credit ratings improve.
Covenants in our indebtedness could limit our flexibility and adversely affect our financial condition.
Our outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness of at least 1.2x and a restriction on debt incurrence based upon the effect of the debt incurrence on our fixed charge coverage ratio. If any of our covenants are breached and not cured within applicable cure periods, the breach could result in acceleration of our debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. Limitations on our ability to incur new indebtedness under the fixed charge coverage ratio may limit the amount of new investments we make.
Our revolving credit facility with a maximum capacity of $325.0 million (our "2015 Revolving Credit Facility") and our senior term loan with a maximum capacity of $650.0 million (our "2016 Senior Term Loan") contain certain covenants, including covenants relating to collateral coverage, dividend payments, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, our 2016 Senior Term Loan requires the Company to maintain collateral coverage of at least 1.25x outstanding borrowings on the facility and our 2015 Revolving Credit Facility requires us to maintain both collateral coverage of at least 1.5x outstanding borrowings on the facility and a consolidated ratio of cash flow to fixed charges of at least 1.5x. We may not pay common dividends if the Company is in default under the 2016 Senior Term Loan or the 2015 Revolving Credit Facility or would fail to comply with the covenants in such agreements after giving effect to the dividend.
Our 2016 Senior Term Loan and 2015 Revolving Credit Facility contain cross default provisions that would allow the lenders to declare an event of default and accelerate our indebtedness to them if we fail to pay amounts due in respect of our other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing our unsecured public debt securities permit the bondholders to declare an event of default and accelerate our indebtedness to them if our other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated. A default by us on our indebtedness would have a material adverse effect on our business, liquidity and the market price of our common stock.
We have significant indebtedness and funding commitments and limitations on our liquidity and ability to raise capital may adversely affect us.
Sufficient liquidity is critical to our ability to grow and to meet our scheduled debt payments and our funding commitments to borrowers. We have relied on proceeds from the issuance of unsecured debt, secured borrowings, repayments from our loan assets and proceeds from asset sales to fund our operations and meet our debt maturities, and we expect to continue to rely primarily on these sources of liquidity for the foreseeable future. While we had access to various sources of capital in 2018, our ability to access capital in 2019 and beyond will be subject to a number of factors, many of which are outside of our control, such as general economic conditions, changes in interest rates and conditions prevailing in the credit and real estate markets. There can be no assurance that we will have access to liquidity when needed or on terms that are acceptable to us. We may also encounter difficulty in selling assets or executing capital raising strategies on acceptable terms in a timely manner, which could impact our ability to make scheduled repayments on our outstanding debt. Failure to repay or refinance our borrowings as they come due would be an event of default under the relevant debt instruments, which could result in a cross default and acceleration of our other outstanding
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debt obligations. Failure to meet funding commitments could cause us to be in default of our financing commitments to borrowers. Any of the foregoing could have a material adverse effect on our business, liquidity and the market price of our common stock.
We may utilize derivative instruments to hedge risk, which may adversely affect our borrowing cost and expose us to other risks.
The derivative instruments we may use are typically in the form of interest rate swaps, interest rate caps and foreign exchange contracts. Interest rate swaps effectively change variable-rate debt obligations to fixed-rate debt obligations or fixed-rate debt obligations to variable-rate debt obligations. Interest rate caps limit our exposure to rising interest rates. Foreign exchange contracts limit or offset our exposure to changes in currency rates in respect of certain investments denominated in foreign currencies.
Our use of derivative instruments also involves the risk that a counterparty to a hedging arrangement could default on its obligation and the risk that we may have to pay certain costs, such as transaction fees or breakage costs, if a hedging arrangement is terminated by us. As a matter of policy, we enter into hedging arrangements with counterparties that are large, creditworthy financial institutions typically rated at least "A/A2" by S&P and Moody's, respectively.
Developing an effective strategy for dealing with movements in interest rates and foreign currencies is complex and no strategy can completely insulate us from risks associated with such fluctuations. There can be no assurance that any hedging activities will have the desired beneficial impact on our results of operations or financial condition.
Significant increases in interest rates could have an adverse effect on our operating results.
Our operating results depend in part on the difference between the interest and related income earned on our assets and the interest expense incurred in connection with our interest bearing liabilities. Changes in the general level of interest rates prevailing in the financial markets will affect the spread between our interest earning assets and interest bearing liabilities subject to the impact of interest rate floors and caps, as well as the amounts of floating rate assets and liabilities. Any significant compression of the spreads between interest earning assets and interest bearing liabilities could have a material adverse effect on us. While interest rates remain low by historical standards, rates have recently risen and are generally expected to rise in the coming years, although there is no certainty as to the amount by which they may rise. In the event of a significant rising interest rate environment, rates could exceed the interest rate floors that exist on certain of our floating rate debt and create a mismatch between our floating rate loans and our floating rate debt that could have a significant adverse effect on our operating results. An increase in interest rates could also, among other things, reduce the value of our fixed-rate interest bearing assets and our ability to realize gains from the sale of such assets. In addition, rising interest rates tend to negatively impact the residential mortgage market, which in turn may adversely affect the value of and demand for our land assets, including our residential development projects. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control.
Changes in the method for determining LIBOR or a replacement of LIBOR may affect the value of the financial obligations to be held or issued by us that are linked to LIBOR and could affect our results of operations or financial condition.
In July 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. We are unable to predict the effect of any changes, any establishment of alternative reference rates or any other reforms to LIBOR or any replacement of LIBOR that may be enacted in the United Kingdom or elsewhere. Such changes, reforms or replacements relating to LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, derivatives and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.
We are required to make a number of judgments in applying accounting policies, and different estimates and assumptions could result in changes to our financial condition and results of operations.
Material estimates that are particularly susceptible to significant change underlie our determination of the reserve for loan losses, which is based primarily on the estimated fair value of loan collateral, as well as the valuation of real estate assets and deferred tax assets. While we have identified those accounting policies that are considered critical and have procedures in place to facilitate the associated judgments, different assumptions in the application of these policies could have a material adverse effect on our financial performance and results of operations and actual results may differ materially from our estimates.
The carrying values of our assets held for investment are not determined based upon the prices at which they could be sold currently. We have recognized impairments as a result of selling or marketing legacy assets for sale, or re-evaluating expected cash flows from legacy assets, and there can be no assurance that we will not recognize more impairments in the future on legacy and non-legacy assets.
As discussed further in the notes to our consolidated financial statements, we record our real estate and land and development assets at cost less accumulated depreciation and amortization. If we hold a property for use or investment, we will only review it
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for impairment in value if events or changes in circumstances indicate that the carrying amount of the property may not be recoverable, based on management's determination that the aggregate future cash flows to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Management's estimates of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors. The carrying values of our real estate and land and development assets are not indicative of the prices at which we would be able to sell the properties, if we had to do so before the end of their intended holding period. If we changed our investment intent and decided to sell a property that was being held for investment, including in distressed circumstances as a means of raising liquidity, there can be no assurance that we would not realize losses on such sales, which losses could have a material adverse effect on our business, financial results, liquidity and the market price of our common stock. We intend to accelerate the monetization of assets in our legacy portfolio, including certain larger assets, and our decisions to do so resulted in our recognizing significant impairments in 2018. We also recognized additional impairments on legacy assets in 2018 from a re-evaluation of expected cash flows from certain legacy assets (refer to "Item 7. Management's Discussion and Analysis - Our Portfolio"). We continue to hold other legacy assets for investment, and there can be no assurance that we will not recognize impairment on such assets, or non-legacy assets in the future.
Changes in accounting rules will affect our financial reporting.
The Financial Accounting Standards Board ("FASB") has issued new accounting standards that will affect our financial reporting.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), and in July 2018, the FASB issued ASU 2018-11, Leases ("ASU 2018-11"), to address two requirements of ASU 2016-02. ASU 2016-02 and ASU 2018-11 are effective for interim and annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating or finance leases. For operating and finance leases, a lessee will be required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its statement of financial position. Lessees under operating leases will be required to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis, and classify all cash payments within operating activities in its statement of cash flows. Lessees under finance leases will be required to recognize interest expense on the lease liability (under the effective interest method) and amortization expense of the right-of-use asset (generally on a straight line basis), each reflected separately in its statement of operations. For operating lease arrangements for which we are the lessee, primarily under leases of office space and certain ground leases, we expect the adoption of ASU 2016-02 to result in the recognition of a right-of-use asset and lease liability on our consolidated balance sheets. We do not expect the right-of-use assets or lease liabilities to be material to our balance sheet. The accounting applied by us as a lessor will be mostly unchanged from that applied under previous GAAP.
Management has decided to elect the practical expedient package that allows us: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019; and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. In addition, we will elect to not record on our consolidated balance sheets leases whose term is less than 12 months at lease inception.
ASU 2018-11 amends ASU 2016-02 so that: (a) entities may elect to not recast the comparative periods presented when transitioning to ASC 842 by allowing entities to change their initial application to the beginning of the period of adoption; and (b) provides lessors with a practical expedient to not separate non-lease components from the associated lease component of the contractual payments if certain conditions are met. Management has decided to elect both of these provisions.
Changes in accounting standards could affect the comparability of our reported results with prior periods and our ability to comply with financial covenants under our debt instruments. We may also need to change our accounting systems and processes to enable us to comply with the new standards, which may be costly.
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For additional information regarding new accounting standards, refer to Note 3 to our consolidated financial statements under the heading "New accounting pronouncements."
Our reserves for loan losses may prove inadequate, which could have a material adverse effect on our financial results.
We maintain loan loss reserves to offset potential future losses. Our general loan loss reserve reflects management's then-current estimation of the probability and severity of losses within our portfolio. In addition, our determination of asset-specific loan loss reserves relies on material estimates regarding the fair value of loan collateral. Estimation of ultimate loan losses, provision expenses and loss reserves is a complex and subjective process. As such, there can be no assurance that management's judgment will prove to be correct and that reserves will be adequate over time to protect against potential future losses. Such losses could be caused by factors including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. In particular, during the previous financial crisis, the weak economy and disruption of the credit markets adversely impacted the ability and willingness of many of our borrowers to service their debt and refinance our loans to them at maturity. If our reserves for credit losses prove inadequate we may suffer additional losses which would have a material adverse effect on our financial performance, liquidity and the market price of our common stock.
We have suffered losses when a borrower defaults on a loan and the underlying collateral value is not sufficient, and we may suffer additional losses in the future.
We have suffered losses arising from borrower defaults on our loan assets and we may suffer additional losses in the future. In the event of a default by a borrower on a non-recourse loan, we will only have recourse to the real estate-related assets collateralizing the loan. If the underlying collateral value is less than the loan amount, we will suffer a loss. Conversely, we sometimes make loans that are unsecured or are secured only by equity interests in the borrowing entities. These loans are subject to the risk that other lenders may be directly secured by the real estate assets of the borrower. In the event of a default, those collateralized lenders would have priority over us with respect to the proceeds of a sale of the underlying real estate. In cases described above, we may lack control over the underlying asset collateralizing our loan or the underlying assets of the borrower prior to a default, and as a result the value of the collateral may be reduced by acts or omissions by owners or managers of the assets.
We sometimes obtain individual or corporate guarantees from borrowers or their affiliates. In cases where guarantees are not fully or partially secured, we typically rely on financial covenants from borrowers and guarantors which are designed to require the borrower or guarantor to maintain certain levels of creditworthiness. Where we do not have recourse to specific collateral pledged to satisfy such guarantees or recourse loans, or where the value of the collateral proves insufficient, we will only have recourse as an unsecured creditor to the general assets of the borrower or guarantor, some or all of which may be pledged to satisfy other lenders. There can be no assurance that a borrower or guarantor will comply with its financial covenants, or that sufficient assets will be available to pay amounts owed to us under our loans and guarantees. As a result of these factors, we may suffer additional losses which could have a material adverse effect on our financial performance, liquidity and the market price of our common stock.
In the event of a borrower bankruptcy, we may not have full recourse to the assets of the borrower in order to satisfy our loan. In addition, certain of our loans are subordinate to other debts of the borrower. If a borrower defaults on our loan or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt receives payment. Where debt senior to our loan exists, the presence of intercreditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through "standstill" periods) and control decisions made in bankruptcy proceedings relating to borrowers. Bankruptcy and borrower litigation can significantly increase collection costs and losses and the time necessary to acquire title to the underlying collateral, during which time the collateral may decline in value, causing us to suffer additional losses.
If the value of collateral underlying our loan declines or interest rates increase during the term of our loan, a borrower may not be able to obtain the necessary funds to repay our loan at maturity through refinancing. Decreasing collateral value and/or increasing interest rates may hinder a borrower's ability to refinance our loan because the underlying property cannot satisfy the debt service coverage requirements necessary to obtain new financing. If a borrower is unable to repay our loan at maturity, we could suffer additional loss which may adversely impact our financial performance.
Our expectations as to the potential size of the market for Ground Lease transactions and the growth of SAFE may prove to be incorrect.
We have made a significant investment in SAFE and the Ground Lease business. The achievement of our investment objectives for the Ground Lease business depends, in large part, on our ability, as SAFE's manager, to grow SAFE's portfolio. We cannot assure you that the size of the market for Ground Leases will meet our estimates. Potential tenants may prefer to own the land underlying the improvements they intend to develop, rehabilitate or own. In addition, as and when interest rates increase,
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there may be less activity generally in real estate transactions, including leasing, development and financing, and less financing available for potential tenants to finance their leasehold interests. If the Ground Lease business does not achieve our investment objectives, the value of our investment in SAFE may decline materially and/or SAFE may reduce its distributions to stockholders, including us.
We may acquire a commercial property with the intent to sell the land to SAFE and to sell or lease the leasehold interest to a third party. If we are unable to sell or lease the leasehold interest, we will be exposed to the risks of ownership of operating properties.
We may acquire commercial properties with the intent to separate the property into an ownership interest in land that is sold to SAFE and an interest in the buildings and improvements thereon that is sold or leased to a third party. There may be instances where we are unable to find a purchaser or lessee for the improvements, in which case we will be subject to the risks of owning operating properties.
The ownership and operation of commercial properties will expose us to risks, including, without limitation:

• | adverse changes in international, regional or local economic and demographic conditions;

• | tenant vacancies and market pressures to offer tenant incentives to sign or renew leases;

• | adverse changes in the financial position or liquidity of tenants;

• | the inability to collect rent from tenants;

• | tenant bankruptcies;

• | higher costs resulting from capital expenditures and property operating expenses;

• | civil disturbances, hurricanes and other natural disasters, or terrorist acts or acts of war, which may result in uninsured or underinsured losses;

• | liabilities under environmental laws;

• | risks of loss from casualty or condemnation;

• | changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws; and

• | the other risks described under "We are subject to additional risks associated with owning and developing property."

Upon taking ownership of a commercial property, we may be required to contribute ownership of the land to a taxable REIT subsidiary ("TRS"), which would subsequently seek to sell the land to SAFE and lease or sell a leasehold interest in such commercial property to a third party. Any gain from the sale of land would be subject to corporate income tax.
We are subject to additional risks associated with loan participations.
Some of our loans are participation interests or co-lender arrangements in which we share the rights, obligations and benefits of the loan with other lenders. We may need the consent of these parties to exercise our rights under such loans, including rights with respect to amendment of loan documentation, enforcement proceedings in the event of default and the institution of, and control over, foreclosure proceedings. Similarly, a majority of the participants may be able to take actions to which we object but to which we will be bound if our participation interest represents a minority interest. We may be adversely affected by this lack of full control.
We are subject to additional risk associated with owning and developing real estate.
We own a number of assets that previously served as collateral on defaulted loans. These assets are predominantly land and development assets and operating properties. These assets expose us to additional risks, including, without limitation:

• | We must incur costs to carry these assets and in some cases make repairs to defects in construction, make improvements to, or complete the assets, which requires additional liquidity and results in additional expenses that could exceed our original estimates and impact our operating results.

• | Real estate projects are not liquid and, to the extent we need to raise liquidity through asset sales, we may be limited in our ability to sell these assets in a short-time frame.

• | Uncertainty associated with economic conditions, rezoning, obtaining governmental permits and approvals, concerns of community associations, reliance on third party contractors, increasing commodity costs and threatened or pending litigation may materially delay our completion of rehabilitation and development activities and materially increase their cost to us.

• | The values of our real estate investments are subject to a number of factors outside of our control, including changes in the general economic climate, changes in interest rates and the availability of attractive financing, over-building or decreasing demand in the markets where we own assets, and changes in law and governmental regulations.

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The residential market has experienced significant downturns that could recur and adversely affect us.
As of December 31, 2018, we owned land and residential condominiums with a net carrying value of $618.8 million. The housing market in the United States has previously been affected by weakness in the economy, high unemployment levels and low consumer confidence. It is possible another downturn could occur again in the near future and adversely impact our portfolio, and accordingly our financial performance. In addition, rising interest rates tend to negatively impact the residential mortgage market, which in turn may adversely affect the value of and demand for our land assets including our residential development projects.
We may experience losses if the creditworthiness of our tenants deteriorates and they are unable to meet their lease obligations.
We own properties leased to tenants of our real estate assets and receive rents from tenants during the contracted term of such leases. We underwrite the credit of prospective borrowers and tenants and often require them to provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although our loans and real estate assets are geographically diverse and the borrowers and tenants operate in a variety of industries, to the extent we have a significant concentration of interest or operating lease revenues from any single borrower or customer, the inability of that borrower or tenant to make its payment could have a material adverse effect on us. As of December 31, 2018, our five largest borrowers or tenants of net lease assets collectively accounted for approximately 14.4% of our 2018 revenues, of which no single customer accounts for more than 6.7%. A tenant's ability to pay rent is determined by its creditworthiness, among other factors. If a tenant's credit deteriorates, the tenant may default on its obligations under our lease and may also become bankrupt. The bankruptcy or insolvency of our tenants or other failure to pay is likely to adversely affect the income produced by our real estate assets. If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy, we may not be able to evict the tenant solely because of such bankruptcy or failure to pay. A court, however, may authorize a tenant to reject and terminate its lease with us. In such a case, our claim against the tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In addition, certain amounts paid to us within 90 days prior to the tenant's bankruptcy filing could be required to be returned to the tenant's bankruptcy estate. In any event, it is highly unlikely that a bankrupt or insolvent tenant would pay in full amounts it owes us under a lease that it intends to reject. In other circumstances, where a tenant's financial condition has become impaired, we may agree to partially or wholly terminate the lease in advance of the termination date in consideration for a lease termination fee that is likely less than the total contractual rental amount. Without regard to the manner in which the lease termination occurs, we are likely to incur additional costs in the form of tenant improvements and leasing commissions in our efforts to lease the space to a new tenant. In any of the foregoing circumstances, our financial performance could be materially adversely affected.
We are subject to risks relating to our asset concentration.
Our portfolio consists primarily of real estate and commercial real estate loans which are generally diversified by asset type, obligor, property type and geographic location. Refer to "Item 7. Management's Discussion and Analysis - Portfolio Overview" for our asset concentrations by property type and geographic location. Many property types were adversely affected by the previous economic recession and we may suffer additional losses on our assets due to these concentrations.
Lease expirations, lease defaults and lease terminations may adversely affect our revenue.
Lease expirations and lease terminations may result in reduced revenues if the lease payments received from replacement tenants are less than the lease payments received from the expiring or terminating corporate tenants. In addition, lease defaults or lease terminations by one or more significant tenants or the failure of tenants under expiring leases to elect to renew their leases could cause us to experience long periods of vacancy with no revenue from a facility and to incur substantial capital expenditures and/or lease concessions in order to obtain replacement tenants. Leases representing approximately 14.1% of our in-place operating lease income are scheduled to expire during the next five years.
We compete with a variety of financing and leasing sources for our customers.
The financial services industry and commercial real estate markets are highly competitive and have become more competitive in recent years. Our competitors include finance companies, other REITs, commercial banks and thrift institutions, investment banks and hedge funds, among others. Our competitors may seek to compete aggressively on a number of factors including transaction pricing, terms and structure. We may have difficulty competing to the extent we are unwilling to match our competitors' deal terms in order to maintain our interest margins and/or credit standards. To the extent that we match competitors' pricing, terms or structure, we may experience decreased interest margins and/or increased risk of credit losses, which could have a material adverse effect on our financial performance, liquidity and the market price of our common stock.
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We face significant competition within our net leasing business from other owners, operators and developers of properties, many of which own properties similar to ours in markets where we operate. Such competition may affect our ability to attract and retain tenants and reduce the rents we are able to charge. These competing properties may have vacancy rates higher than our properties, which may result in their owners offering lower rental rates than we would or providing greater tenant improvement allowances or other leasing concessions. This combination of circumstances could adversely affect our revenues and financial performance.
We are subject to certain risks associated with investing in real estate, including potential liabilities under environmental laws and risks of loss from weather conditions, man-made or natural disasters, climate change and terrorism.
Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property. Those laws typically impose cleanup responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of such hazardous or toxic substances. The costs of investigation, remediation or removal of those substances may be substantial. The owner or control party of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners of real properties for personal injuries associated with asbestos-containing materials. While a secured lender is not likely to be subject to these forms of environmental liability, when we foreclose on real property, we become an owner and are subject to the risks of environmental liability. Additionally, our net lease assets require our tenants to undertake the obligation for environmental compliance and indemnify us from liability with respect thereto. There can be no assurance that our tenants will have sufficient resources to satisfy their obligations to us.
Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can damage properties we own. As of December 31, 2018, approximately 16% of the carrying value of our assets was located in the western and northwestern United States, geographic areas at higher risk for earthquakes. Additionally, we own properties located near the coastline and the value of our properties will potentially be subject to the risks associated with long-term effects of climate change. A significant number of our properties are located in major urban areas which, in recent years, have been high risk geographical areas for terrorism and threats of terrorism. Certain forms of terrorism including, but not limited to, nuclear, biological and chemical terrorism, political risks, environmental hazards and/or Acts of God may be deemed to fall completely outside the general coverage limits of our insurance policies or may be uninsurable or cost prohibitive to justify insuring against. Furthermore, if the U.S. Terrorism Risk Insurance Program Reauthorization Act is repealed or not extended or renewed upon its expiration, the cost for terrorism insurance coverage may increase and/or the terms, conditions, exclusions, retentions, limits and sublimits of such insurance may be materially amended, and may effectively decrease the scope and availability of such insurance to the point where it is effectively unavailable. Future weather conditions, man-made or natural disasters, effects of climate change or acts of terrorism could adversely impact the demand for, and value of, our assets and could also directly impact the value of our assets through damage, destruction or loss, and could thereafter materially impact the availability or cost of insurance to protect against these events. Although we believe our owned real estate and the properties collateralizing our loan assets are adequately covered by insurance, we cannot predict at this time if we or our borrowers will be able to obtain appropriate coverage at a reasonable cost in the future, or if we will be able to continue to pass along all of the costs of insurance to our tenants. Any weather conditions, man-made or natural disasters, terrorist attack or effect of climate change, whether or not insured, could have a material adverse effect on our financial performance, liquidity and the market price of our common stock. In addition, there is a risk that one or more of our property insurers may not be able to fulfill their obligations with respect to claims payments due to a deterioration in its financial condition.
Transactions between iStar and SAFE were negotiated between related parties and their terms may not be as favorable to us as if they had been negotiated with an unaffiliated third party.
Transactions between iStar and SAFE, including our recent $250.0 million investment in SAFE and the agreements entered into in connection with such investment (refer to "Item 7. Management's Discussion and Analysis - Our Portfolio") were negotiated between related parties and their terms may not be as favorable to us as if they had been negotiated with an unaffiliated third party. In addition, we may choose not to enforce, or to enforce less vigorously, our rights under agreements with SAFE because of our desire to maintain our ongoing relationship with SAFE.
There are various potential conflicts of interest in our relationship with SAFE, including our executive officers and/or directors who are also officers and/or directors of SAFE, which could result in decisions that are not in the best interest of our stockholders.
Conflicts of interest may exist or could arise in the future with SAFE, including our executive officers and/or directors who are also directors or officers of SAFE. Conflicts may include, without limitation: conflicts arising from the enforcement of
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agreements between us and SAFE; conflicts in the amount of time that our officers and employees will spend on our affairs versus SAFE's affairs; and conflicts in future transactions that we may pursue with SAFE. Transactions between iStar and SAFE would be subject to certain approvals of our independent directors; however, there can be no assurance that such approval will be successful in achieving terms and conditions as favorable to us as would be available from a third party. Two directors of iStar also serve on SAFE's our board of directors, including Jay Sugarman, who is the chief executive officer of SAFE and our chief executive officer.
Our directors and executive officers have duties to our company under applicable Maryland law, and our executive officers and our directors who are also directors or officers of SAFE also have duties to SAFE under applicable Maryland law. Those duties may come in conflict from time to time. We have duties as the manager of SAFE which may come in conflict with our duties to our stockholders from time to time. In addition, conflicts of interest may exist or could arise in the future with our duties to Net Lease Venture II and our duties to SAFE as its manager in connection with future investment opportunities.
From time to time we make investments in companies over which we do not have control. Some of these companies operate in industries that differ from our current operations, with different risks than investing in real estate.
From time to time we make debt or equity investments in other companies that we may not control or over which we may not have sole control. Although these businesses generally have a significant real estate component, some of them may operate in businesses that are different from our primary business segments. Consequently, investments in these businesses, among other risks, subject us to the operating and financial risks of industries other than real estate and to the risk that we do not have sole control over the operations of these businesses.
From time to time we may make additional investments in or acquire other entities that may subject us to similar risks. Investments in entities over which we do not have sole control, including joint ventures, present additional risks such as having differing objectives than our partners or the entities in which we invest, or becoming involved in disputes, or competing with those persons. In addition, we rely on the internal controls and financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may adversely affect us.
Declines in the market values of our equity investments may adversely affect periodic reported results.
Most of our equity investments are in funds or companies that are not publicly traded and their fair value may not be readily determinable. We may periodically estimate the fair value of these investments, based upon available information and management's judgment. Because such valuations are inherently uncertain, they may fluctuate over short periods of time. In addition, our determinations regarding the fair value of these investments may be materially higher than the values that we ultimately realize upon their disposal, which could result in losses that have a material adverse effect on our financial performance, the market price of our common stock and our ability to pay dividends.
Quarterly results may fluctuate and may not be indicative of future quarterly performance.
Our quarterly operating results could fluctuate; therefore, reliance should not be placed on past quarterly results as indicative of our performance in future quarters. Factors that could cause quarterly operating results to fluctuate include, among others, variations in loan and real estate portfolio performance, levels of non-performing assets and related provisions, market values of investments, costs associated with debt, general economic conditions, the state of the real estate and financial markets and the degree to which we encounter competition in our markets.
Our ability to retain and attract key personnel is critical to our success.
Our success depends on our ability to retain our senior management and the other key members of our management team and recruit additional qualified personnel. We rely in part on equity compensation to retain and incentivize our personnel. In addition, if members of our management join competitors or form competing companies, the competition could have a material adverse effect on our business. Efforts to retain or attract professionals may result in additional compensation expense, which could affect our financial performance.
Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, and personally identifiable information of our customers and employees, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure
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or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations and the services we provide to customers, and damage our reputation, which could have a material adverse effect on our business.
We may change certain of our policies without stockholder approval.
Our charter does not set forth specific percentages of the types of investments we may make. We can amend, revise or eliminate our investment financing and conflict of interest policies at any time at our discretion without a vote of our shareholders. A change in these policies could have a material adverse effect on our financial performance, liquidity and the market price of our common stock.
Certain provisions in our charter may inhibit a change in control.
Generally, to maintain our qualification as a REIT under the Code, not more than 50% in value of our outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year. The Code defines "individuals" for purposes of the requirement described in the preceding sentence to include some types of entities. Under our charter, no person may own more than 9.8% of our outstanding shares of stock, with some exceptions. The restrictions on transferability and ownership may delay, deter or prevent a change in control or other transaction that might involve a premium price or otherwise be in the best interest of the security holders.
We would be subject to adverse consequences if we fail to qualify as a REIT.
We believe that we have been organized and operated in a manner so as to qualify for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 1998. Our qualification as a REIT, however, has depended and will continue to depend on our ability to meet various requirements concerning, among other things, the ownership of our outstanding stock, the nature of our assets, the sources of our income and the amount of our distributions to our shareholders. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to manage successfully the composition of our income and assets on an ongoing basis. Our ability to satisfy these asset tests depends upon our analysis of the characterization of our assets for U.S. federal income tax purposes and fair market values of our assets. The fair market values of certain of our assets are not susceptible to a precise determination.
If we were to fail to qualify as a REIT for any taxable year, we would not be allowed a deduction for distributions to our shareholders in computing our net taxable income and would be subject to U.S. federal income tax, including, for taxable years prior to 2018, any applicable alternative minimum tax on our net taxable income at regular corporate rates and applicable state and local taxes. We would also be disqualified from treatment as a REIT for the four subsequent taxable years following the year during which our REIT qualification was lost unless we were entitled to relief under certain Code provisions and obtained a ruling from the IRS. If disqualified and unable to obtain relief, we may need to borrow money or sell assets to pay taxes. As a result, cash available for distribution would be reduced for each of the years involved. Furthermore, it is possible that future economic, market, legal, tax or other considerations may cause our REIT qualification to be revoked. This could have a material adverse effect on our business and the market price of our common stock.
Our 2016 Senior Term Loan and 2015 Revolving Credit Facility (see Item 8—"Financial Statements and Supplemental Data—Note 10") prohibit us from paying dividends on our common stock if we no longer qualify as a REIT.
To qualify as a REIT, we may be forced to borrow funds, sell assets or take other actions during unfavorable market conditions.
To qualify as a REIT, we generally must distribute to our shareholders at least 90% of our net taxable income, excluding net capital gains each year, and we will be subject to U.S. federal income tax, as well as applicable state and local taxes, to the extent that we distribute less than 100% of our net taxable income each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
In the event that principal, premium or interest payments with respect to a particular debt instrument that we hold are not made when due, we may nonetheless be required to continue to recognize the unpaid amounts as taxable income. In addition, we may be allocated taxable income in excess of cash flow received from some of our partnership investments. For taxable years beginning after December 31, 2017, we will generally be required to take certain amounts into income no later than the time such amounts are reflected on our financial statements (this rule will apply to debt instruments issued with original issue discount for taxable years beginning after December 31, 2018). Also, in certain circumstances our ability to deduct interest expenses for U.S. federal income tax purposes may be limited. From these and other potential timing differences between income recognition or expense deduction and cash receipts or disbursements, there is a significant risk that we may have substantial taxable income in
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excess of cash available for distribution. In order to qualify as a REIT and avoid the payment of income and excise taxes, we may need to borrow funds or take other actions to meet our REIT distribution requirements for the taxable year in which the phantom income is recognized.
Complying with the REIT requirements may cause us to forego and/or liquidate otherwise attractive investments.
In order to meet the income, asset and distribution tests under the REIT rules, we may be required to take or forego certain actions. For instance, we may not be able to make certain investments and we may have to liquidate other investments. In addition, we may be required to make distributions to shareholders at disadvantageous times or when we do not have funds readily available for distribution. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.
Certain of our business activities may potentially be subject to the prohibited transaction tax, which could reduce the return on your investment.
For so long as we qualify as a REIT, our ability to dispose of certain properties may be restricted under the REIT rules, which generally impose a 100% penalty tax on any gain recognized on "prohibited transactions," which refers to the disposition of property that is deemed to be inventory or held primarily for sale to customers in the ordinary course of our business, subject to certain exceptions. Whether property is inventory or otherwise held primarily for sale depends on the particular facts and circumstances. The Code provides a safe harbor that, if met, allows a REIT to avoid being treated as engaged in a prohibited transaction. No assurance can be given that any property that we sell will not be treated as property held for sale to customers, or that we can comply with the safe harbor. The 100% tax does not apply to gains from the sale of foreclosure property or to property that is held through a taxable REIT subsidiary ("TRS") or other taxable corporation, although such income will be subject to tax in the hands of the corporation at regular corporate rates. We intend to structure our activities to avoid prohibited transaction characterization.
Certain of our activities, including our use of TRSs, are subject to taxes that could reduce our cash flows.
Even if we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay some U.S. federal, state, local and non-U.S. taxes on our income and property, including taxes on any undistributed income, taxes on income from certain activities conducted as a result of foreclosures, and property and transfer taxes. We would be required to pay taxes on net taxable income that we fail to distribute to our shareholders. In addition, we may be required to limit certain activities that generate non-qualifying REIT income, such as land development and sales of condominiums, and/or we may be required to conduct such activities through TRS. We hold a significant amount of assets in our TRS, including assets that we have acquired through foreclosure, assets that may be treated as dealer property and other assets that could adversely affect our ability to qualify as a REIT if held at the REIT level. As a result, we will be required to pay income taxes on the taxable income generated by these assets. Furthermore, we will be subject to a 100% penalty tax to the extent our economic arrangements with our TRS are not comparable to similar arrangements among unrelated parties. We will also be subject to a 100% tax to the extent we derive income from the sale of assets to customers in the ordinary course of business other than through our TRS. To the extent we or our TRS are required to pay U.S. federal, state, local or non-U.S. taxes, we will have less cash available for distribution to our shareholders.
We have substantial net operating loss carry forwards which we use to offset our tax and distribution requirements. We fully utilized our net capital loss carry forward during the year ended December 31, 2017. Net operating losses arising in taxable years beginning after December 31, 2017 will only be able to offset up to 80% of our net taxable income (after the application of the dividends paid deduction) and may not be carried back. In the event that we experience an "ownership change" for purposes of Section 382 of the Code, our ability to use these losses will be limited. An "ownership change" is determined through a set of complex rules which track the changes in ownership that occur in our common stock for a trailing three year period. We have experienced volatility and significant trading in our common stock in recent years. The occurrence of an ownership change is generally beyond our control and, if triggered, may increase our tax and distribution obligations for which we may not have sufficient cash flow.
A failure to comply with the limits on our ownership of and relationship with our TRS would jeopardize our REIT qualification and may result in the application of a 100% excise tax.
No more than 20% (25% for taxable years beginning before December 31, 2017) of the value of a REIT's total assets may consist of stock or securities of one or more TRS. This requirement limits the extent to which we can conduct activities through TRS or expand the activities that we conduct through TRS. The values of some of our assets, including assets that we hold through TRSs may not be subject to precise determination, and values are subject to change in the future. In addition, we hold certain mortgage and mezzanine loans within one or more of our TRS that are secured by real property. We treat these loans as qualifying assets for purposes of the REIT asset tests to the extent that such mortgage loans are secured by real property and such mezzanine
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loans are secured by an interest in a limited liability company that holds real property. We received from the IRS a private letter ruling which holds that we may exclude such loans from the limitation that securities from TRS must constitute no more than 20% (25% for taxable years beginning before December 31, 2017) of our total assets. We are entitled to rely upon this private letter ruling only to the extent that we did not misstate or omit a material fact in the ruling request and that we continue to operate in accordance with the material facts described in such request, and no assurance can be given that we will always be able to do so. To the extent that any loan is recharacterized as equity, it would increase the amount of non-real estate securities that we have in our TRS and could adversely affect our ability to meet the limitation described above. If we were not able to exclude such loans to our TRS from the limitation described above, our ability to meet the REIT asset tests and other REIT requirements could be adversely affected. Accordingly, there can be no assurance that we have met or will be able to continue to comply with the TRS limitation.
In addition, we may from time to time need to make distributions from a TRS in order to keep the value of our TRS below the TRS limitation. TRS dividends, however, generally will not constitute qualifying income for purposes of the 75% REIT gross income test. While we will monitor our compliance with both this income test and the limitation on the percentage of our total assets represented by TRS securities, and intend to conduct our affairs so as to comply with both, the two may at times be in conflict with one another. For example, it is possible that we may wish to distribute a dividend from a TRS in order to reduce the value of our TRS to comply with limitation, but we may be unable to do so without simultaneously violating the 75% REIT gross income test.
Although there are other measures we can take in such circumstances to remain in compliance with the requirements for REIT qualification, there can be no assurance that we will be able to comply with both of these tests in all market conditions.
Dividends payable by REITs do not qualify for the reduced tax rates on dividend income from C corporations, which could adversely affect the value of our common stock.
The maximum U.S. federal income tax rate for certain qualified dividends payable by C corporations to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, are generally not eligible for this reduced rate. For taxable years beginning after December 31, 2017 and before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain qualified business income, including "qualified REIT dividends" (generally, REIT dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Although the reduced U.S. federal income tax rate applicable to qualified dividends from C corporations does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends, together with the recently reduced corporate tax rate (21%) could cause non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in non-REIT corporations that pay dividends, which could adversely affect the value of the REIT shares, including our common stock.
Legislative or regulatory tax changes related to REITs could materially and adversely affect us.
The U.S. federal income tax laws and regulations governing REITs and their stockholders, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, the U.S. federal income tax laws applicable to us and our stockholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in our common stock.
The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, made significant changes to the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their stockholders. Certain key provisions of the Tax Cuts and Jobs Act could impact the Company and its stockholders, beginning in 2018, including the following:

• | Reduced Tax Rates. The highest individual U.S. federal income tax rate on ordinary income is reduced from 39.6% to 37% (through taxable years ending in 2025), and the maximum corporate income tax rate is reduced from 35% to 21%. In addition, individuals, trust, and estates that own the Company's stock are permitted to deduct up to 20% of dividends received from the Company (other than dividends that are designated as capital gain dividends or qualified dividend income), generally resulting in an effective maximum U.S. federal income tax rate of 29.6% on such dividends (through taxable years ending in 2025). Further, the amount that the Company is required to withhold on distributions to non-U.S. stockholders that are treated as attributable to gains from the Company's sale or exchange of U.S. real property interests is reduced from 35% to 21%.

• | Net Operating Losses. The Company may not use net operating losses generated beginning in 2018 to offset more than 80% of the Company's taxable income (after the application of the dividends paid deduction). Net operating losses generated beginning in 2018 can be carried forward indefinitely but can no longer be carried back.

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• | Limitation on Interest Deductions. The amount of net interest expense that each of the Company and its TRSs may deduct for a taxable year is limited to the sum of: (i) the taxpayer's business interest income for the taxable year; and (ii) 30% of the taxpayer's "adjusted taxable income" for the taxable year. For taxable years beginning before January 1, 2022, adjusted taxable income means earnings before interest, taxes, depreciation, and amortization ("EBITDA"); for taxable years beginning on or after January 1, 2022, adjusted taxable income is limited to earnings before interest and taxes ("EBIT"). Certain electing businesses, including electing real estate businesses, may elect out of the foregoing limitation.

• | Alternative Minimum Tax. The corporate alternative minimum tax is eliminated.

• | Income Accrual. The Company is required to recognize certain items of income for U.S. federal income tax purposes no later than the Company would report such items on its financial statements. As discussed in Item 1a-Risk factors-"To qualify as a REIT, we may be forced to borrow funds, sell assets or take other actions during unfavorable market conditions", earlier recognition of income for U.S. federal income tax purposes could impact the Company's ability to satisfy the REIT distribution requirements. This provision generally applies to taxable years beginning after December 31, 2017, but will apply with respect to income from a debt instrument having "original issue discount" for U.S. federal income tax purposes only for taxable years beginning after December 31, 2018.

Prospective investors are urged to consult with their tax advisors regarding the effects of the Tax Cuts and Jobs Act or other legislative, regulatory or administrative developments on an investment in the Company's common stock.
Our Investment Company Act exemption limits our investment discretion and loss of the exemption would adversely affect us.
We believe that we currently are not, and we intend to operate our company so that we will not be, regulated as an investment company under the Investment Company Act because we are "primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate." Specifically, we are required to invest at least 55% of our assets in "qualifying real estate assets" (that is, real estate, mortgage loans and other qualifying interests in real estate), and at least 80% of our assets in "qualifying real estate assets" and other "real estate-related assets" (such as mezzanine loans and unsecured investments in real estate entities) combined.
We will need to monitor our assets to ensure that we continue to satisfy the percentage tests. Maintaining our exemption from regulation as an investment company under the Investment Company Act limits our ability to invest in assets that otherwise would meet our investment strategies. If we fail to qualify for this exemption, we could not operate our business efficiently under the regulatory scheme imposed on investment companies under the Investment Company Act, and we could be required to restructure our activities. This would have a material adverse effect on our financial performance and the market price of our securities.
Actions of the U.S. government, including the U.S. Congress, Federal Reserve, U.S. Treasury and other governmental and regulatory bodies, to stabilize or reform the financial markets, or market responses to those actions, may not achieve the intended effect and may adversely affect our business.
The U.S government, including the U.S. Congress, the Federal Reserve, the U.S Treasury and other governmental and regulatory bodies have increased their focus on the regulation of the financial industry in recent years. New or modified regulations and related regulatory guidance may have unforeseen or unintended adverse effects on the financial industry. Laws, regulations or policies, including tax laws and accounting standards and interpretations, currently affecting us may change at any time. Regulatory authorities may also change their interpretation of these statutes and regulations. Therefore, our business may also be adversely affected by future changes in laws, regulations, policies or interpretations or regulatory approaches to compliance and enforcement.
Various legislative bodies have also considered altering the existing framework governing creditors' rights and mortgage products including legislation that would result in or allow loan modifications of various sorts. Such legislation may change the operating environment in substantial and unpredictable ways. We cannot predict whether new legislation will be enacted, and if enacted, the effect that it or any regulations would have on our activities, financial condition, or results of operations.
Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for some litigation, which could limit the ability of stockholders to obtain a favorable judicial forum for disputes with our company.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of any duty owed by us or by any director or officer or other employee to us or to our stockholders; (c) any action asserting a claim against us or any
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director or officer or other employee arising pursuant to any provision of the Maryland General Corporation Law or our charter or bylaws; or (d) any action asserting a claim against us or any director or officer or other employee that is governed by the internal affairs doctrine shall be the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division. This forum selection provision may limit the ability of stockholders of our company to obtain a judicial forum that they find favorable for disputes with our company or our directors, officers, employees, if any, or other stockholders.
Item 1b. Unresolved Staff Comments
None.
Item 2. Properties
The Company's principal executive and administrative offices are located at 1114 Avenue of the Americas, New York, NY 10036. Its telephone number and web address are (212) 930-9400 and www.istar.com, respectively. The lease for the Company's principal executive and administrative offices expires in February 2021. The Company's principal regional offices are located in the Atlanta, Georgia; Hartford, Connecticut; San Francisco, California and Los Angeles, California metropolitan areas.
See Item 1—"Net Lease," and "Operating Properties" for a discussion of properties held by the Company for investment purposes and Item 8—"Financial Statements and Supplemental Data—Schedule III," for a detailed listing of such properties.
Item 3. Legal Proceedings
The Company and/or one or more of its subsidiaries is party to various pending litigation matters that are considered ordinary routine litigation incidental to the Company's business as a finance and investment company focused on the commercial real estate industry, including foreclosure-related proceedings. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant's Equity and Related Share Matters
The Company's common stock trades on the New York Stock Exchange ("NYSE") under the symbol "STAR." The Company had 1,632 holders of record of common stock as of February 22, 2019.
Issuer Purchases of Equity Securities
The following table sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the three months ended December 31, 2018.

| Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan | Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans(1)
October 1 to October 31, 2018 | — |  | $ | — |  | — |  | $ | 41,710,022 |
November 1 to November 30, 2018 | — |  | $ | — |  | — |  | $ | 41,710,022 |
December 1 to December 31, 2018 | — |  | $ | — |  | — |  | $ | 41,710,022 |

_______________________________________________________________________________

(1) | We may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans.

Disclosure of Equity Compensation Plan Information

Plans Category |  | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights |  | (b) Weighted-average exercise price of outstanding options, warrants and rights |  | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders-restricted stock awards(1)(2) |  | 597,215 |  |  | N/A |  | 2,574,093 |

_______________________________________________________________________________

(1) | Restricted Stock—The amount shown in column (a) includes 357,414 unvested restricted stock units which may vest in the future based on the employees' continued service to the Company (see Item 8—"Financial Statements and Supplemental Data—Note 14" for a more detailed description of the Company's restricted stock grants). Substantially all of the restricted stock units included in column (a) are required to be settled on a net, after-tax basis (after deducting shares for minimum required statutory withholdings); therefore, the actual number of shares issued will be less than the gross amount of the awards. The amount shown in column (a) also includes 239,801 of common stock equivalents and restricted stock awarded to our non-employee directors in consideration of their service to the Company as directors. Common stock equivalents represent rights to receive shares of common stock at the date the common stock equivalents are settled. Common stock equivalents have dividend equivalent rights beginning on the date of grant. The amount in column (c) represents the aggregate amount of stock options, shares of restricted stock units or other performance awards that could be granted under compensation plans approved by the Company's security holders after giving effect to previously issued awards of stock options, shares of restricted stock units and other performance awards (see Item 8—"Financial Statements and Supplemental Data—Note 14" for a more detailed description of the Company's Long-Term Incentive Plans).

(2) | The amount shown in column (a) does not include a currently indeterminable number of shares that may be issued upon the satisfaction of performance and vesting conditions of awards made under the Company's Performance Incentive Plan ("iPIP") approved by shareholders. In no event may the number of shares issued exceed the amount available in column (c) unless shareholders authorize additional shares (see Item 8—"Financial Statements and Supplemental Data—Note 14" for a more detailed description of iPIP.)

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Item 6. Selected Financial Data
The following table sets forth selected financial data on a consolidated historical basis for the Company. This information should be read in conjunction with the discussions set forth in Item 7—"Management's Discussion and Analysis of Financial Condition and Results of Operations."

|  | For the Years Ended December 31,
|  | 2018 |  | 2017 |  | 2016 |  | 2015 |  | 2014
|  | (In thousands, except per share data and ratios)
OPERATING DATA: |  |  |  |  |  |  |  |  |  |
Operating lease income |  | $ | 208,192 |  |  | $ | 187,684 |  |  | $ | 191,180 |  |  | $ | 211,207 |  |  | $ | 229,672 |
Interest income |  | 97,878 |  |  | 106,548 |  |  | 129,153 |  |  | 134,687 |  |  | 122,704 |
Other income |  | 82,342 |  |  | 188,091 |  |  | 46,514 |  |  | 49,924 |  |  | 77,583 |
Land development revenue |  | 409,710 |  |  | 196,879 |  |  | 88,340 |  |  | 100,216 |  |  | 15,191 |
Total revenue |  | 798,122 |  |  | 679,202 |  |  | 455,187 |  |  | 496,034 |  |  | 445,150 |
Interest expense |  | 183,751 |  |  | 194,686 |  |  | 221,398 |  |  | 224,639 |  |  | 224,483 |
Real estate expense |  | 139,289 |  |  | 147,617 |  |  | 137,522 |  |  | 146,509 |  |  | 162,829 |
Land development cost of sales |  | 350,181 |  |  | 180,916 |  |  | 62,007 |  |  | 67,382 |  |  | 12,840 |
Depreciation and amortization |  | 58,699 |  |  | 49,033 |  |  | 51,660 |  |  | 62,045 |  |  | 70,375 |
General and administrative |  | 92,135 |  |  | 98,882 |  |  | 84,027 |  |  | 81,277 |  |  | 88,287 |
Provision for (recovery of) loan losses |  | 16,937 |  |  | (5,828 | ) |  | (12,514 | ) |  | 36,567 |  |  | (1,714 | )
Impairment of assets(1) |  | 147,108 |  |  | 32,379 |  |  | 14,484 |  |  | 10,524 |  |  | 34,634 |
Other expense |  | 6,040 |  |  | 20,954 |  |  | 5,883 |  |  | 6,374 |  |  | 6,340 |
Total costs and expenses |  | 994,140 |  |  | 718,639 |  |  | 564,467 |  |  | 635,317 |  |  | 598,074 |
Income from sales of real estate |  | 126,004 |  |  | 92,049 |  |  | 105,296 |  |  | 93,816 |  |  | 89,943 |
Income (loss) from operations before earnings from equity method investments and other items |  | (70,014 | ) |  | 52,612 |  |  | (3,984 | ) |  | (45,467 | ) |  | (62,981 | )
Loss on early extinguishment of debt, net |  | (10,367 | ) |  | (14,724 | ) |  | (1,619 | ) |  | (281 | ) |  | (25,369 | )
Earnings (losses) from equity method investments |  | (5,007 | ) |  | 13,015 |  |  | 77,349 |  |  | 32,153 |  |  | 94,905 |
Gain on consolidation of equity method investment(2) |  | 67,877 |  |  | — |  |  | — |  |  | — |  |  | — |
Income (loss) from continuing operations before income taxes |  | (17,511 | ) |  | 50,903 |  |  | 71,746 |  |  | (13,595 | ) |  | 6,555 |
Income tax (expense) benefit |  | (815 | ) |  | 948 |  |  | 10,166 |  |  | (7,639 | ) |  | (3,912 | )
Income (loss) from continuing operations |  | (18,326 | ) |  | 51,851 |  |  | 81,912 |  |  | (21,234 | ) |  | 2,643 |
Income from discontinued operations |  | — |  |  | 4,939 |  |  | 18,270 |  |  | 15,077 |  |  | 13,122 |
Gain from discontinued operations |  | — |  |  | 123,418 |  |  | — |  |  | — |  |  | — |
Net income (loss) |  | (18,326 | ) |  | 180,208 |  |  | 100,182 |  |  | (6,157 | ) |  | 15,765 |
Net (income) loss attributable to noncontrolling interests |  | (13,936 | ) |  | (4,526 | ) |  | (4,876 | ) |  | 3,722 |  |  | 704 |
Net income (loss) attributable to iStar Inc. |  | (32,262 | ) |  | 175,682 |  |  | 95,306 |  |  | (2,435 | ) |  | 16,469 |
Preferred dividends |  | (32,495 | ) |  | (64,758 | ) |  | (51,320 | ) |  | (51,320 | ) |  | (51,320 | )
Net (income) loss allocable to HPU holders and Participating Security holders(3) |  | — |  |  | — |  |  | (14 | ) |  | 1,080 |  |  | 1,129 |
Net income (loss) allocable to common shareholders |  | $ | (64,757 | ) |  | $ | 110,924 |  |  | $ | 43,972 |  |  | $ | (52,675 | ) |  | $ | (33,722 | )
Per common share data(4): |  |  |  |  |  |  |  |  |  |
Income (loss) attributable to iStar Inc. from continuing operations: |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |  |  | $ | (0.79 | ) |  | $ | (0.55 | )
Diluted |  | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |  |  | $ | (0.79 | ) |  | $ | (0.55 | )
Net income (loss) attributable to iStar Inc.: |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |  |  | $ | (0.62 | ) |  | $ | (0.40 | )
Diluted |  | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |  |  | $ | (0.62 | ) |  | $ | (0.40 | )
Dividends declared per common share |  | $ | 0.18 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |

_______________________________________________________________________________

(1) | Refer to "Item 7. - Management's Discussion and Analysis - Our Portfolio" for more information on impairments recognized in 2018.

(2) | Refer to Note 7 for more information on "Gain from consolidation of equity method investment."

(3) | All of the Company's outstanding HPUs were repurchased and retired on August 13, 2015 (see Item 8—"Financial Statements and Supplemental Data—Note 13). Participating Security holders are non-employee directors who hold unvested common stock equivalents and restricted stock awards granted under the Company's Long Term Incentive Plans that are eligible to participate in dividends (see Item 8—"Financial Statements and Supplemental Data—Note 14 and 15).

(4) | See Item 8—"Financial Statements and Supplemental Data—Note 15."

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|  | For the Years Ended December 31,
|  | 2018 |  | 2017 |  | 2016 |  | 2015 |  | 2014
|  | (In thousands, except per share data and ratios)
Weighted average common shares outstanding—basic |  | 67,958 |  |  | 71,021 |  |  | 73,453 |  |  | 84,987 |  |  | 85,031 |
Weighted average common shares outstanding—diluted |  | 67,958 |  |  | 71,021 |  |  | 73,453 |  |  | 84,987 |  |  | 85,031 |
Cash flows from (used in): |  |  |  |  |  |  |  |  |  |
Operating activities |  | $ | (24,128 | ) |  | $ | 101,543 |  |  | $ | 29,489 |  |  | $ | (57,827 | ) |  | $ | 25,593 |
Investing activities |  | 778,859 |  |  | 263,071 |  |  | 465,028 |  |  | 191,578 |  |  | 130,510 |
Financing activities |  | (457,939 | ) |  | (41,480 | ) |  | (877,655 | ) |  | 112,185 |  |  | (227,096 | )

|  | As of December 31,
|  | 2018 |  | 2017 |  | 2016 |  | 2015 |  | 2014
|  | (In thousands)
BALANCE SHEET DATA: |  |  |  |  |  |  |  |  |  |
Total real estate(1) |  | $ | 1,793,570 |  |  | $ | 1,350,619 |  |  | $ | 1,624,805 |  |  | $ | 1,776,890 |  |  | $ | 1,987,843 |
Land and development, net(1) |  | 598,218 |  |  | 860,311 |  |  | 945,565 |  |  | 1,001,963 |  |  | 978,962 |
Loans receivable and other lending investments, net |  | 988,224 |  |  | 1,300,655 |  |  | 1,450,439 |  |  | 1,601,985 |  |  | 1,377,843 |
Total assets |  | 5,014,277 |  |  | 4,731,078 |  |  | 4,825,514 |  |  | 5,597,792 |  |  | 5,426,483 |
Debt obligations, net |  | 3,609,086 |  |  | 3,476,400 |  |  | 3,389,908 |  |  | 4,118,823 |  |  | 3,986,034 |
Total equity(2) |  | 1,064,115 |  |  | 914,249 |  |  | 1,059,684 |  |  | 1,101,330 |  |  | 1,248,348 |

_______________________________________________________________________________

(1) | Prior to December 31, 2015, land and development assets were recorded in total real estate. Prior year amounts have been reclassified to conform to the current period presentation.

(2) | Total equity includes $201.1 million of noncontrolling interests as of December 31, 2018.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This discussion summarizes the significant factors affecting our consolidated operating results, financial condition and liquidity during the three-year period ended December 31, 2018. This discussion should be read in conjunction with our consolidated financial statements and related notes for the three-year period ended December 31, 2018 included elsewhere in this Annual Report on Form 10-K. These historical financial statements may not be indicative of our future performance. Certain prior year amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation.
Executive Overview
Capital remained cheap and plentiful in most traditional lending sectors of the commercial real estate markets in 2018, and we expect such dynamics to continue in 2019. In addition, interest rates and the equity markets have recently experienced volatility. We have taken a cautious approach in these conditions, focusing on providing capital to customers with whom we have a pre-existing relationship, originating fewer traditional loans, and aggressively seeking to monetize legacy assets.
Consistent with our historical approach of offering differentiated capital where we believe we can capture better risk-adjusted returns, we have invested, and intend to continue to invest, more of our capital and resources in the Ground Lease business. In January 2019, we expanded our relationship with SAFE through an additional $250.0 million equity investment and an amendment of our management agreement with SAFE that gives us greater protection against a termination of the agreement, and incentivizes us to grow SAFE's portfolio. We have also pursued and will continue to pursue joint transactions with SAFE, such as offering customers a SAFE Ground Lease and an iStar leasehold loan.
In July 2018, we entered into Net Lease Venture II with total capital commitments of $526 million and an investment strategy similar to the Net Lease Venture. We have an equity interest in the new venture of approximately 51.9% and are responsible for managing the venture in exchange for management and incentive fees.
We continue to work on monetizing, repositioning or redeveloping our legacy portfolio, which includes transitional operating properties and land and development assets. For the year ended December 31, 2018, we received proceeds of $735.6 million from legacy assets and recognized $137.8 million of aggregate gains, net of noncontrolling interests. Under the guidance of a new President of Land and Development hired in 2018, we intend to accelerate the monetization of additional legacy assets, including several larger assets, in order to allow us to focus additional capital and resources on new investments, particularly in the Ground Lease business. The reevaluation of our expected holding period and the expected cash flows for certain of the legacy assets resulted in our recognizing material impairments in 2018, offsetting the gains referenced above.
For the year ended December 31, 2018, we recorded a net loss allocable to common shareholders of $64.8 million, compared to net income of $110.9 million during the prior year. Adjusted income allocable to common shareholders for the year ended December 31, 2018 was $222.3 million, compared to $214.6 million during the prior year (see "Adjusted Income" for a reconciliation of adjusted income to net income).
As of December 31, 2018, we had $931.8 million of cash and $325.0 million of credit facility availability. Subsequent to December 31, 2018, we invested $250.0 million in SAFE and have called the $375.0 million remaining outstanding principal amount of our 5.0% senior notes due 2019 for redemption. We have no other debt maturities in 2019. We expect to use our unrestricted cash balance primarily to fund future investment activities and for general working capital needs.
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Portfolio Overview
As of December 31, 2018, based on our gross book value, including the carrying value of our equity method investments exclusive of accumulated depreciation, our total investment portfolio has the following characteristics:
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As of December 31, 2018, based on carrying values exclusive of accumulated depreciation and general loan loss reserves, our total investment portfolio has the following property/collateral type and geographic characteristics ($ in thousands):

Property/Collateral Types |  | Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land & Development |  | Total |  | % of Total
Office / Industrial |  | $ | 67,924 |  |  | $ | 1,191,980 |  |  | $ | 110,679 |  |  | $ | — |  |  | $ | 1,370,583 |  |  | 32.7 | %
Land and Development |  | 96,140 |  |  | — |  |  | — |  |  | 672,198 |  |  | 768,338 |  |  | 18.4 | %
Entertainment / Leisure |  | — |  |  | 712,220 |  |  | 14,871 |  |  | — |  |  | 727,091 |  |  | 17.4 | %
Hotel |  | 248,855 |  |  | — |  |  | 47,468 |  |  | — |  |  | 296,323 |  |  | 7.1 | %
Mixed Use / Mixed Collateral |  | 215,719 |  |  | — |  |  | 76,673 |  |  | — |  |  | 292,392 |  |  | 7.0 | %
Condominium |  | 159,075 |  |  | — |  |  | 20,551 |  |  | — |  |  | 179,626 |  |  | 4.3 | %
Ground Leases |  | — |  |  | 172,178 |  |  | — |  |  | — |  |  | 172,178 |  |  | 4.1 | %
Multifamily |  | 139,087 |  |  | — |  |  | 29,189 |  |  | — |  |  | 168,276 |  |  | 4.0 | %
Other Property Types |  | 51,113 |  |  | 57,348 |  |  | — |  |  | — |  |  | 108,461 |  |  | 2.6 | %
Retail |  | 23,311 |  |  | — |  |  | 69,472 |  |  | — |  |  | 92,783 |  |  | 2.2 | %
Strategic Investments |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,516 |  |  | 0.2 | %
Total |  | $ | 1,001,224 |  |  | $ | 2,133,726 |  |  | $ | 368,903 |  |  | $ | 672,198 |  |  | $ | 4,183,567 |  |  | 100.0 | %

Geographic Region |  | Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land & Development |  | Total |  | % of Total
Northeast |  | $ | 503,702 |  |  | $ | 624,605 |  |  | $ | 62,824 |  |  | $ | 314,572 |  |  | $ | 1,505,703 |  |  | 36.0 | %
West |  | 147,936 |  |  | 358,007 |  |  | 54,144 |  |  | 102,508 |  |  | 662,595 |  |  | 15.8 | %
Southeast |  | 123,922 |  |  | 300,200 |  |  | 59,341 |  |  | 76,251 |  |  | 559,714 |  |  | 13.4 | %
Mid-Atlantic |  | — |  |  | 401,726 |  |  | 6,300 |  |  | 127,550 |  |  | 535,576 |  |  | 12.8 | %
Southwest |  | 84,249 |  |  | 229,735 |  |  | 128,458 |  |  | 19,780 |  |  | 462,222 |  |  | 11.0 | %
Central |  | 44,207 |  |  | 212,319 |  |  | 57,836 |  |  | 31,537 |  |  | 345,899 |  |  | 8.3 | %
Various |  | 97,208 |  |  | 7,134 |  |  | — |  |  | — |  |  | 104,342 |  |  | 2.5 | %
Strategic Investments |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,516 |  |  | 0.2 | %
Total |  | $ | 1,001,224 |  |  | $ | 2,133,726 |  |  | $ | 368,903 |  |  | $ | 672,198 |  |  | $ | 4,183,567 |  |  | 100.0 | %

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Industry Segments
The Company has four reportable business segments: Real Estate Finance, Net Lease, Operating Properties and Land and Development. The following describes the Company's reportable segments as of December 31, 2018 ($ in thousands):

| Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land and Development |  | Corporate / Other(1) |  | Total
Real estate, at cost | $ | — |  |  | $ | 1,824,010 |  |  | $ | 252,323 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,076,333 |
Less: accumulated depreciation | — |  |  | (287,516 | ) |  | (17,798 | ) |  | — |  |  | — |  |  | (305,314 | )
Real estate, net | — |  |  | 1,536,494 |  |  | 234,525 |  |  | — |  |  | — |  |  | 1,771,019 |
Real estate available and held for sale | — |  |  | 1,055 |  |  | 21,496 |  |  | — |  |  | — |  |  | 22,551 |
Total real estate | — |  |  | 1,537,549 |  |  | 256,021 |  |  | — |  |  | — |  |  | 1,793,570 |
Land and development, net | — |  |  | — |  |  | — |  |  | 598,218 |  |  | — |  |  | 598,218 |
Loans receivable and other lending investments, net | 988,224 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 988,224 |
Other investments(2) | — |  |  | 165,804 |  |  | 65,643 |  |  | 65,312 |  |  | 7,516 |  |  | 304,275 |
Total portfolio assets | $ | 988,224 |  |  | $ | 1,703,353 |  |  | $ | 321,664 |  |  | $ | 663,530 |  |  | $ | 7,516 |  |  | $ | 3,684,287 |

_______________________________________________________________________________

(1) | Corporate/Other includes certain joint venture and strategic investments that are not included in the other reportable segments. See Item 8—"Financial Statements and Supplemental Data—Note 7" for further detail on these investments.

(2) | The Net Lease segment includes our equity method investment in SAFE. As of December 31, 2018, we owned 7.6 million shares of SAFE's common stock, or 41.8%. On January 2, 2019, we made an additional $250.0 million cash investment in Investor Units of SAFE OP, representing an additional 12.5 million shares of common stock, bringing our total economic interest in SAFE to approximately 65.5%.

Real Estate Finance
Our real estate finance business targets sophisticated and innovative owner/operators of real estate and real estate related projects by providing one-stop capabilities that encompass financing alternatives ranging from full envelope senior loans to mezzanine and preferred equity capital positions. The Company's real estate finance portfolio consists of senior mortgage loans that are secured by commercial and residential real estate assets where the Company is the first lien holder, subordinated mortgage loans that are secured by second lien or junior interests in commercial and residential real estate assets, leasehold loans to Ground Lease tenants, including tenants of SAFE, and corporate/partnership loans, which represent mezzanine or subordinated loans to entities for which the Company does not have a lien on the underlying asset, but may have a pledge of underlying equity ownership of such assets. The Company's real estate finance portfolio includes loans on stabilized and transitional properties, Ground Leases and ground-up construction projects. In addition, the Company has preferred equity investments and debt securities classified as other lending investments.
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The Company's real estate finance portfolio included the following ($ in thousands):

| As of December 31,
| 2018 |  | 2017
| Total |  | % of Total |  | Total |  | % of Total
Performing loans: |  |  |  |  |  |  |
Senior mortgages | $ | 694,025 |  |  | 69.4 | % |  | $ | 709,809 |  |  | 53.9 | %
Corporate/partnership loans | 148,583 |  |  | 14.8 | % |  | 332,387 |  |  | 25.2 | %
Subordinate mortgages | 10,161 |  |  | 1.0 | % |  | 9,495 |  |  | 0.7 | %
Subtotal | 852,769 |  |  | 85.2 | % |  | 1,051,691 |  |  | 79.8 | %
Non-performing loans(1): |  |  |  |  |  |  |
Senior mortgages | 26,329 |  |  | 2.6 | % |  | 32,825 |  |  | 2.5 | %
Corporate/partnership loans | — |  |  | — | % |  | 144,063 |  |  | 10.9 | %
Subtotal | 26,329 |  |  | 2.6 | % |  | 176,888 |  |  | 13.4 | %
Total carrying value of loans | 879,098 |  |  | 87.8 | % |  | 1,228,579 |  |  | 93.2 | %
Other lending investments—securities | 122,126 |  |  | 12.2 | % |  | 89,576 |  |  | 6.8 | %
Total carrying value | 1,001,224 |  |  | 100.0 | % |  | 1,318,155 |  |  | 100.0 | %
General reserve for loan losses | (13,000 | ) |  |  |  | (17,500 | ) |  |  |
Total loans receivable and other lending investments, net | $ | 988,224 |  |  |  |  |  | $ | 1,300,655 |  |  |  |

_______________________________________________________________________________

(1) | Non-performing loans are presented net of asset-specific loan loss reserves of $40.4 million and $61.0 million, respectively, as of December 31, 2018 and 2017.

Portfolio Activity—During the year ended December 31, 2018, the Company invested $511.5 million (including capitalized deferred interest and excluding seller financing originations) in its real estate finance portfolio and received repayments of $860.5 million (including the receipt of previously capitalized deferred interest).
In the second quarter 2018, we resolved a non-performing loan with a carrying value of $145.8 million. We received a $45.8 million cash payment and a preferred equity investment with a face value of $100.0 million that is mandatorily redeemable in five years. We recorded the preferred equity at its fair value of $77.0 million and are accruing interest over the expected duration of the investment. In addition, we recorded a $21.4 million loan loss provision and simultaneously charged-off of the remaining unpaid balance.
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Summary of Interest Rate Characteristics—The Company's loans receivable and other lending investments had the following interest rate characteristics ($ in thousands):

|  | As of December 31,
|  | 2018 |  | 2017
|  | Carrying Value |  | % of Total |  | Weighted Average Accrual Rate |  | Carrying Value |  | % of Total |  | Weighted Average Accrual Rate
Fixed-rate loans and other lending investments |  | $ | 179,122 |  |  | 17.9 | % |  | 7.7 | % |  | $ | 251,185 |  |  | 19.1 | % |  | 9.4 | %
Variable-rate loans(1) |  | 795,772 |  |  | 79.5 | % |  | 6.2 | % |  | 890,082 |  |  | 67.5 | % |  | 8.2 | %
Non-performing loans(2) |  | 26,330 |  |  | 2.6 | % |  | N/A |  |  | 176,888 |  |  | 13.4 | % |  | N/A |
Total carrying value |  | 1,001,224 |  |  | 100.0 | % |  |  |  | 1,318,155 |  |  | 100.0 | % |  |  |
General reserve for loan losses |  | (13,000 | ) |  |  |  |  |  | (17,500 | ) |  |  |  |  |  |
Total loans receivable and other lending investments, net |  | $ | 988,224 |  |  |  |  |  |  | $ | 1,300,655 |  |  |  |  |  |  |

__________________________________________________________________________

(1) | As of December 31, 2018 and 2017, includes $461.3 million and $416.6 million, respectively, of loans with a weighted average LIBOR floor of 1.1% and 0.3%, respectively.

(2) | Non-performing loans are presented net of asset-specific loan loss reserves of $40.4 million and $61.0 million, respectively, as of December 31, 2018 and 2017.

Summary of Maturities—As of December 31, 2018 the Company's loans receivable and other lending investments had the following maturities ($ in thousands):

Year of Maturity(1) |  | Number of Loans Maturing |  | Carrying Value |  | % of Total
2019 |  | 15 |  |  | $ | 516,030 |  |  | 51.5 | %
2020 |  | 6 |  |  | 145,069 |  |  | 14.5 | %
2021 |  | 11 |  |  | 164,188 |  |  | 16.4 | %
2022 |  | — |  |  | — |  |  | — | %
2023 |  | 1 |  |  | 79,606 |  |  | 8.0 | %
2024 and thereafter |  | 5 |  |  | 70,001 |  |  | 7.0 | %
Total performing loans and other lending investments |  | 38 |  |  | $ | 974,894 |  |  | 97.4 | %
Non-performing loans(2) |  | 3 |  |  | 26,330 |  |  | 2.6 | %
Total carrying value |  | 41 |  |  | $ | 1,001,224 |  |  | 100.0 | %
General reserve for loan losses |  |  |  |  | (13,000 | ) |  |  |
Total loans receivable and other lending investments, net |  |  |  |  | $ | 988,224 |  |  |  |

_______________________________________________________________________________

(1) | Year of maturity represents the initial maturity and does not include any extension options. As of December 31, 2018, our real estate finance portfolio had a weighted average remaining term, exclusive of any borrower extension options, of 2.5 years.

(2) | Non-performing loans are presented net of asset-specific loan loss reserves of $40.4 million.

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The tables below summarize our loan portfolio, excluding securities, and the reserves for loan losses associated with our loan portfolio ($ in thousands):

| December 31, 2018
| Number |  | Gross Carrying Value |  | Reserve for Loan Losses |  | Carrying Value |  | % of Total |  | Reserve for Loan Losses as a % of Gross Carrying Value
Performing loans | 35 |  |  | $ | 852,768 |  |  | $ | (13,000 | ) |  | $ | 839,768 |  |  | 97.0% |  | 1.5%
Non-performing loans | 3 |  |  | 66,725 |  |  | (40,395 | ) |  | 26,330 |  |  | 3.0% |  | 60.5%
Total | 38 |  |  | $ | 919,493 |  |  | $ | (53,395 | ) |  | $ | 866,098 |  |  | 100.0% |  | 5.8%
| December 31, 2017
| Number |  | Gross Carrying Value |  | Reserve for Loan Losses |  | Carrying Value |  | % of Total |  | Reserve for Loan Losses as a % of Gross Carrying Value
Performing loans | 36 |  |  | $ | 1,051,691 |  |  | $ | (17,500 | ) |  | $ | 1,034,191 |  |  | 85.4% |  | 1.7%
Non-performing loans | 5 |  |  | 237,877 |  |  | (60,989 | ) |  | 176,888 |  |  | 14.6% |  | 25.6%
Total | 41 |  |  | $ | 1,289,568 |  |  | $ | (78,489 | ) |  | $ | 1,211,079 |  |  | 100.0% |  | 6.1%

Performing Loans—The table below summarizes our performing loans gross of reserves ($ in thousands):

| December 31, 2018 |  | December 31, 2017
Senior mortgages | $ | 694,025 |  |  | $ | 709,809 |
Corporate/Partnership loans | 148,583 |  |  | 332,387 |
Subordinate mortgages | 10,160 |  |  | 9,495 |
Total | $ | 852,768 |  |  | $ | 1,051,691 |
Weighted average LTV | 63 | % |  | 67 | %
Yield | 9.2 | % |  | 9.8 | %

Non-Performing Loans—We designate loans as non-performing at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt. As of December 31, 2018, we had non-performing loans with an aggregate carrying value of $26.3 million compared to non-performing loans with an aggregate carrying value of $176.9 million as of December 31, 2017. In the second quarter 2018, we resolved a non-performing loan with a carrying value of $145.8 million. We received a $45.8 million cash payment and a preferred equity investment with a face value of $100.0 million that is mandatorily redeemable in five years. We recorded the preferred equity at its fair value of $77.0 million and are accruing interest over the expected duration of the investment. In addition, we recorded a $21.4 million loan loss provision and simultaneously charged-off of the remaining unpaid balance. We expect that our level of non-performing loans will fluctuate from period to period.
Reserve for Loan Losses—The reserve for loan losses was $53.4 million as of December 31, 2018, or 5.8% of total loans, compared to $78.5 million or 6.1% as of December 31, 2017. For the year ended December 31, 2018, the provision for loan losses included a $21.4 million provision resulting from the resolution of a non-performing loan partially offset by a $4.5 million decrease in the general reserve. We expect that our level of reserve for loan losses will fluctuate from period to period. Due to the volatility of the commercial real estate market, the process of estimating collateral values and reserves requires the use of significant judgment. We currently believe there is adequate collateral and reserves to support the carrying values of the loans.
The reserve for loan losses includes an asset-specific component and a formula-based component. An asset-specific reserve is established for an impaired loan when the estimated fair value of the loan's collateral less costs to sell is lower than the carrying value of the loan. As of December 31, 2018, asset-specific reserves decreased to $40.4 million compared to $61.0 million as of December 31, 2017.
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The formula-based general reserve is derived from estimated principal default probabilities and loss severities applied to groups of performing loans based upon risk ratings assigned to loans with similar risk characteristics during our quarterly loan portfolio assessment. During this assessment, we perform a comprehensive analysis of our loan portfolio and assign risk ratings to loans that incorporate management's current judgments and future expectations about their credit quality based on all known and relevant factors that may affect collectability. We consider, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. We estimate loss rates based on historical realized losses experienced within our portfolio and take into account current economic conditions affecting the commercial real estate market when establishing appropriate time frames to evaluate loss experience.
The general reserve decreased to $13.0 million or 1.5% of performing loans as of December 31, 2018, compared to $17.5 million or 1.7% of performing loans as of December 31, 2017. The decrease was primarily attributable to a decrease in the size of our loan portfolio.
Net Lease
Our net lease business seeks to create stable cash flows through long-term net leases primarily to single tenants on our properties. We target mission-critical facilities leased on a long-term basis to tenants, offering structured solutions that combine our capabilities in underwriting, lease structuring, asset management and build-to-suit construction. Leases typically provide for expenses at the facility to be paid by the tenant on a triple net lease basis. Under a typical net lease agreement, the tenant agrees to pay a base monthly operating lease payment and most or all of the facility operating expenses (including taxes, utilities, maintenance and insurance). The Company generally intends to hold its net lease assets for long-term investment. However, the Company may dispose of assets if it deems the disposition to be in the Company's best interests.
The net lease segment includes the Company's traditional net lease investments and its investment in SAFE.
Net Lease Venture—In 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets and gave a right of first refusal to the venture on all new net lease investments that met specified investment criteria (refer to Note 7 in our consolidated financial statements for more information on our Net Lease Venture). The Net Lease Venture's investment period expired on June 30, 2018 and the remaining term of the venture extends through February 13, 2022, subject to two, one-year extension options at the discretion of us and our partner. We obtained control over the Net Lease Venture when the investment period expired on June 30, 2018 and consolidated the assets and liabilities of the venture, which had previously been accounted for as an equity method investment.
Net Lease Venture II—In July 2018, we entered into Net Lease Venture II with similar investment strategies as the Net Lease Venture (refer to Note 7). The Net Lease Venture II has a right of first offer on all new net lease investments (excluding Ground Leases) originated by us. We have an equity interest in the new venture of approximately 51.9%, which is accounted for as an equity method investment, and are responsible for managing the venture in exchange for a management fee and incentive fee.
SAFE—In April 2017, institutional investors acquired a controlling interest in our Ground Lease business through the merger of one of our subsidiaries and related transactions. Our Ground Lease business was a component of our net lease segment and consisted of 12 properties subject to long-term net leases including seven Ground Leases and one master lease (covering five properties). As a result of the Acquisition Transactions, we deconsolidated the 12 properties and the associated financing. We account for our investment in SAFE as an equity method investment (refer to Note 7). We are SAFE's external manager, and we have an exclusivity agreement with SAFE pursuant to which we agreed, subject to certain exceptions, that we will not acquire, originate, invest in, or provide financing for a third party’s acquisition of, a Ground Lease unless we have first offered that opportunity to SAFE and a majority of its independent directors has declined the opportunity. As of December 31, 2018, we owned approximately 41.8% of SAFE's common stock outstanding.
On January 2, 2019, we purchased 12,500,000 newly designated limited partnership units (the "Investor Units") in SAFE's operating partnership ("SAFE OP"), at a purchase price of $20.00 per unit, for a total purchase price of $250.0 million. The purpose of the investment was to allow SAFE to fund additional Ground Lease acquisitions and originations.
The Investor Units have the following features:

• | the right to receive equivalent distributions per unit to those paid on one share of SAFE common stock;

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• | no voting rights;

• | non-transferable prior to June 30, 2019;

• | no automatic conversion or exchange rights; and

• | limited protective consent rights.

SAFE has agreed to seek stockholder approval to exchange the Investor Units for shares of SAFE common stock, on a one-for-one basis.
The Investor Units represent an approximate 40.6% fully diluted economic interest in SAFE. After giving effect to the issuance of the Investor Units, our aggregate fully diluted economic interest in SAFE (including the shares of SAFE common stock and Investor Units owned by us) is approximately 65.4%; however, our voting power in SAFE will remain capped at 41.9%, as a result of the limitations described below.
In connection with our purchase of the Investor Units, we entered into a Stockholder's Agreement with SAFE on January 2, 2019. The Stockholder's Agreement:

• | limits our discretionary voting power to 41.9% of the outstanding voting power of SAFE's Common Stock until our aggregate ownership of SAFE common stock is less than 41.9%;

• | requires us to cast all of our voting power in favor of three director nominees to SAFE's board who are independent of each of us and SAFE for three years;

• | subjects us to certain standstill provisions for two years;

• | restricts our ability to transfer shares of SAFE common stock issued in exchange for Investor Units, or "Exchange Shares," for one year after their issuance;

• | prohibits us from transferring shares of SAFE common stock representing more than 20% of the outstanding SAFE common stock in one transaction or a series of related transactions to any person or group, other than pursuant to a widely distributed public offering, unless SAFE's other stockholders have participation rights in the transaction; and

• | provides us certain preemptive rights.

In connection with the new investment, SFTY Manager LLC (our wholly-owned subsidiary) and SAFE amended and restated the Management Agreement, dated as of June 27, 2017, between them, the "Amended and Restated Management Agreement". The Amended and Restated Management Agreement, dated January 2, 2019, generally provides for incremental increases in the base management fee payable to the manager from a minimum of 1.0% to a maximum of 1.5% of SAFE's Total Equity (as defined in the agreement) as it increases. The management fee will be payable in cash or SAFE common stock, at SAFE's election (as determined by SAFE's independent directors). SAFE common stock issued to pay the management fee will be valued at the greater of $20.00 or a recent volume weighted average market price.
The Amended and Restated Management Agreement will have an initial term through June 30, 2022 during which the agreement is non-terminable, except for certain cause events. After the initial term, the agreement will be automatically renewed for additional one year terms, subject to certain rights of SAFE's independent directors to terminate the agreement based on the manager's materially detrimental long-term performance or, beginning with the seventh annual renewal term after the initial term, unfair management fees that the manager declines to renegotiate. SAFE will be obligated to pay the manager a termination fee equal to three times the annual management fee paid in respect of the last completed fiscal year prior to the termination if, by the time of such termination, SAFE has raised Total Equity of at least $820.0 million since inception, including from us.
In connection with our purchase of the Investor Units, the parties also entered into an Amended and Restated Registration Rights Agreement, dated January 2, 2019, which requires SAFE to, among other things, use commercially reasonable efforts to file a shelf registration statement with the Securities and Exchange Commission providing for resale of all shares of SAFE common stock held by us. The agreement also provides us with certain demand registration rights.
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As of December 31, 2018, our consolidated net lease portfolio totaled $2.0 billion. Our net lease portfolio, including the carrying value of our equity method investments in SAFE and Net Lease Venture II, exclusive of accumulated depreciation, totaled $2.1 billion. The table below provides certain statistics for our net lease portfolio.

|  | Consolidated Real Estate(1) |  | Net Lease Venture II |  | SAFE(2)
Ownership % |  | 100.0 | % |  | 51.9 | % |  | 41.8 | %
Gross book value (millions)(3) |  | $ | 1,961 |  |  | $ | 31 |  |  | $ | 884 |
% Leased |  | 98.8 | % |  | 100.0 | % |  | 100.0 | %
Square feet (thousands) |  | 16,754 |  |  | 169 |  |  | 1,793 |
Weighted average lease term (years)(4) |  | 15.3 |  |  | 10.0 |  |  | 83.4 |
Weighted average yield |  | 8.8 | % |  | 8.2 | % |  |

_______________________________________________________________________________
(1)We own 51.9% of the Net Lease Venture which is consolidated in our GAAP financial statements (refer to Note 4).
(2)On January 2, 2019, we made an additional $250.0 million cash investment in Investor Units of SAFE OP.
(3)Gross book value represents the acquisition cost of real estate and any additional capital invested into the property by us.
(4)Represents the initial maturity and does not include extension options.
Portfolio Activity—On June 30, 2018, we consolidated the Net Lease Venture (refer to Note 7) and recorded $743.6 million to "Real estate, net" on our consolidated balance sheet and recorded a gain of $67.9 million in "Gain on consolidation of equity method investment" in our consolidated statement of operations as a result of the consolidation.
As a result of the adoption of new accounting standards (refer to Note 3), on January 1, 2018, we recorded an increase to retained earnings of $55.5 million, bringing our total gain on the sale of our Ground Lease business to SAFE to approximately $178.9 million. In addition, during the year ended December 31, 2018, we purchased 0.8 million shares of SAFE's common stock for $13.8 million, representing an average cost of $17.92 per share.
We also entered into Net Lease Venture II, which acquired its first investment in December 2018. We contributed $16.4 million to the venture which purchased the asset for $31.2 million.
Also during the year ended December 31, 2018, we acquired two net lease assets for $14.8 million and invested an aggregate $40.2 million of tenant improvements and capital expenditures on our existing net lease assets.
During the year ended December 31, 2018, we recorded an aggregate impairment of $10.4 million on two net lease assets. We recorded a $6.0 million impairment on a property based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties. We also recorded a $4.4 million impairment on a property as we determined our total recovery was less than our carrying value.
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Summary of Lease Expirations—As of December 31, 2018, future lease expirations on the Company's net lease assets, excluding our equity method investments in SAFE and Net Lease Venture II, are as follows ($ in thousands):

Year of Lease Expiration |  | Number of Leases Expiring |  | Annualized In-Place Operating Lease Income |  | % of In-Place Operating Lease Income |  | % of Total Revenue(1) |  | Square Feet of Leases Expiring (in thousands)
2019 |  | 4 |  |  | $ | 4,001 |  |  | 2.3 | % |  | 0.7 | % |  | 254 |
2020 |  | 1 |  |  | 2,228 |  |  | 1.3 | % |  | 0.4 | % |  | 153 |
2021 |  | 1 |  |  | 1,987 |  |  | 1.1 | % |  | 0.4 | % |  | 69 |
2022 |  | 1 |  |  | 7,204 |  |  | 4.1 | % |  | 1.3 | % |  | 484 |
2023 |  | 3 |  |  | 4,657 |  |  | 2.6 | % |  | 0.8 | % |  | 96 |
2024 |  | 1 |  |  | 5,272 |  |  | 3.0 | % |  | 0.9 | % |  | 200 |
2025 |  | 1 |  |  | 7,383 |  |  | 4.2 | % |  | 1.3 | % |  | 410 |
2026 |  | 4 |  |  | 10,020 |  |  | 5.7 | % |  | 1.8 | % |  | 638 |
2027 |  | 2 |  |  | 2,796 |  |  | 1.6 | % |  | 0.5 | % |  | 892 |
2028 |  | 1 |  |  | 1,095 |  |  | 0.6 | % |  | 0.2 | % |  | 104 |
2029 and thereafter |  | 16 |  |  | 129,233 |  |  | 73.5 | % |  | 23.0 | % |  | 13,454 |
Total |  | 35 |  |  | $ | 175,876 |  |  | 100.0 | % |  | 31.3 | % |  | 16,754 |
Weighted average remaining lease term (in years)(2) |  | 15.3 |  |  |  |  |  |  |  |  |  |  |  |

_______________________________________________________________________________

(1) | Reflects the percentage of annualized operating lease income for leases in-place as a percentage of annualized total revenue.

(2) | Represents the initial maturity and does not include extension options.

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Operating Properties
Our operating properties portfolio is comprised of commercial and residential properties, which represent a pool of assets across a broad range of geographies and collateral types including office, retail and hotel properties. The operating properties are primarily part of our legacy portfolio, and generally represent properties that we acquired in foreclosures of loans on which the borrowers defaulted during the financial crisis. The Company generally seeks to reposition or redevelop transitional properties with the objective of maximizing their value through the infusion of capital and/or intensive asset management efforts. Upon stabilization, the Company will generally look to monetize these assets if favorable conditions exist for maximizing value, or if the Company determines that the future prospects of the property indicate that the Company would be better served by disposing of the asset and investing the cash in new assets, paying down debt or otherwise using the cash. The commercial properties within this portfolio include office, retail, hotel and other property types. The residential properties within this portfolio are generally luxury condominium projects located in major U.S. cities where the Company's strategy is to sell individual condominium units through retail distribution channels.
The Company's operating properties portfolio, including equity method investments, included the following ($ in thousands):

|  | Commercial |  | Residential
|  | As of December 31, |  | As of December 31,
|  | 2018 |  | 2017 |  | 2018 |  | 2017
Real estate, at cost |  | $ | 252,323 |  |  | $ | 521,385 |  |  | $ | — |  |  | $ | — |
Less: accumulated depreciation |  | (17,798 | ) |  | (55,137 | ) |  | — |  |  | — |
Real estate, net(1) |  | $ | 234,525 |  |  | $ | 466,248 |  |  | $ | — |  |  | $ | — |
Real estate available and held for sale |  | 945 |  |  | 20,069 |  |  | 20,551 |  |  | 48,519 |
Other investments |  | 65,643 |  |  | 38,761 |  |  | — |  |  | — |
Total portfolio assets |  | $ | 301,113 |  |  | $ | 525,078 |  |  | $ | 20,551 |  |  | $ | 48,519 |

_______________________________________________________________________________

(1) | There are 10 commercial real estate assets in the operating properties segment, of which the largest four properties comprise 83.0% of the segment's carrying value as of December 31, 2018. The remaining six properties have an average carrying value of $6.7 million per property.

As of December 31, 2018, our operating property portfolio, including the carrying value of our equity method investments, exclusive of accumulated depreciation, totaled $368.9 million.
The table below provides certain statistics for our legacy commercial operating property portfolio.

Gross Book Value (in thousands)(1) |  | Properties |  | Yield
$ | 280,464 |  |  | 14 |  | 7.0%

_______________________________________________________________________________

(1) | Gross book value represents the acquisition cost of real estate and any additional capital invested into the property by us.

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Portfolio Activity—We have been aggressively monetizing our operating properties and during the year ended December 31, 2018, we sold 10 commercial operating properties and residential condominiums from other properties for total net sales proceeds of $327.9 million and recognized $81.0 million of gains in "Income from sales of real estate" in our consolidated statement of operations. We recorded aggregate impairments of $71.1 million on five legacy operating properties and $8.9 million of aggregate impairments on residential condominiums sold and unsold units. The impairments included a $47.1 million impairment on an urban regional mall located in Chicago, IL. Since foreclosing on the mall we had been actively working to release vacant spaces and made some progress with national retailers. In the second half of 2018, one of the mall’s two anchor tenants liquidated and closed its store. This triggered the lower alternative rent clauses in the leases of several of the in-line tenants, which led to a significant decline in the mall's income. We continue to seek new tenants for the mall, but based on recent indications received from prospective tenants and the large, anticipated future and ongoing capital commitment required to lease the vacated anchor space and in-line vacancies, in the fourth quarter of 2018 we decided to market the asset for sale. The impairments also included a $23.2 million impairment on an entertainment complex located in Coney Island, NY. We completed construction of the asset in 2016 and hired an operator to program the asset and to provide food and beverage services. While the project initially produced positive cash flow, operating performance significantly deteriorated during 2018 and we currently expect the facility to produce losses into the foreseeable future. As a result, we reduced our estimate of the future cash flow to be received from the property. We also invested $19.9 million in our operating properties and made contributions of $29.8 million to our operating property equity method investments.
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The following table presents an operating property portfolio rollforward for the year ended December 31, 2018.

Operating Property Rollforward
(in millions)
| Commercial |  | Residential |  | Other Investments |  | Total Segment
Beginning balance | $ | 486.3 |  |  | $ | 48.5 |  |  | $ | 38.8 |  |  | $ | 573.6 |
Dispositions/distributions(1) | (215.2 | ) |  | (26.3 | ) |  | (20.3 | ) |  | (261.8 | )
Capital expenditures/contributions(2) | 13.0 |  |  | 6.9 |  |  | 29.8 |  |  | 49.7 |
Impairments | (71.7 | ) |  | (8.5 | ) |  | — |  |  | (80.2 | )
Placed into service(3) | 37.4 |  |  | — |  |  | — |  |  | 37.4 |
Other(4) | (0.5 | ) |  | — |  |  | 17.3 |  |  | 16.8 |
Depreciation | (13.9 | ) |  | — |  |  | — |  |  | (13.9 | )
Ending balance | $ | 235.4 |  |  | $ | 20.6 |  |  | $ | 65.6 |  |  | $ | 321.6 |

_______________________________________________________________________

(1) | For commercial and residential, represents net book value of the assets sold, rather than proceeds received. For other investments, represents distributions received by us.

(2) | For other investments, represents contributions made by us.

(3)Represents assets placed into service during the period.

(4) | For other investments, includes a $12.9 million step-up in basis to fair value relating to the disposition of real estate to ventures for which we previously recognized partial gains. Prior to the adoption of ASU 2017-05 (refer to Note 3), we were required to recognize gains on only the portion of our interest transferred to third parties and were precluded from recognizing a gain on our retained noncontrolling interest, which was carried at our historical cost basis.

As of December 31, 2018, future lease expirations on commercial properties within the operating properties portfolio, excluding hotels, marinas and other investments, were as follows ($ in thousands):

Year of Lease Expiration |  | Number of Leases Expiring |  | Annualized In-Place Operating Lease Income |  | % of In-Place Operating Lease Income |  | % of Total Revenue(1) |  | Square Feet of Leases Expiring (in thousands)
2019(2) |  | 107 |  |  | $ | 2,568 |  |  | 16.3 | % |  | 0.5 | % |  | 167
2020 |  | 26 |  |  | 1,399 |  |  | 8.9 | % |  | 0.2 | % |  | 46
2021 |  | 16 |  |  | 998 |  |  | 6.3 | % |  | 0.2 | % |  | 27
2022 |  | 21 |  |  | 1,008 |  |  | 6.4 | % |  | 0.2 | % |  | 45
2023 |  | 8 |  |  | 982 |  |  | 6.2 | % |  | 0.2 | % |  | 54
2024 |  | 4 |  |  | 981 |  |  | 6.2 | % |  | 0.2 | % |  | 120
2025 |  | 6 |  |  | 1,220 |  |  | 7.7 | % |  | 0.2 | % |  | 40
2026 |  | 9 |  |  | 1,657 |  |  | 10.5 | % |  | 0.3 | % |  | 238
2027 |  | 38 |  |  | 3,977 |  |  | 25.2 | % |  | 0.8 | % |  | 69
2028 |  | 7 |  |  | 980 |  |  | 6.3 | % |  | 0.2 | % |  | 36
2029 and thereafter |  | — |  |  | — |  |  | — | % |  | — | % |  | 0
Total |  | 242 |  |  | $ | 15,770 |  |  | 100.0 | % |  | 3.0 | % |  | 842 |
Weighted average remaining lease term (in years) |  | 5.1 |  |  |  |  |  |  |  |  |  |  |  |

_______________________________________________________________________________

(1) | Reflects the percentage of annualized operating lease income for leases in-place as a percentage of annualized total revenue.

(2) | Includes office leases expiring in commercial properties as well as month-to-month and short term license agreements within our retail properties.

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Land and Development
As of December 31, 2018, the Company's land and development portfolio, including equity method investments, included 24 properties, comprised of five MPCs, 13 infill land parcels and six waterfront land parcels located throughout the United States. MPCs represent large-scale residential projects that the Company has and/or will entitle, plan and/or develop and may sell through retail channels to home builders or in bulk. The remainder of the Company’s land includes infill and waterfront parcels located in and around major cities that the Company will develop, sell to or partner with commercial real estate developers. Waterfront parcels are generally entitled for residential projects and urban infill parcels are generally entitled for mixed-use projects. The land and development properties are primarily part of our legacy portfolio and generally represent properties that we acquired in foreclosures of loans on which the borrowers defaulted during the financial crisis. Similar to our legacy operating properties, we have been actively reviewing our legacy land and development properties and seeking to monetize assets when we believe the proceeds generated from sale can be better deployed in new investments and/or used to repay debt or for other purposes. We have decided to continue to hold and develop other projects in cases where we believe the potential future returns outweigh the benefits of selling the assets now.
As of December 31, 2018, we had four projects in production, seven in development and 13 in the pre-development phase. These projects are collectively entitled for approximately 9,200 lots and units. The Company's land and development portfolio included the following ($ in thousands):

|  | As of December 31,
|  | 2018 |  | 2017
Land and development, net |  | $ | 598,218 |  |  | $ | 860,311 |
Other investments |  | 65,312 |  |  | 63,855 |
Total |  | $ | 663,530 |  |  | $ | 924,166 |

Portfolio Activity—During the year ended December 31, 2018, we sold land parcels and residential lots and units and recognized $409.7 million in "Land development revenue" and $350.2 million in "Land development cost of sales" in our consolidated statement of operations. We recorded aggregate impairments of $56.7 million on five legacy land and development properties. Of the $56.7 million of impairments, approximately $25.0 million relates to a waterfront land and development asset located in Long Beach, NY. In 2014, as part of the settlement of litigation with the city, we received entitlements to develop a higher density project than was as-of-right under current zoning. We intended to build or joint venture the project and sought a tax abatement in order to move forward with the development. In 2018, the city revoked its previously approved increased zoning and revoked our building permits. Several lawsuits were filed and litigation is ongoing. In the fourth quarter 2018, we received written indications of interest from parties interested in acquiring the site from us. Based on these indications, and the desire to mitigate future development risk associated with the asset, we intend to more broadly market the property for sale in 2019. $21.6 million of the impairment relates to a MPC located in Santa Clarita, CA. During 2018, we hired a local homebuilder as a consultant to create detailed lot development plans and budgets for the site. Based on the review, which was concluded in the fourth quarter 2018, an evaluation of the estimated capital needed to develop the project, the expected four to five year period to develop and sell the lots and market risks over that time horizon, we decided to market the property for sale as is rather than develop the property. The balance of the impairments relates to three smaller properties, one property that was sold in 2018, one property that was sold in 2019 and one property where we reduced our expectations for future cash flows from the property.
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The following table presents a land and development portfolio rollforward for the year ended December 31, 2018 and certain land and development statistics.

Land and Development Portfolio Rollforward
(in millions)
| Asbury Ocean Club |  | Asbury Park Waterfront |  | Magnolia Green |  | All Others |  | Total Segment
Beginning balance(1) | $ | 58.9 |  |  | $ | 81.6 |  |  | $ | 110.8 |  |  | $ | 609.0 |  |  | $ | 860.3 |
Asset sales(2) | — |  |  | (3.2 | ) |  | (18.3 | ) |  | (289.7 | ) |  | (311.2 | )
Placed into service(3) | — |  |  | (9.9 | ) |  | — |  |  | (22.9 | ) |  | (32.8 | )
Capital expenditures | 106.5 |  |  | 6.4 |  |  | 17.8 |  |  | 13.8 |  |  | 144.5 |
Other(4) | — |  |  | (0.2 | ) |  | (0.8 | ) |  | (61.6 | ) |  | (62.6 | )
Ending balance(1) | $ | 165.4 |  |  | $ | 74.7 |  |  | $ | 109.5 |  |  | $ | 248.6 |  |  | $ | 598.2 |
Net sales(5) | $ | — |  |  | $ | (0.9 | ) |  | $ | (1.8 | ) |  | $ | 62.2 |  |  | $ | 59.5 |

_______________________________________________________________________
(1)As of December 31, 2018 and 2017, Total Segment excludes $65.3 million and $63.9 million, respectively, of equity method investments.

(2) | Represents gross book value of the assets sold, rather than proceeds received. During the year ended December 31, 2018, we received approximately $253.4 million in gross proceeds in connection with the sale of two land parcels totaling 93 acres in San Jose, CA and San Pedro, CA. We also completed the monetization of a 785 acre master planned community entitled for 1,458 single family lots in Riverside County, California.

(3)Represents assets placed into service during the period.
(4)Includes $56.7 million of impairments.
(5)Net sales represents land development revenue less land development cost of sales.
Following is a description of some of our major land and development projects that we are holding for further development. There can be no assurance that we will not change our current strategy for any of the projects described below:
Asbury Ocean Club and Asbury Park Waterfront
iStar owns 35 acres of oceanfront property in the Asbury Park waterfront redevelopment area in Asbury Park, N.J. iStar serves as the master developer and its land holdings represent approximately 70% of the undeveloped land along the waterfront. Over the past several years, iStar has strategically developed a limited number of residential and commercial projects to re-establish the local housing market and drive momentum for future growth. The existing redeveloper agreement with the city permits up to approximately 2,500 additional units, comprised of for-sale residential homes, hotel keys and multi-family apartments. Future projects are positioned to be developed by iStar or in conjunction with joint venture partners. These individual land parcels could also be sold to third party developers.
Asbury Ocean Club is a 16-story mixed-use project comprised of 130 residential condominium units, a 54-unit boutique hotel, 24,000 square feet of retail space, a 15,000 square foot spa, 26,000 square feet of outdoor amenity space and 410 structured parking spaces, located at 1101 Ocean Avenue in Asbury Park, New Jersey. The project is currently under construction and with an estimated completion date of summer 2019.
Magnolia Green
Magnolia Green is a 3,500 unit multi-generational master planned community just outside of Richmond, Virginia with distinct phases designed for people in different life stages, from first home buyers to empty nesters. Built on nearly 1,900 acres, Magnolia Green is a community with home designs from the area's top builders. The community’s amenity package features an 18-hole Jack Nicklaus designed golf course and a full-service golf clubhouse and aquatic center. There is also a tennis facility which is currently under construction.
Magnolia Green sold 166 residential lots for $14.8 million of land development revenue during the year ended December 31, 2018.
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The Company's land and development projects that contributed to revenues during the year ended December 31, 2018 are listed below ($ in thousands):

Project |  | Property Type |  | Location |  | Current Anticipated Sales Completion Date(1) |  | 2018 Revenue |  | Units Sold in 2018(2) |  | Cumulative Units Sold |  | Estimated Remaining Units(2)
Land and development |  |  |  |  |  |  |  |  |  |  |  |  |  |
Highpark |  | Infill Land Parcel |  | San Jose, CA |  | 2018 |  | $ | 151,600 |  |  | N/A |  | N/A |  | N/A
Great Oaks |  | Infill Land Parcel |  | San Pedro, CA |  | 2018 |  | 101,684 |  |  | N/A |  | N/A |  | N/A
Spring Mountain Ranch Phase 2 & 3 |  | MPC |  | Riverside, CA |  | 2018 |  | 73,974 |  |  | 878 |  | 974 |  | —
Naples Reserve |  | MPC |  | Naples, FL |  | 2020 |  | 38,393 |  |  | 325 |  | 689 |  | 394
Magnolia Green |  | MPC |  | Richmond, VA |  | 2026 |  | 14,757 |  |  | 166 |  | 1,151 |  | 1,837
Coney Bath |  | Waterfront |  | Brooklyn, NY |  | 2021 |  | 10,100 |  |  | N/A |  | N/A |  | N/A
Palm Tree |  | Infill Land Parcel |  | Miami, FL |  | 2019 |  | 9,500 |  |  | N/A |  | N/A |  | N/A
Savannah Godley |  | Infill Land Parcel |  | Savannah, GA |  | 2018 |  | 5,500 |  |  | N/A |  | N/A |  | N/A
Asbury Monroe |  | MPC |  | Asbury Park, NJ |  | 2019 |  | 2,532 |  |  | 3 |  | 32 |  | 2
Potomac |  | Infill Land Parcel |  | Ranson, WV |  | 2022 |  | 1,670 |  |  | N/A |  | N/A |  | N/A
Total land and development |  |  |  |  |  | 409,710 |  |  | 1,372 |  |  | 2,846 |  |  | 2,233 |
Land and development equity method investments(3) |  |  |  | Equity in Earnings (Losses) |  | Units Sold in 2018(2) |  | Cumulative Units Sold |  | Estimated Remaining Units(2)
Marina Palms(4) |  | Waterfront |  | N. Miami Beach, FL |  | 2019 |  | 3,221 |  |  | 11 |  | 444 |  | 24
Other land and development equity method investments |  | Various |  | Various |  | Various |  | (6,331 | ) |  | N/A |  | N/A |  | N/A
Total land and development equity method investments |  |  |  | (3,110 | ) |  | 11 |  |  | 444 |  |  | 24 |
Total Land and Development Projects Contributing to Earnings |  | $ | 406,600 |  |  | 1,383 |  |  | 3,290 |  |  | 2,257 |

_______________________________________________________________________________

(1) | Current anticipated completion dates are subject to change as a result of factors that may be outside of the Company's control, such as economic conditions, uncertainty with rezoning, obtaining governmental permits and approvals, concerns of community associations and reliance on third party contractors.

(2) | Units sold in 2018 excludes bulk land parcel sales. Estimated remaining units may include single-family lots, condos, multifamily rental units and hotel keys, as applicable, for the respective properties and are subject to change.

(3) | These land and development projects are accounted for under the equity method of accounting.

(4) | Sales activity is the result of percentage of completion accounting at the venture during the year ended December 31, 2018.

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Results of Operations for the Year Ended December 31, 2018 compared to the Year Ended December 31, 2017

| For the Years Ended December 31, |  |  |  |
| 2018 |  | 2017 |  | $ Change |  | % Change
| (in thousands) |  |
Operating lease income | $ | 208,192 |  |  | $ | 187,684 |  |  | $ | 20,508 |  |  | 11 | %
Interest income | 97,878 |  |  | 106,548 |  |  | (8,670 | ) |  | (8 | )%
Other income | 82,342 |  |  | 188,091 |  |  | (105,749 | ) |  | (56 | )%
Land development revenue | 409,710 |  |  | 196,879 |  |  | 212,831 |  |  | >100% |
Total revenue | 798,122 |  |  | 679,202 |  |  | 118,920 |  |  | 18 | %
Interest expense | 183,751 |  |  | 194,686 |  |  | (10,935 | ) |  | (6 | )%
Real estate expenses | 139,289 |  |  | 147,617 |  |  | (8,328 | ) |  | (6 | )%
Land development cost of sales | 350,181 |  |  | 180,916 |  |  | 169,265 |  |  | 94 | %
Depreciation and amortization | 58,699 |  |  | 49,033 |  |  | 9,666 |  |  | 20 | %
General and administrative | 92,135 |  |  | 98,882 |  |  | (6,747 | ) |  | (7 | )%
Provision for (recovery of) loan losses | 16,937 |  |  | (5,828 | ) |  | 22,765 |  |  | >(100%) |
Impairment of assets | 147,108 |  |  | 32,379 |  |  | 114,729 |  |  | >100% |
Other expense | 6,040 |  |  | 20,954 |  |  | (14,914 | ) |  | (71 | )%
Total costs and expenses | 994,140 |  |  | 718,639 |  |  | 275,501 |  |  | 38 | %
Income from sales of real estate | 126,004 |  |  | 92,049 |  |  | 33,955 |  |  | 37 | %
Loss on early extinguishment of debt, net | (10,367 | ) |  | (14,724 | ) |  | 4,357 |  |  | (30 | )%
Earnings (losses) from equity method investments | (5,007 | ) |  | 13,015 |  |  | (18,022 | ) |  | >(100%) |
Gain from consolidation of equity method investment | 67,877 |  |  | — |  |  | 67,877 |  |  | 100 | %
Income tax benefit (expense) | (815 | ) |  | 948 |  |  | (1,763 | ) |  | >(100%) |
Income from discontinued operations | — |  |  | 4,939 |  |  | (4,939 | ) |  | (100 | )%
Gain from discontinued operations | — |  |  | 123,418 |  |  | (123,418 | ) |  | (100 | )%
Net income (loss) | $ | (18,326 | ) |  | $ | 180,208 |  |  | $ | (198,534 | ) |  | >(100%) |

Revenue—Operating lease income, which primarily includes income from net lease assets and commercial operating properties, increased to $208.2 million in 2018 from $187.7 million in 2017. The following tables summarizes our operating lease income by segment ($ in millions).

|  | 2018 |  | 2017 |  | Change
Net Lease(1) |  | $ | 152.0 |  |  | $ | 123.7 |  |  | $ | 28.3 |
Operating Properties(2) |  | 55.7 |  |  | 63.2 |  |  | (7.5 | )
Land and Development |  | 0.5 |  |  | 0.8 |  |  | (0.3 | )
Total |  | $ | 208.2 |  |  | $ | 187.7 |  |  | $ | 20.5 |

______________________________________________________________

(1) | Change primarily due to a $36.9 million increase from the consolidation of the Net Lease Venture and entering into new leases, partially offset by $8.6 million from asset sales.

(2) | Change primarily due to a decrease of $8.9 million due to asset sales, partially offset by an increase of $2.3 million from the net amortization of intangible lease liabilities relating to lease terminations and an operating property placed into service in 2018.

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The following table shows certain same store statistics for our Net Lease and Operating Properties segments. Same store assets are defined as assets we owned on or prior to January 1, 2017 and were in service through December 31, 2018 (Operating lease income in millions).

|  | 2018 |  | 2017
Operating lease income |  |  |  |
Net Lease |  | $ | 109.3 |  |  | $ | 107.1 |
Operating Properties(1) |  | $ | 35.1 |  |  | $ | 36.3 |
Rent per square foot |  |  |  |
Net Lease |  | $ | 10.08 |  |  | $ | 9.99 |
Operating Properties(1) |  | $ | 41.71 |  |  | $ | 34.45 |
Occupancy(2) |  |  |  |
Net Lease |  | 98.1 | % |  | 97.9 | %
Operating Properties |  | 67.3 | % |  | 83.1 | %

______________________________________________________________

(1) | Excludes $2.6 million recognized during the year ended December 31, 2018 in connection with the termination of two leases.

(2) | Occupancy as of December 31, 2018 and 2017.

Interest income decreased to $97.9 million in 2018 from $106.5 million in 2017. The decrease in interest income was due primarily to a decrease in the weighted-average yield of our performing loans, which decreased to 9.2% for 2018 from 9.8% for 2017, principally from the payoff of higher yielding loans in 2018. The average balance of our performing loans was $1.07 billion for 2018 and 2017.
Other income decreased to $82.3 million in 2018 from $188.1 million in 2017. Other income in 2018 consisted primarily of income from our hotel properties, income recognized from the termination of a lease, other ancillary income from our operating properties and interest income earned on our cash balances. Other income in 2017 primarily consisted of interest income and real estate tax reimbursements resulting from the settlement of the Bevard litigation (refer to Note 5), income from our hotel properties and other ancillary income from our operating properties. The decrease in 2018 was related primarily to the Bevard litigation, which resulted in $123.4 million of other income in 2017.
Land development revenue and cost of sales—In 2018, we sold land parcels and residential lots and units and recognized land development revenue of $409.7 million which had associated cost of sales of $350.2 million. In 2017, we sold residential lots and units and one land parcel totaling 1,250 acres and recognized land development revenue of $196.9 million which had associated cost of sales of $180.9 million. The increase in 2018 was primarily the result of two bulk land parcel sales that generated $253.3 million in land development revenue, partially offset by the recognition of $114.0 million in land development revenue in 2017 related to the Bevard litigation.
Costs and expenses—Interest expense decreased to $183.8 million in 2018 from $194.7 million in 2017. The decrease in interest expense was due to the balance of our average outstanding debt, which decreased to $3.52 billion for 2018 from $3.58 billion for 2017. Our weighted average cost of debt was 5.5% for 2018 and 5.6% for 2017. In addition, during the year ended December 31, 2018, we recorded $10.7 million in interest expense as a result of the consolidation of the Net Lease Venture on June 30, 2018, of which we own a 51.9% equity interest.
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Real estate expenses decreased to $139.3 million in 2018 from $147.6 million in 2017. The following table summarizes our real estate expenses by segment ($ in millions).

|  | Year Ended December 31, |  |
|  | 2018 |  | 2017 |  | Change
Operating Properties(1) |  | $ | 80.6 |  |  | $ | 89.7 |  |  | $ | (9.1 | )
Land and Development(2) |  | 41.7 |  |  | 41.2 |  |  | 0.5 |
Net Lease(3) |  | 17.0 |  |  | 16.7 |  |  | 0.3 |
Total |  | $ | 139.3 |  |  | $ | 147.6 |  |  | $ | (1.1 | )

______________________________________________________________

(1) | Change primarily due to a sale of assets, partially offset by new assets beginning operations in 2018.

(2) | Change primarily due to an increase in marketing and other costs associated with launching residential condominium sales, partially offset by asset sales.

(3) | Change primarily due to a $1.9 million increase from the consolidation of the Net Lease Venture, partially offset by asset sales.

Depreciation and amortization increased to $58.7 million in 2018 from $49.0 million for the same period in 2017. The increase in 2018 was primarily due to the consolidation of the Net Lease Venture, partially offset by the sale of net lease and commercial operating properties.
General and administrative expenses decreased to $92.1 million in 2018 from $98.9 million in 2017. We capitalized into our active development projects $1.7 million and $1.8 million of payroll-related costs (including salaries, bonuses, LTIP awards, benefits and taxes) for the years ended December 31, 2018 and 2017, respectively. The following table summarizes our general and administrative expenses for the years ended December 31, 2018 and 2017 (in millions):

|  | Year Ended December 31, |  |
|  | 2018 |  | 2017 |  | Change
Payroll and related costs(1) |  | $ | 50.3 |  |  | $ | 62.0 |  |  | $ | (11.7 | )
Severance costs(2) |  | 5.3 |  |  | — |  |  | 5.3 |
Performance Incentive Plans(3) |  | 15.4 |  | 5.0 |  | 14.9 |  |  | 0.5 |
Occupancy costs |  | 5.2 |  |  | 5.2 |  |  | — |
Public company costs |  | 5.0 |  |  | 6.7 |  |  | (1.7 | )
Other |  | 10.9 |  |  | 10.1 |  |  | 0.8 |
Total |  | $ | 92.1 |  |  | $ | 98.9 |  |  | $ | (6.8 | )

____________________________________________________

(1) | Decrease due to a reduced bonus payout and a reduction in headcount. We reduced our headcount to 166 employees as of December 31, 2018 from 186 employees as of December 31, 2017.

(2) | Represents costs associated with terminated employees.

(3) | Represents the fair value of points issued and change in fair value of the plans during the periods presented. Such amounts may increase or decrease over time until the awards are settled. Please refer to Note 14 - Stock-Based Compensation Plans and Employee Benefits for a description of the Performance Incentive Plans.

The provision for loan losses was $16.9 million in 2018 as compared to a recovery of loan losses of $5.8 million in 2017. The provision for loan losses in 2018 was due to a specific reserve of $21.4 million resulting from the resolution of a non-performing loan, partially offset by a $4.5 million decrease in the general reserve due to a decrease in the size of our loan portfolio. The recovery of loan losses in 2017 resulted from a reduction in the general reserve due to an overall improvement in the risk ratings of our loan portfolio.
In 2018, we recorded impairments of $147.1 million on land and development and real estate assets. Refer to "Management's Discussion and Analysis - Our Portfolio" for more information on such impairments, which resulted primarily from our decision to accelerate the monetization of certain legacy assets, including several larger assets. In 2017, we recorded impairments on land and development and real estate assets totaling $32.4 million. The impairments recorded in 2017 were primarily the result of impairments on land and development assets of $20.5 million resulting from a decrease in expected cash flows on one asset and a change in exit strategy on another asset. We also recorded impairments of $11.9 million on real estate assets due to shifting demand in the local condominium markets and changes in our exit strategy on other real estate assets.
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Other expense decreased to $6.0 million in 2018 from $21.0 million in 2017. The decrease was primarily the result of paying organization and offering costs associated with the initial public offering of SAFE (refer to Note 7) and costs incurred in connection with the repricing of our 2016 Senior Term Loan recorded in 2017.
Income from sales of real estate—Income from sales of real estate increased to $126.0 million in 2018 from $92.0 million in 2017. The following table presents our income from sales of real estate by segment ($ in millions).

|  | 2018 |  | 2017
Operating Properties |  | $ | 81.0 |  |  | $ | 4.5 |
Net Lease |  | 45.0 |  |  | 87.5 |
Total income from sales of real estate |  | $ | 126.0 |  |  | $ | 92.0 |

Loss on early extinguishment of debt, net—In 2018 and 2017, we incurred losses on early extinguishment of debt of $10.4 million and $14.7 million, respectively. In 2018, we incurred losses on early extinguishment of debt resulting from the opportunistic refinancing of a net lease asset which generated $115.5 million of excess proceeds to us, repayments of our 2016 Senior Term Loan prior to its modification, the modification and upsize of our 2016 Senior Term Loan and repayment of senior notes prior to maturity. In 2017, we incurred losses on early extinguishment of debt primarily resulting from repayments of unsecured notes prior to maturity and the repricing of our 2016 Senior Term Loan.
Earnings (losses) from equity method investments—Earnings (losses) from equity method investments decreased to $(5.0) million in 2018 from $13.0 million in 2017. In 2018, we recognized $4.1 million of income related to operations at our Net Lease Venture (which we consolidate as of June 30, 2018), $4.7 million of income from our equity method investment in SAFE and $13.8 million was aggregate losses from our remaining equity method investments, inclusive of a $10.0 million impairment on a non-U.S. equity method investment due to local market conditions and a $6.1 million impairment on a land and development equity method investment due to a change in business strategy. In 2017, we recognized $4.7 million primarily from profit participations on a land development venture, $4.5 million related to operations at our Net Lease Venture, $2.6 million related to sales activity on a land development venture and $1.2 million aggregate income from our remaining equity method investments.
Gain on consolidation of equity method investment—On June 30, 2018, we gained control of the Net Lease Venture when its investment period expired. As a result, on that date we consolidated the assets and liabilities of the venture which had previously been accounted for as an equity method investment. We recorded a gain of $67.9 million as a result of the consolidation.
Income tax (expense) benefit—Income taxes are primarily generated by assets held in our TRS. An income tax expense of$0.8 million was recorded in 2018 and a $0.9 million income tax benefit was recorded in 2017. The income tax expense for 2018 includes federal taxes related to one of our TRS's, state margins taxes and other minimum state franchise taxes. The income tax benefit for 2017 primarily relates to the credit for prior year’s minimum taxes generated in 2015 and 2014 for which we expect to receive refunds from changes made by the Tax Cuts and Jobs Act to the corporate alternative minimum tax.
We also incurred a tax liability in 2017 for $6.1 million of alternative minimum tax imposed at the REIT level. The Tax Cuts and Jobs Act, however, permits us to claim a refundable credit for prior year’s minimum taxes over the next four years. Therefore, we have no net income tax expense or benefit in our consolidated statement of operations at the REIT level for our 2017 tax liability.
Income from discontinued operations—In April 2017, two institutional investors acquired a controlling interest in our ground lease business through the merger of one of our subsidiaries and related transactions. Income from discontinued operations represents the operating results from the properties comprising our ground lease business.
Gain from discontinued operations—In April 2017, two institutional investors acquired a controlling interest in our ground lease business through the merger of one of our subsidiaries and related transactions. We accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of our retained interest in SAFE.
In addition, as a result of the adoption of ASU 2017-05, on January 1, 2018, we recorded an increase to retained earnings of $55.5 million, bringing our aggregate gain on the sale of our Ground Lease business to approximately $178.9 million (refer to Note 7).
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Results of Operations for the Year Ended December 31, 2017 compared to the Year Ended December 31, 2016

| For the Years Ended December 31, |  |  |  |
| 2017 |  | 2016 |  | $ Change |  | % Change
| (in thousands) |  |
Operating lease income | $ | 187,684 |  |  | $ | 191,180 |  |  | $ | (3,496 | ) |  | (2 | )%
Interest income | 106,548 |  |  | 129,153 |  |  | (22,605 | ) |  | (18 | )%
Other income | 188,091 |  |  | 46,514 |  |  | 141,577 |  |  | >100% |
Land development revenue | 196,879 |  |  | 88,340 |  |  | 108,539 |  |  | >100% |
Total revenue | 679,202 |  |  | 455,187 |  |  | 224,015 |  |  | 49 | %
Interest expense | 194,686 |  |  | 221,398 |  |  | (26,712 | ) |  | (12 | )%
Real estate expenses | 147,617 |  |  | 137,522 |  |  | 10,095 |  |  | 7 | %
Land development cost of sales | 180,916 |  |  | 62,007 |  |  | 118,909 |  |  | >100% |
Depreciation and amortization | 49,033 |  |  | 51,660 |  |  | (2,627 | ) |  | (5 | )%
General and administrative | 98,882 |  |  | 84,027 |  |  | 14,855 |  |  | 18 | %
(Recovery of) provision for loan losses | (5,828 | ) |  | (12,514 | ) |  | 6,686 |  |  | (53 | )%
Impairment of assets | 32,379 |  |  | 14,484 |  |  | 17,895 |  |  | >100% |
Other expense | 20,954 |  |  | 5,883 |  |  | 15,071 |  |  | >100% |
Total costs and expenses | 718,639 |  |  | 564,467 |  |  | 154,172 |  |  | 27 | %
Income from sales of real estate | 92,049 |  |  | 105,296 |  |  | (13,247 | ) |  | (13 | )%
Loss on early extinguishment of debt, net | (14,724 | ) |  | (1,619 | ) |  | (13,105 | ) |  | >100% |
Earnings from equity method investments | 13,015 |  |  | 77,349 |  |  | (64,334 | ) |  | (83 | )%
Income tax benefit | 948 |  |  | 10,166 |  |  | (9,218 | ) |  | (91 | )%
Income from discontinued operations | 4,939 |  |  | 18,270 |  |  | (13,331 | ) |  | (73 | )%
Gain from discontinued operations | 123,418 |  |  | — |  |  | 123,418 |  |  | 100 | %
Net income | $ | 180,208 |  |  | $ | 100,182 |  |  | $ | 80,026 |  |  | 80 | %

Revenue—Operating lease income, which primarily includes income from net lease assets and commercial operating properties, decreased to $187.7 million in 2017 from $191.2 million in 2016. The following tables summarizes our operating lease income by segment ($ in millions).

|  | 2017 |  | 2016 |  | Change
Net Lease(1) |  | $ | 123.7 |  |  | $ | 126.2 |  |  | $ | (2.5 | )
Operating Properties(2) |  | 63.2 |  |  | 64.6 |  |  | (1.4 | )
Land and Development |  | 0.8 |  |  | 0.4 |  |  | 0.4 |
Total |  | $ | 187.7 |  |  | $ | 191.2 |  |  | $ | (3.5 | )

______________________________________________________________

(1) | Change primarily due to the sale of assets.

(2) | Change primarily due to the sale of assets partially offset by the execution of new leases.

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The following table shows certain same store statistics for our Net Lease and Operating Properties segments. Same store assets are defined as assets we owned on or prior to January 1, 2016 and were in service through December 31, 2017 (Operating lease income in millions).

|  | 2017 |  | 2016
Operating lease income |  |  |  |
Net Lease |  | $ | 113.7 |  |  | $ | 111.4 |
Operating Properties |  | $ | 46.4 |  |  | $ | 45.2 |
Rent per square foot |  |  |  |
Net Lease |  | $ | 10.26 |  |  | $ | 10.08 |
Operating Properties |  | $ | 24.25 |  |  | $ | 24.50 |
Occupancy(1) |  |  |  |
Net Lease |  | 97.9 | % |  | 97.6 | %
Operating Properties |  | 75.4 | % |  | 72.7 | %

________________________________________

(1) | Occupancy as of December 31, 2017 and 2016.

Interest income decreased to $106.5 million in 2017 from $129.2 million in 2016. The decrease in interest income was due primarily to a decrease in the average balance of our performing loans to $1.07 billion for 2017 from $1.40 billion for 2016. The weighted average yield of our performing loans increased to 9.8% for 2017 from 8.9% for 2016.
Other income increased to $188.1 million in 2017 from $46.5 million in 2016. Other income in 2017 primarily consisted of interest income and real estate tax reimbursements resulting from the settlement of the Bevard litigation (refer to Note 5), income from our hotel properties and other ancillary income from our operating properties. Other income in 2016 consisted of income from our hotel properties, loan prepayment fees and property tax refunds.
Land development revenue and cost of sales—In 2017, we sold residential lots and units and one land parcel totaling 1,250 acres and recognized land development revenue of $196.9 million which had associated cost of sales of $180.9 million. In 2016, we sold residential lots and units and recognized land development revenue of $88.3 million which had associated cost of sales of $62.0 million. The increase in 2017 from 2016 was primarily due to the Bevard litigation (refer to Note 5), which resulted in us recognizing $114.0 million of land development revenue and $106.3 million of land development cost of sales in 2017.
Costs and expenses—Interest expense decreased to $194.7 million in 2017 from $221.4 million in 2016. The decrease in interest expense was due to a decrease in the balance of our average outstanding debt, which decreased to $3.58 billion for 2017 from $4.00 billion for 2016. Our weighted average cost of debt was 5.6% for 2017 and 5.6% for 2016.
Real estate expenses increased to $147.6 million in 2017 from $137.5 million in 2016. The increase was due to expenses for commercial operating properties, which increased to $83.4 million in 2017 from $73.6 million in 2016. This increase was primarily due to an increase in expenses at our hotel properties and expenses incurred at properties impacted by the hurricanes that hit the United States. These increases were partially offset by property sales in 2017 and 2016. Expenses associated with residential units decreased to $6.3 million in 2017 from $8.8 million in 2016 due to unit sales. Expenses for same store commercial operating properties, excluding hotels, increased to $30.9 million in 2017 from $30.2 million in 2016. Expenses for net lease assets decreased to $16.7 million in 2017 from $18.2 million in 2016 primarily due to asset sales. Expenses for same store net lease assets increased to $14.9 million in 2017 from $13.5 million in 2016. Carry costs and other expenses on our land and development assets increased to $41.2 million in 2017 from $37.0 million in 2016.
Depreciation and amortization decreased to $49.0 million in 2017 from $51.7 million for the same period in 2016. The decrease was primarily due to the sale of net lease assets and commercial operating properties in 2017 and 2016.
General and administrative expenses increased to $98.9 million in 2017 from $84.0 million in 2016. The increase was primarily due to an increase in compensation expense related to performance incentive plans.
Recovery of loan losses was $5.8 million in 2017 as compared to a net recovery of loan losses of $12.5 million in 2016. The recovery of loan losses in 2017 resulted from a reduction in the general reserve due to an overall improvement in the risk ratings of our loan portfolio. The net recovery of loan losses in 2016 included recoveries of specific reserves of $13.7 million and a decrease in the general reserve of $12.7 million, partially offset by new specific reserves of $13.9 million.
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In 2017, we recorded impairments of $32.4 million on land and development and real estate assets. The impairments recorded in 2017 were primarily the result of impairments on land and development assets of $20.5 million resulting from a decrease in expected cash flows on one asset and a change in exit strategy on another asset. We also recorded impairments of $11.9 million on real estate assets due to shifting demand in the local condominium markets and changes in our exit strategy on other real estate assets. In 2016, we recorded impairments on real estate assets totaling $14.5 million comprised of $3.8 million on a land asset resulting from a change in business strategy, $5.8 million on residential operating properties resulting from unfavorable local market conditions and $4.9 million on the sale of net lease assets.
Other expense increased to $21.0 million in 2017 from $5.9 million in 2016. The increase was primarily the result of paying organization and offering costs associated with the initial public offering of SAFE (refer to Note 7) and costs incurred in connection with the repricing of our 2016 Senior Term Loan (refer to Note 10) recorded in 2017.
Income from sales of real estate—Income from sales of real estate decreased to $92.0 million in 2017 from $105.3 million in 2016. The following table presents our income from sales of real estate by segment ($ in millions).

|  | 2017 |  | 2016
Net Lease |  | $ | 87.5 |  |  | $ | 21.1 |
Operating Properties |  | 4.5 |  |  | 75.4 |
Land and Development(1) |  | — |  |  | 8.8 |
Total income from sales of real estate |  | $ | 92.0 |  |  | $ | 105.3 |

_______________________________________________________________________________

(1) | During the year ended December 31, 2016, we sold a land and development asset to a newly formed unconsolidated entity in which we own a 50.0% equity interest and recognized a gain on sale of $8.8 million, reflecting our share of the interest sold to a third party.

Loss on early extinguishment of debt, net—In 2017 and 2016, we incurred losses on early extinguishment of debt of $14.7 million and $1.6 million, respectively. In 2017, we incurred losses on early extinguishment of debt primarily resulting from repayments of unsecured notes prior to maturity and the repricing of our 2016 Senior Term Loan. In 2016, we incurred losses on the early extinguishment of debt primarily related to repayments of secured facilities and unsecured notes prior to maturity.
Earnings from equity method investments—Earnings from equity method investments decreased to $13.0 million in 2017 from $77.3 million in 2016. In 2017, we recognized $4.7 million primarily from profit participations on a land development venture, $4.5 million related to operations at our Net Lease Venture, $2.6 million related to sales activity on a land development venture and $1.2 million was aggregate income from our remaining equity method investments. In 2016, we recognized $33.2 million primarily from the sale of an equity method investment in a commercial operating property, we recognized $11.6 million of earnings primarily from the non-callable distribution of non-recourse financing proceeds in excess of our carrying value at one of our land equity method investments, $22.1 million related to sales activity on a land development venture, $3.6 million related to leasing operations at our Net Lease Venture and $6.8 million was aggregate income from our remaining equity method investments.
Income tax (expense) benefit—Income taxes are primarily generated by assets held in our TRS. An income tax benefit of$0.9 million was recorded in 2017 and a $10.2 million income tax benefit was recorded in 2016. The Tax Cuts and Jobs Act eliminated the corporate alternative minimum tax and grants corporations a refundable credit for prior years’ minimum taxes paid. The income tax benefit for 2017 primarily relates to the credit for prior year’s minimum taxes generated in 2015 and 2014 for which we expect to receive refunds from changes made by the Tax Cuts and Jobs Act to the corporate alternative minimum tax. The income tax benefit for 2016 primarily related to taxable losses generated from sales of certain TRS properties.
We also incurred a tax liability in 2017 for $6.1 million of alternative minimum tax imposed at the REIT level. The Tax Cuts and Jobs Act, however, permits us to claim a refundable credit for prior year’s minimum taxes over the next four years. Therefore, we have no net income tax expense or benefit in our consolidated statement of operations at the REIT level for our 2017 tax liability.
Income from discontinued operations—In April 2017, two institutional investors acquired a controlling interest in our ground lease business through the merger of one of our subsidiaries and related transactions. Income from discontinued operations represents the operating results from the properties comprising our ground lease business.
Gain from discontinued operations—In April 2017, two institutional investors acquired a controlling interest in our ground lease business through the merger of one of our subsidiaries and related transactions. We accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of our retained interest in SAFE.
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Adjusted Income
In addition to net income (loss) prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we use adjusted income, a non-GAAP financial measure, to measure our operating performance. Adjusted income is used internally as a supplemental performance measure adjusting for certain non-cash GAAP measures to give management a view of income more directly derived from current period activity. Adjusted income is calculated as net income (loss) allocable to common shareholders, prior to the effect of depreciation and amortization, provision for (recovery of) loan losses, impairment of assets, stock-based compensation expense, the non-cash portion of gain (loss) on early extinguishment of debt and is adjusted for the effect of gains or losses on charge-offs and dispositions on carrying value gross of loan loss reserves and impairments ("Adjusted Income"). In the third quarter 2017, we modified our presentation of Adjusted Income to exclude the effect of the amount of the liquidation preference that was recorded as a premium above book value on the redemption of preferred stock (refer to Note 13) and the imputed non-cash interest expense recognized for the conversion feature of our senior convertible notes (refer to Note 10). Adjusted Income also includes the impact to retained earnings (income that would have been recognized in prior periods had the accounting standards been effective during those prior periods) resulting from the adoption of new accounting standards on January 1, 2018 (refer to Note 3).
Adjusted Income should be examined in conjunction with net income (loss) as shown in our consolidated statements of operations. Adjusted Income should not be considered as an alternative to net income (loss) (determined in accordance with GAAP), or to cash flows from operating activities (determined in accordance with GAAP), as a measure of our liquidity, nor is Adjusted Income indicative of funds available to fund our cash needs or available for distribution to shareholders. Rather, Adjusted Income is an additional measure we use to analyze our business performance because it excludes the effects of certain non-cash charges that we believe are not necessarily indicative of our operating performance while including the effect of gains or losses on investments when realized. It should be noted that our manner of calculating Adjusted Income may differ from the calculations of similarly-titled measures by other companies.

| For the Years Ended December 31,
| 2018 |  | 2017
Adjusted Income |  |  |
Net income (loss) allocable to common shareholders | $ | (64,757 | ) |  | $ | 110,924 |
Add: Depreciation and amortization(1) | 71,359 |  |  | 60,828 |
Add/Less: (Recovery of) provision for loan losses | 16,937 |  |  | (5,828 | )
Add: Impairment of assets(2) | 163,765 |  |  | 32,379 |
Add: Stock-based compensation expense | 17,563 |  |  | 18,812 |
Add: Loss on early extinguishment of debt, net | 4,318 |  |  | 3,065 |
Add: Non-cash interest expense on senior convertible notes | 4,733 |  |  | 1,255 |
Add: Premium on redemption of preferred stock | — |  |  | 16,314 |
Add: Impact from adoption of new accounting standards(3) | 75,869 |  |  | — |
Less: Losses on charge-offs and dispositions(4) | (67,506 | ) |  | (23,130 | )
Adjusted income allocable to common shareholders | $ | 222,281 |  |  | $ | 214,619 |

_______________________________________________________________________________

(1) | Depreciation and amortization also includes our proportionate share of depreciation and amortization expense for equity method investments and excludes the portion of depreciation and amortization expense allocable to noncontrolling interests.

(2) | Impairment of assets also includes impairments on equity method investments recorded in "Earnings from equity method investments" in our consolidated statements of operations.

(3) | Represents an increase to retained earnings on January 1, 2018 upon the adoption of ASU 2017-05 (refer to Note 3).

(4) | Represents the impact of charge-offs and dispositions realized during the period. These charge-offs and dispositions were on assets that were previously impaired for GAAP and reflected in net income but not in Adjusted Income.

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Liquidity and Capital Resources
During the year ended December 31, 2018, we invested $886.0 million in new investments, prior financing commitments and ongoing development. This amount includes $574.0 million in lending and other investments, $138.7 million to develop our land and development assets, $57.5 million of capital to reposition or redevelop our operating properties, $115.7 million to invest in net lease assets and $0.1 million in other investments. Also during the year ended December 31, 2018, we generated $1,579.4 million from loan repayments and asset sales within our portfolio, comprised of $791.2 million from real estate finance, $310.8 million from operating properties, $97.3 million from net lease assets, $378.7 million from land and development assets and $1.4 million from other investments. These amounts are inclusive of fundings and proceeds from both consolidated investments and our pro rata share from equity method investments.
The following table outlines our capital expenditures on operating properties, net lease and land and development assets as reflected in our consolidated statements of cash flows for the years ended December 31, 2018 and 2017, by segment ($ in thousands):

| For the Years Ended December 31,
| 2018 |  | 2017
Operating Properties | $ | 26,016 |  |  | $ | 33,774 |
Net Lease | 34,479 |  |  | 3,293 |
Total capital expenditures on real estate assets | $ | 60,495 |  |  | $ | 37,067 |
Land and Development | $ | 128,543 |  |  | $ | 121,400 |
Total capital expenditures on land and development assets | $ | 128,543 |  |  | $ | 121,400 |

As of December 31, 2018, we had unrestricted cash of $931.8 million. Subsequent to December 31, 2018, we made a $250.0 million cash investment in Investor Units of SAFE OP and we called the remaining $375.0 million aggregate principal balance of our 5.0% senior notes due July 2019 for redemption. Our primary cash uses over the next 12 months are expected to be funding of investments, capital expenditures, repayment of maturing debt and funding ongoing business operations. Over the next 12 months, we currently expect to fund in the range of approximately $100 million to $150 million of capital expenditures within our portfolio. The majority of these amounts relate to our land and development projects and operating properties, and include multifamily and residential development activities which are expected to include approximately $65 million in vertical construction. The amount actually invested will depend on the pace of our development activities as well as the extent to which we strategically partner with others to complete these projects. As of December 31, 2018, we also had approximately $489.3 million of maximum unfunded commitments associated with our investments of which we expect to fund the majority of over the next two years, assuming borrowers and tenants meet all milestones and performance hurdles and all other conditions to fundings (see "Unfunded Commitments" below). We also have $516.0 million carrying amount of scheduled real estate finance maturities over the next 12 months, exclusive of any extension options that can be exercised by our borrowers. Our capital sources to meet cash uses through the next 12 months and beyond are expected to include cash on hand, income from our portfolio, loan repayments from borrowers and proceeds from asset sales.
We cannot predict with certainty the specific transactions we will undertake to generate sufficient liquidity to meet our obligations as they come due. We will adjust our plans as appropriate in response to changes in our expectations and changes in market conditions. While economic trends have stabilized, it is not possible for us to predict whether these trends will continue or to quantify the impact of these or other trends on our financial results. Furthermore, as more fully described in Item 1a. Risk Factors, our ability to incur more debt to create cash liquidity is dependent on our compliance with debt covenants in our unsecured notes and corporate debt facilities.
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Contractual Obligations—The following table outlines the contractual obligations related to our long-term debt obligations, loan participations payable and operating lease obligations as of December 31, 2018 (see Item 8—"Financial Statements and Supplemental Data—Note 10").

| Amounts Due By Period
| Total |  | Less Than 1 Year |  | 1 - 3 Years |  | 3 - 5 Years |  | 5 - 10 Years |  | After 10 Years
| (in thousands)
Long-Term Debt Obligations: |  |  |  |  |  |  |  |  |  |  |
Unsecured notes | $ | 2,112,500 |  |  | $ | 375,000 |  | (1) | $ | 675,000 |  |  | $ | 1,062,500 |  |  | $ | — |  |  | $ | — |
Secured credit facilities | 646,750 |  |  | 6,500 |  |  | 13,000 |  |  | 627,250 |  |  | — |  |  | — |
Mortgages | 802,367 |  |  | 13,292 |  |  | 180,749 |  |  | 66,871 |  |  | 527,428 |  |  | 14,027 |
Trust preferred securities | 100,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 100,000 |
Total principal maturities | 3,661,617 |  |  | 394,792 |  |  | 868,749 |  |  | 1,756,621 |  |  | 527,428 |  |  | 114,027 |
Interest Payable(2) | 771,540 |  |  | 184,398 |  |  | 304,380 |  |  | 150,706 |  |  | 100,470 |  |  | 31,586 |
Loan Participations Payable(3) | 22,642 |  |  | — |  |  | 22,642 |  |  | — |  |  | — |  |  | — |
Operating Lease Obligations | 14,253 |  |  | 4,340 |  |  | 5,605 |  |  | 1,839 |  |  | 2,469 |  |  | — |
Total | $ | 4,470,052 |  |  | $ | 583,530 |  |  | $ | 1,201,376 |  |  | $ | 1,909,166 |  |  | $ | 630,367 |  |  | $ | 145,613 |

_______________________________________________________________________________

(1) | Subsequent to December 31, 2018, we called these notes for redemption on the redemption date of March 7, 2019.

(2) | Variable-rate debt assumes one-month LIBOR of 2.51% and three-month LIBOR of 2.81% that were in effect as of December 31, 2018.

(3) | Refer to Note 9 to the consolidated financial statements.

2017 Secured Financing—In March 2017, the predecessor of SAFE (which at the time was comprised of our wholly-owned subsidiaries conducting our Ground Lease business) entered into a $227.0 million secured financing transaction (the "2017 Secured Financing") that accrued interest at 3.795% and matures in April 2027. The 2017 Secured Financing was collateralized by the 12 properties comprising SAFE's initial portfolio. In April 2017, we derecognized the 2017 Secured Financing when third parties acquired a controlling interest in SAFE's predecessor, prior to SAFE's initial public offering (refer to Note 4).
2016 Senior Term Loan—In June 2016, we entered into a senior term loan of $450.0 million (the "2016 Senior Term Loan"). In August 2016, we upsized the facility to $500.0 million. The initial $450.0 million of the 2016 Senior Term Loan was issued at 99.0% of par and the upsize was issued at par. In September 2017, we reduced, repriced and extended the 2016 Senior Term Loan to $400.0 million priced at LIBOR plus 3.00% with a 0.75% LIBOR floor and maturing in October 2021. In June 2018, the Company increased the 2016 Senior Term Loan to $650.0 million, reduced the interest rate to LIBOR plus 2.75% and extended its maturity to June 2023. The facility was also modified to permit substitution of collateral, subject to overall collateral pool coverage and concentration limits, over the life of the facility. This modification eliminates the mandatory amortization upon payoff or sale of collateral which existed prior to the upsize and broadens the types of collateral permitted under the facility. We may make optional prepayments, subject to prepayment fees, and are required to repay 0.25% of the principal amount each quarter.
2015 Revolving Credit Facility—In March 2015, we entered into our 2015 Revolving Credit Facility. In September 2017, we upsized the 2015 Revolving Credit Facility to $325.0 million, added additional lenders to the syndicate, extended the maturity date to September 2020 and made certain other changes. This facility is secured by a pledge of the equity interest in a pool of assets which provide asset value coverage for borrowings under the facility. Borrowings under this credit facility bear interest at a floating rate indexed to one of several base rates plus a margin which adjusts upward or downward based upon our corporate credit rating. An undrawn credit facility commitment fee ranges from 0.30% to 0.50% based on corporate credit ratings. At maturity, we may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2021. During the year ended December 31, 2018, we repaid from cash on hand the $325.0 million outstanding on the 2015 Revolving Credit Facility and as of December 31, 2018, we had $325.0 million of borrowing capacity available under the 2015 Revolving Credit Facility.
Unsecured Notes—In September 2017, we issued $400.0 million principal amount of 4.625% senior unsecured notes due September 2020, $400.0 million principal amount of 5.25% senior unsecured notes due September 2022 and $250.0 million of 3.125% Convertible Notes due September 2022. Proceeds from these offerings, together with cash on hand, were used to repay in full the $550.0 million principal amount outstanding of the 4.0% senior unsecured notes due November 2017, the $300.0 million principal amount outstanding of the 7.125% senior unsecured notes due February 2018 and the $300.0 million principal amount outstanding of the 4.875% senior unsecured notes due July 2018. In addition, the initial purchasers of the 3.125% Convertible Notes exercised their option to purchase an additional $37.5 million aggregate principal amount of the 3.125% Convertible Notes.
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Collateral Assets—The carrying value of our assets that are directly pledged or are held by subsidiaries whose equity is pledged as collateral to secure our obligations under our secured debt facilities are as follows, by asset type ($ in thousands):

| As of December 31,
| 2018 |  | 2017
| Collateral Assets(1) |  | Non-Collateral Assets |  | Collateral Assets(1) |  | Non-Collateral Assets
Real estate, net | $ | 1,620,008 |  |  | $ | 151,011 |  |  | $ | 795,321 |  |  | $ | 486,710 |
Real estate available and held for sale | 1,055 |  |  | 21,496 |  |  | 20,069 |  |  | 48,519 |
Land and development, net | 12,300 |  |  | 585,918 |  |  | 25,100 |  |  | 835,211 |
Loans receivable and other lending investments, net(2)(3) | 498,524 |  |  | 480,154 |  |  | 194,529 |  |  | 1,021,340 |
Other investments | — |  |  | 304,275 |  |  | — |  |  | 321,241 |
Cash and other assets | — |  |  | 1,329,990 |  |  | — |  |  | 898,252 |
Total | $ | 2,131,887 |  |  | $ | 2,872,844 |  |  | $ | 1,035,019 |  |  | $ | 3,611,273 |

___________________________________________________________

(1) | The 2016 Senior Term Loan and the 2015 Revolving Credit Facility are secured only by pledges of equity of certain of our subsidiaries and not by pledges of the assets held by such subsidiaries. Such subsidiaries are subject to contractual restrictions under the terms of such credit facilities, including restrictions on incurring new debt (subject to certain exceptions). As of December 31, 2018, Collateral Assets includes $403.5 million carrying value of assets held by entities whose equity interests are pledged as collateral for the $325.0 million 2015 Revolving Credit Facility that is undrawn as of December 31, 2018.

(2) | As of December 31, 2018 and 2017, the amounts presented exclude general reserves for loan losses of $13.0 million and $17.5 million, respectively.

(3) | As of December 31, 2018 and 2017, the amounts presented exclude loan participations of $22.5 million and $102.3 million, respectively.

Debt Covenants
Our outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness, as such terms are defined in the indentures governing the debt securities, of at least 1.2 x and a covenant not to incur additional indebtedness (except for incurrences of permitted debt), if on a pro forma basis, our consolidated fixed charge coverage ratio, determined in accordance with the indentures governing our debt securities, is 1.5x or lower. If any of our covenants are breached and not cured within applicable cure periods, the breach could result in acceleration of our debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. If our ability to incur additional indebtedness under the fixed charge coverage ratio is limited, we are permitted to incur indebtedness for the purpose of refinancing existing indebtedness and for other permitted purposes under the indentures.
The 2016 Senior Term Loan and the 2015 Revolving Credit Facility contain certain covenants, including covenants relating to collateral coverage, dividend payments, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the 2016 Senior Term Loan requires us to maintain collateral coverage of at least 1.25 x outstanding borrowings on the facility. The 2015 Revolving Credit Facility is secured by a borrowing base of assets and requires us to maintain both collateral coverage of at least 1.5x outstanding borrowings on the facility and a consolidated ratio of cash flow to fixed charges of at least 1.5x. The 2015 Revolving Credit Facility does not require that proceeds from the borrowing base be used to pay down outstanding borrowings provided the collateral coverage remains at least 1.5x outstanding borrowings on the facility. To satisfy this covenant, we have the option to pay down outstanding borrowings or substitute assets in the borrowing base. We may not pay common dividends if we cease to qualify as a REIT. In June 2018, we amended the terms of the 2016 Senior Term Loan and the 2015 Revolving Credit Facility to include the ability to pay common dividends with no restrictions so long as we are not in default on any of our debt obligations.
Derivatives—Our use of derivative financial instruments is primarily limited to the utilization of interest rate swaps, interest rate caps or other instruments to manage interest rate risk exposure and foreign exchange contracts to manage our risk to changes in foreign currencies. See Item 8—"Financial Statements and Supplemental Data—Note 12" for further details.
Off-Balance Sheet Arrangements—We are not dependent on the use of any off-balance sheet financing arrangements for liquidity. We have made investments in various unconsolidated ventures. See Item 8—"Financial Statements and Supplemental Data—Note 7" for further details of our unconsolidated investments. Our maximum exposure to loss from these investments is limited to the carrying value of our investments and any unfunded commitments (see below).
Unfunded Commitments—We generally fund construction and development loans and build-outs of space in real estate assets over a period of time if and when the borrowers and tenants meet established milestones and other performance criteria. We refer to these arrangements as Performance-Based Commitments. In addition, we have committed to invest capital in several real estate funds and other ventures. These arrangements are referred to as Strategic Investments.
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As of December 31, 2018, the maximum amount of fundings we may be obligated to make under each category, assuming all performance hurdles and milestones are met under the Performance-Based Commitments and assuming 100% of our capital committed to Strategic Investments is drawn down, are as follows (in thousands):

| Loans and Other Lending Investments(1) |  | Real Estate |  | Other Investments |  | Total
Performance-Based Commitments | $ | 436,910 |  |  | $ | 12,610 |  |  | $ | — |  |  | $ | 449,520 |
Strategic Investments | — |  |  | — |  |  | 39,754 |  |  | 39,754 |
Total | $ | 436,910 |  |  | $ | 12,610 |  |  | $ | 39,754 |  |  | $ | 489,274 |

_______________________________________________________________________________

(1) | Excludes $27.4 million of commitments on loan participations sold that are not our obligation.

Stock Repurchase Program—We may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans. During the year ended December 31, 2018, we repurchased 0.8 million shares of our outstanding common stock for $8.3 million, representing an average cost of $10.22 per share. In addition, in connection with the sale of the 3.125% Convertible Notes in September 2017 (refer to Note 10), we repurchased 4.0 million shares of our common stock for $45.9 million, representing an average cost of $11.51 per share in privately negotiated transactions with purchasers of the 3.125% Convertible Notes.
Preferred Equity—In October 2017, we redeemed our Series E and Series F preferred stock at par for the aggregate liquidation preference of $240.0 million plus accrued dividends to the redemption date (refer to Note 13).
Critical Accounting Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses. We have established detailed policies and control procedures intended to ensure that valuation methods, including any judgments made as part of such methods, are well controlled, reviewed and applied consistently from period to period. We base our estimates on historical corporate and industry experience and various other assumptions that we believe to be appropriate under the circumstances. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and, therefore, routinely require adjustment.
During 2018, management reviewed and evaluated these critical accounting estimates and believes they are appropriate. Our significant accounting policies are described in Item 8—"Financial Statements and Supplemental Data—Note 3." The following is a summary of accounting policies that require more significant management estimates and judgments:
Reserve for loan losses—The reserve for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. If we determine that the collateral fair value less costs to sell is less than the carrying value of a collateral-dependent loan, we will record a reserve. The reserve is increased (decreased) through "Provision for (recovery of) loan losses" in our consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower as we work toward a settlement or other alternative resolution, which can impact the potential for loan repayment or receipt of collateral. Our policy is to charge off a loan when we determine, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when we receive cash or other assets in a pre-foreclosure sale or take control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when we have otherwise ceased significant collection efforts. We consider circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related reserve will be charged off. We have one portfolio segment, represented by commercial real estate lending, whereby we utilize a uniform process for determining our reserves for loan losses. The reserve for loan losses includes a general, formula-based component and an asset-specific component.
The general reserve component covers performing loans and reserves for loan losses are recorded when: (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio; and (ii) the amount of the loss can be reasonably estimated. The formula-based general reserve is derived from estimated principal default probabilities and loss severities applied to groups of loans based upon risk ratings assigned to loans with similar risk characteristics during our quarterly loan portfolio assessment. During this assessment, we perform a comprehensive analysis of our loan portfolio and assign risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. We consider, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing
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the lowest risk of loss and "5" representing the highest risk of loss. We estimate loss rates based on historical realized losses experienced within our portfolio and take into account current economic conditions affecting the commercial real estate market when establishing appropriate time frames to evaluate loss experience.
The asset-specific reserve component relates to reserves for losses on impaired loans. We consider a loan to be impaired when, based upon current information and events, we believe that it is probable that we will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on a loan-by-loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices, or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.
Substantially all of our impaired loans are collateral dependent and impairment is measured using the estimated fair value of collateral, less costs to sell. We generally use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In some cases, we obtain external "as is" appraisals for loan collateral, generally when third party participations exist. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. In limited cases, appraised values may be discounted when real estate markets rapidly deteriorate.
A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when we grant a concession to a debtor that is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan.
The provision for (recovery of) loan losses for the years ended December 31, 2018, 2017 and 2016 were $16.9 million, $(5.8) million and $(12.5) million, respectively. The total reserve for loan losses as of December 31, 2018 and 2017, included asset specific reserves of $40.4 million and $61.0 million, respectively, and general reserves of $13.0 million and $17.5 million, respectively.
Acquisition of real estate—We generally acquire real estate assets or land and development assets through purchases or through foreclosure or deed-in-lieu of foreclosure in full or partial satisfaction of non-performing loans. When we acquire assets these properties are classified as "Real estate, net" or "Land and development, net" on our consolidated balance sheets. When we intend to hold, operate or develop the property for a period of at least 12 months, assets are classified as "Real estate, net," and when we intend to market these properties for sale in the near term, assets are classified as "Real estate available and held for sale." When we purchase assets the properties are recorded at cost. Foreclosed assets classified as real estate and land and development are initially recorded at their estimated fair value and assets classified as assets held for sale are recorded at their estimated fair value less costs to sell. The excess of the carrying value of the loan over these amounts is charged-off against the reserve for loan losses. In both cases, upon acquisition, tangible and intangible assets and liabilities acquired are recorded at their estimated fair values.
During the years ended December 31, 2018 and 2016, we received title to properties in satisfaction of mortgage loans with fair values of $4.6 million and $40.6 million, respectively, for which those properties had served as collateral. We did not take title to any properties during the year ended December 31, 2017.
Impairment or disposal of long-lived assets—Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in "Real estate available and held for sale" on our consolidated balance sheets. The difference between the estimated fair value less costs to sell and the carrying value will be recorded as an impairment charge. Impairment for real estate assets are included in "Impairment of assets" in our consolidated statements of operations. Once the asset is classified as held for sale, depreciation expense is no longer recorded.
We periodically review real estate to be held and used and land and development assets for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The asset's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate and land and development assets are recorded in "Impairment of assets" in our consolidated statements of operations.
During the year ended December 31, 2018, we recorded aggregate impairments on real estate and land and development assets of $147.1 million. Refer to "Item 7. Management's Discussion and Analysis - Our Portfolio" for more information on the impairments we recorded during the year ended December 31, 2018. During the year ended December 31, 2017, we recorded
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impairments on real estate and land and development assets totaling $32.4 million. The impairments recorded in 2017 were primarily the result of impairments on land and development assets of $20.5 million resulting from a decrease in expected cash flows on one asset and a change in exit strategy on another asset, and impairments of $11.9 million on real estate assets due to shifting demand in the local condominium markets and changes in our exit strategy on other real estate assets. During the year ended December 31, 2016, we recorded impairments on real estate and land and development assets totaling $14.5 million resulting from unfavorable local market conditions, sales of net lease assets and changes in business strategy for certain assets.
Identified intangible assets and liabilities—We record intangible assets and liabilities acquired at their estimated fair values, and determine whether such intangible assets and liabilities have finite or indefinite lives. As of December 31, 2018, all such acquired intangible assets and liabilities have finite lives. We amortize finite lived intangible assets and liabilities over the period which the assets and liabilities are expected to contribute directly or indirectly to the future cash flows of the business acquired. We review finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If we determine the carrying value of an intangible asset is not recoverable we will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangibles are recorded in "Impairment of assets" in our consolidated statements of operations.
Valuation of deferred tax assets—Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards. We evaluate our ability to realize our deferred tax assets and recognize a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of our deferred tax assets will not be realized. When evaluating our ability to realize our deferred tax assets, we consider, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This analysis is inherently subjective, as it requires us to forecast our business and general economic environment in future periods. Changes in estimate of our ability to realize our deferred tax asset, if any, are included in "Income tax (expense) benefit" in the consolidated statements of operations.
While certain entities with NOLs may generate profits in the future, which may allow us to utilize the NOLs, we continue to record a full valuation allowance on the net deferred tax asset due to the history of losses and the uncertainty of the entities' ability to generate such profits. We recorded a full valuation allowance of $78.1 million and $63.3 million as of December 31, 2018 and 2017, respectively.
Variable interest entities—We evaluate our investments and other contractual arrangements to determine if our interests constitute variable interests in a variable interest entity ("VIE") and if we are the primary beneficiary. There is a significant amount of judgment required to determine if an entity is considered a VIE and if we are the primary beneficiary. We first perform a qualitative analysis, which requires certain subjective decisions regarding our assessment, including, but not limited to, which interests create or absorb variability, the contractual terms, the key decision making powers, impact on the VIE's economic performance and related party relationships. An iterative quantitative analysis is required if our qualitative analysis proves inconclusive as to whether the entity is a VIE or we are the primary beneficiary and consolidation is required.
Fair value of assets and liabilities—The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. For financial and nonfinancial assets and liabilities that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value. In addition, changes in market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. Therefore, when market data is not available, we would use valuation techniques requiring more management judgment to estimate the appropriate fair value measurement.
See Item 8—"Financial Statements and Supplemental Data—Note 16" for a complete discussion on how we determine fair value of financial and non-financial assets and financial liabilities and the related measurement techniques and estimates involved.
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Item 7a. Quantitative and Qualitative Disclosures about Market Risk
Market Risks
Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. In pursuing our business plan, the primary market risk to which we are exposed is interest rate risk. Our operating results will depend in part on the difference between the interest and related income earned on our assets and the interest expense incurred in connection with our interest-bearing liabilities. Changes in the general level of interest rates prevailing in the financial markets will affect the spread between our floating rate assets and liabilities subject to the net amount of floating rate assets/liabilities and the impact of interest rate floors and caps. Any significant compression of the spreads between interest-earning assets and interest-bearing liabilities could have a material adverse effect on us.
In the event of a significant rising interest rate environment or economic downturn, defaults could increase and cause us to incur additional credit losses which would adversely affect our liquidity and operating results. Such delinquencies or defaults would likely have a material adverse effect on the spreads between interest-earning assets and interest-bearing liabilities. In addition, an increase in interest rates could, among other things, reduce the value of our fixed-rate interest-bearing assets and our ability to realize gains from the sale of such assets.
Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. We monitor the spreads between our interest-earning assets and interest-bearing liabilities and may implement hedging strategies to limit the effects of changes in interest rates on our operations, including engaging in interest rate swaps, interest rate caps and other interest rate-related derivative contracts. Such strategies are designed to reduce our exposure, on specific transactions or on a portfolio basis, to changes in cash flows as a result of interest rate movements in the market. We do not enter into derivative contracts for speculative purposes or as a hedge against changes in our credit risk or the credit risk of our borrowers.
While a REIT may utilize derivative instruments to hedge interest rate risk on its liabilities incurred to acquire or carry real estate assets without generating non-qualifying income, use of derivatives for other purposes will generate non-qualified income for REIT income test purposes. This includes hedging asset related risks such as credit, foreign exchange and interest rate exposure on our loan assets. As a result our ability to hedge these types of risks is limited. There can be no assurance that our profitability will not be materially adversely affected during any period as a result of changing interest rates.
The following table quantifies the potential changes in annual net income, assuming no change in our interest earning assets or interest bearing liabilities, should interest rates increase or decrease by 10, 50 or 100 basis points, assuming no change in the shape of the yield curve (i.e., relative interest rates). The base interest rate scenario assumes the one-month LIBOR rate of 2.50% as of December 31, 2018. Actual results could differ significantly from those estimated in the table.
Estimated Change In Net Income
($ in thousands)

Change in Interest Rates |  | Net Income(1)
-100 Basis Points |  | $ | (9,331 | )
-50 Basis Points |  | (4,940 | )
-10 Basis Points |  | (1,003 | )
Base Interest Rate |  | — |
+10 Basis Points |  | 1,003 |
+50 Basis Points |  | 5,016 |
+100 Basis Points |  | 10,033 |

______________________________________________________________________________

(1) | We have an overall net variable-rate asset position, which results in an increase in net income when rates increase and a decrease in net income when rates decrease. As of December 31, 2018, $462.4 million of our floating rate loans have a cumulative weighted average LIBOR floor of 1.1% and $22.6 million of our floating rate debt has a cumulative weighted average interest rate floor of 0.4%.

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Item 8. Financial Statements and Supplemental Data
Index to Financial Statements

| Page
Report of Independent Registered Public Accounting Firm | 55
Financial Statements: |
Consolidated Balance Sheets as of December 31, 2018 and 2017 | 58
Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016 | 59
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2018, 2017 and 2016 | 60
Consolidated Statements of Changes in Equity for the years ended December 31, 2018, 2017 and 2016 | 61
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016 | 63
Notes to Consolidated Financial Statements | 64
Financial Statement Schedules: |
Schedule II—Valuation and Qualifying Accounts and Reserves as of December 31, 2018 with reconciliations for the years ended December 31, 2018, 2017 and 2016 | 112
Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2018 with reconciliations for the years ended December 31, 2018, 2017 and 2016 | 113
Schedule IV—Mortgage Loans on Real Estate as of December 31, 2018 with reconciliations for the years ended December 31, 2018, 2017 and 2016 | 128

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of iStar Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of iStar Inc. and subsidiaries (the "Company") as of December 31, 2018, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows, for the year ended December 31, 2018, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2019, expressed an unqualified opinion on the Company's internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 3 to the financial statements, the Company changed the manner in which it accounts for the transfer and derecognition of nonfinancial assets and in substance nonfinancial assets in 2018 due to the adoption of Accounting Standards Update 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets”.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2019
We have served as the Company's auditor since 2018.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of iStar Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of iStar Inc. and subsidiaries (the “Company”) as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2018, of the Company and our report dated February 25, 2019, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s change in the manner in which it accounts for the transfer and derecognition of nonfinancial assets and in substance nonfinancial assets in 2018 due to the adoption of Accounting Standards Update 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets”.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2019
56

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of iStar Inc.
Opinion on the Financial Statements
We have audited the consolidated balance sheet of iStar Inc. and its subsidiaries (the “Company”) as of December 31, 2017, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended December 31, 2017, including the related notes and the accompanying schedules of valuation and qualifying accounts and reserves, real estate and accumulated depreciation, and mortgage loans on real estate for each of the two years in the period ended December 31, 2017 (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principles
As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it classifies certain cash receipts and cash payments and changed the manner in which it presents restricted cash on the consolidated statements of cash flows in 2018.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
February 26, 2018, except for the change in manner in which the Company classifies certain cash receipts and cash payments and the change in manner in which it presents restricted cash on the consolidated statements of cash flows discussed in Note 3 to the consolidated financial statements, as to which the date is February 25, 2019
We served as the Company's auditor from at least 1997 to 2018. We have not been able to determine the specific year we began serving as auditor of the Company.
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iStar Inc.
Consolidated Balance Sheets
(In thousands, except per share data)

| As of December 31,
| 2018 |  | 2017
ASSETS |  |  |
Real estate |  |  |
Real estate, at cost | $ | 2,076,333 |  |  | $ | 1,629,436 |
Less: accumulated depreciation | (305,314 | ) |  | (347,405 | )
Real estate, net | 1,771,019 |  |  | 1,282,031 |
Real estate available and held for sale | 22,551 |  |  | 68,588 |
Total real estate | 1,793,570 |  |  | 1,350,619 |
Land and development, net | 598,218 |  |  | 860,311 |
Loans receivable and other lending investments, net | 988,224 |  |  | 1,300,655 |
Other investments | 304,275 |  |  | 321,241 |
Cash and cash equivalents | 931,751 |  |  | 657,688 |
Accrued interest and operating lease income receivable, net | 10,669 |  |  | 11,957 |
Deferred operating lease income receivable, net | 98,302 |  |  | 86,877 |
Deferred expenses and other assets, net | 289,268 |  |  | 141,730 |
Total assets | $ | 5,014,277 |  |  | $ | 4,731,078 |
LIABILITIES AND EQUITY |  |  |
Liabilities: |  |  |
Accounts payable, accrued expenses and other liabilities | $ | 318,592 |  |  | $ | 238,004 |
Loan participations payable, net | 22,484 |  |  | 102,425 |
Debt obligations, net | 3,609,086 |  |  | 3,476,400 |
Total liabilities | 3,950,162 |  |  | 3,816,829 |
Commitments and contingencies (refer to Note 11) |  |  |  |  |
Equity: |  |  |
iStar Inc. shareholders' equity: |  |  |
Preferred Stock Series D, G and I, liquidation preference $25.00 per share (refer to Note 13) | 12 |  |  | 12 |
Convertible Preferred Stock Series J, liquidation preference $50.00 per share (refer to Note 13) | 4 |  |  | 4 |
Common Stock, $0.001 par value, 200,000 shares authorized, 68,085 and 68,236 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 68 |  |  | 68 |
Additional paid-in capital | 3,352,225 |  |  | 3,352,665 |
Accumulated deficit | (2,472,061 | ) |  | (2,470,564 | )
Accumulated other comprehensive loss (refer to Note 13) | (17,270 | ) |  | (2,482 | )
Total iStar Inc. shareholders' equity | 862,978 |  |  | 879,703 |
Noncontrolling interests | 201,137 |  |  | 34,546 |
Total equity | 1,064,115 |  |  | 914,249 |
Total liabilities and equity | $ | 5,014,277 |  |  | $ | 4,731,078 |

_______________________________________________________________________________
Note - Refer to Note 2 for details on the Company's consolidated variable interest entities ("VIEs").
The accompanying notes are an integral part of the consolidated financial statements.
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iStar Inc.
Consolidated Statements of Operations
(In thousands, except per share data)

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Revenues: |  |  |  |  |
Operating lease income | $ | 208,192 |  |  | $ | 187,684 |  |  | $ | 191,180 |
Interest income | 97,878 |  |  | 106,548 |  |  | 129,153 |
Other income | 82,342 |  |  | 188,091 |  |  | 46,514 |
Land development revenue | 409,710 |  |  | 196,879 |  |  | 88,340 |
Total revenues | 798,122 |  |  | 679,202 |  |  | 455,187 |
Costs and expenses: |  |  |  |  |
Interest expense | 183,751 |  |  | 194,686 |  |  | 221,398 |
Real estate expense | 139,289 |  |  | 147,617 |  |  | 137,522 |
Land development cost of sales | 350,181 |  |  | 180,916 |  |  | 62,007 |
Depreciation and amortization | 58,699 |  |  | 49,033 |  |  | 51,660 |
General and administrative(1) | 92,135 |  |  | 98,882 |  |  | 84,027 |
Provision for (recovery of) loan losses | 16,937 |  |  | (5,828 | ) |  | (12,514 | )
Impairment of assets | 147,108 |  |  | 32,379 |  |  | 14,484 |
Other expense | 6,040 |  |  | 20,954 |  |  | 5,883 |
Total costs and expenses | 994,140 |  |  | 718,639 |  |  | 564,467 |
Income from sales of real estate | 126,004 |  |  | 92,049 |  |  | 105,296 |
Income (loss) from operations before earnings from equity method investments and other items | (70,014 | ) |  | 52,612 |  |  | (3,984 | )
Loss on early extinguishment of debt, net | (10,367 | ) |  | (14,724 | ) |  | (1,619 | )
Earnings (losses) from equity method investments | (5,007 | ) |  | 13,015 |  |  | 77,349 |
Gain on consolidation of equity method investment | 67,877 |  |  | — |  |  | — |
Income (loss) from continuing operations before income taxes | (17,511 | ) |  | 50,903 |  |  | 71,746 |
Income tax benefit (expense) | (815 | ) |  | 948 |  |  | 10,166 |
Income (loss) from continuing operations | (18,326 | ) |  | 51,851 |  |  | 81,912 |
Income from discontinued operations | — |  |  | 4,939 |  |  | 18,270 |
Gain from discontinued operations | — |  |  | 123,418 |  |  | — |
Net income (loss) | (18,326 | ) |  | 180,208 |  |  | 100,182 |
Net income attributable to noncontrolling interests | (13,936 | ) |  | (4,526 | ) |  | (4,876 | )
Net income (loss) attributable to iStar Inc. | (32,262 | ) |  | 175,682 |  |  | 95,306 |
Preferred dividends | (32,495 | ) |  | (64,758 | ) |  | (51,320 | )
Net income allocable to Participating Security holders(2) | — |  |  | — |  |  | (14 | )
Net income (loss) allocable to common shareholders | $ | (64,757 | ) |  | $ | 110,924 |  |  | $ | 43,972 |
Per common share data: |  |  |  |  |
Income (loss) attributable to iStar Inc. from continuing operations: |  |  |  |  |
Basic | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |
Diluted | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |
Net income (loss) attributable to iStar Inc.: |  |  |  |  |
Basic | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |
Diluted | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |
Weighted average number of common shares: |  |  |  |  |
Basic | 67,958 |  |  | 71,021 |  |  | 73,453 |
Diluted | 67,958 |  |  | 71,021 |  |  | 73,835 |

_______________________________________________________________________________

(1) | For the years ended December 31, 2018, 2017 and 2016, includes $15.4 million, $14.9 million and $5.8 million, respectively, of equity-based compensation associated with iPIP Plans (refer to Note 14). These plans are liability-based plans which are marked-to-market quarterly and such marks are based upon the performance of the assets underlying the plans as of the quarterly measurement dates; however, actual amounts cannot be determined until the end date of the plans and the ultimate repayment or monetization of the related assets.

(2) | Participating Security holders are non-employee directors who hold common stock equivalents ("CSEs") and restricted stock awards granted under the Company's Long Term Incentive Plans that are eligible to participate in dividends (refer to Note 14 and Note 15).

The accompanying notes are an integral part of the consolidated financial statements.
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iStar Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Net income (loss) | $ | (18,326 | ) |  | $ | 180,208 |  |  | $ | 100,182 |
Other comprehensive income: |  |  |  |  |
Impact from adoption of new accounting standards (refer to Note 3) | 276 |  |  | — |  |  | — |
Reclassification of losses on cumulative translation adjustment into earnings upon realization(1) | 721 |  |  | — |  |  | — |
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization(2) | (1,508 | ) |  | (168 | ) |  | 598 |
Unrealized gains/(losses) on available-for-sale securities | (1,135 | ) |  | 1,186 |  |  | 274 |
Unrealized gains/(losses) on cash flow hedges | (14,699 | ) |  | 847 |  |  | (85 | )
Unrealized gains/(losses) on cumulative translation adjustment | (364 | ) |  | (129 | ) |  | (154 | )
Other comprehensive income (loss) | (16,709 | ) |  | 1,736 |  |  | 633 |
Comprehensive income (loss) | (35,035 | ) |  | 181,944 |  |  | 100,815 |
Comprehensive income attributable to noncontrolling interests | (12,015 | ) |  | (4,526 | ) |  | (4,876 | )
Comprehensive income (loss) attributable to iStar Inc. | $ | (47,050 | ) |  | $ | 177,418 |  |  | $ | 95,939 |

_______________________________________________________________________________

(1) | Amounts were reclassified to "Earnings from equity method investments" in the Company's consolidated statements of operations.

(2) | Reclassified to "Interest expense" in the Company's consolidated statements of operations are $388, $64 and $217 for the years ended December 31, 2018, 2017 and 2016, respectively. Amount reclassified to "Gain on consolidation of equity method investment" in the Company's consolidated

statements of operations is $1,876 for the year ended December 31, 2018. Reclassified to "Earnings (losses) from equity method investments" in the Company's consolidated statements of operations are $(20), $304 and $381, respectively, for the years ended December 31, December 31, 2018, 2017 and 2016.
The accompanying notes are an integral part of the consolidated financial statements.
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iStar Inc.
Consolidated Statements of Changes in Equity
(In thousands)

|  | iStar Inc. Shareholders' Equity |  |  |
|  | Preferred Stock(1) |  | Preferred Stock Series J(1) |  | Common Stock at Par |  | Additional Paid-In Capital |  | Retained Earnings (Deficit) |  | Accumulated Other Comprehensive Income (Loss) |  | Noncontrolling Interests |  | Total Equity
Balance as of December 31, 2015 |  | $ | 22 |  |  | $ | 4 |  |  | $ | 81 |  |  | $ | 3,689,330 |  |  | $ | (2,625,474 | ) |  | $ | (4,851 | ) |  | $ | 42,218 |  |  | $ | 1,101,330 |
Dividends declared—preferred |  | — |  |  | — |  |  | — |  |  | — |  |  | (51,320 | ) |  | — |  |  | — |  |  | (51,320 | )
Issuance of stock/restricted stock unit amortization, net(2) |  | — |  |  | — |  |  | — |  |  | 2,031 |  |  | — |  |  | — |  |  | — |  |  | 2,031 |
Issuance of common stock for conversion of senior unsecured convertible notes |  | — |  |  | — |  |  | 1 |  |  | 9,595 |  |  | — |  |  | — |  |  | — |  |  | 9,596 |
Net income for the period(3) |  | — |  |  | — |  |  | — |  |  | — |  |  | 95,306 |  |  | — |  |  | 10,927 |  |  | 106,233 |
Change in accumulated other comprehensive income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 633 |  |  | — |  |  | 633 |
Repurchase of stock |  | — |  |  | — |  |  | (10 | ) |  | (98,419 | ) |  | — |  |  | — |  |  | — |  |  | (98,429 | )
Change in additional paid in capital attributable to redeemable noncontrolling interests |  | — |  |  | — |  |  | — |  |  | (365 | ) |  | — |  |  | — |  |  | — |  |  | (365 | )
Contributions from noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 790 |  |  | 790 |
Distributions to noncontrolling interests(4) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10,815 | ) |  | (10,815 | )
Balance as of December 31, 2016 |  | $ | 22 |  |  | $ | 4 |  |  | $ | 72 |  |  | $ | 3,602,172 |  |  | $ | (2,581,488 | ) |  | $ | (4,218 | ) |  | $ | 43,120 |  |  | $ | 1,059,684 |
Dividends declared—preferred |  | — |  |  | — |  |  | — |  |  | — |  |  | (46,614 | ) |  | — |  |  | — |  |  | (46,614 | )
Issuance of stock/restricted stock unit amortization, net(2) |  | — |  |  | — |  |  | — |  |  | 2,522 |  |  | — |  |  | — |  |  | — |  |  | 2,522 |
Net income for the period(3) |  | — |  |  | — |  |  | — |  |  | — |  |  | 175,682 |  |  | — |  |  | 5,853 |  |  | 181,535 |
Change in accumulated other comprehensive income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,736 |  |  | — |  |  | 1,736 |
Repurchase of stock |  | — |  |  | — |  |  | (4 | ) |  | (45,924 | ) |  | — |  |  | — |  |  | — |  |  | (45,928 | )
Issuance of senior unsecured convertible notes (refer to Note 10) |  | — |  |  | — |  |  | — |  |  | 25,869 |  |  | — |  |  | — |  |  | — |  |  | 25,869 |
Dividends declared and payable — Series E and Series F Preferred Stock |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,830 | ) |  | — |  |  | — |  |  | (1,830 | )
Redemption of Series E and F Preferred Stock |  | (10 | ) |  | — |  |  | — |  |  | (223,676 | ) |  | (16,314 | ) |  | — |  |  | — |  |  | (240,000 | )
Change in additional paid in capital attributable to redeemable noncontrolling interest(5) |  | — |  |  | — |  |  | — |  |  | (8,298 | ) |  | — |  |  | — |  |  | — |  |  | (8,298 | )
Contributions from noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 12 |  |  | 12 |
Distributions to noncontrolling interests |  | — |  |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | (14,439 | ) |  | (14,439 | )
Balance as of December 31, 2017 |  | $ | 12 |  |  | $ | 4 |  |  | $ | 68 |  |  | $ | 3,352,665 |  |  | $ | (2,470,564 | ) |  | $ | (2,482 | ) |  | $ | 34,546 |  |  | $ | 914,249 |

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iStar Inc.
Consolidated Statements of Changes in Equity
(In thousands)

|  | iStar Inc. Shareholders' Equity |  |  |
|  | Preferred Stock(1) |  | Preferred Stock Series J(1) |  | Common Stock at Par |  | Additional Paid-In Capital |  | Retained Earnings (Deficit) |  | Accumulated Other Comprehensive Income (Loss) |  | Noncontrolling Interests |  | Total Equity
Balance as of December 31, 2017 |  | $ | 12 |  |  | $ | 4 |  |  | $ | 68 |  |  | $ | 3,352,665 |  |  | $ | (2,470,564 | ) |  | $ | (2,482 | ) |  | $ | 34,546 |  |  | $ | 914,249 |
Dividends declared—preferred |  | — |  |  | — |  |  | — |  |  | — |  |  | (32,495 | ) |  | — |  |  | — |  |  | (32,495 | )
Dividends declared—common |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,333 | ) |  | — |  |  | — |  |  | (12,333 | )
Issuance of stock/restricted stock unit amortization, net(2) |  | — |  |  | — |  |  | 1 |  |  | 7,863 |  |  | — |  |  | — |  |  | — |  |  | 7,864 |
Net loss for the period |  | — |  |  | — |  |  | — |  |  | — |  |  | (32,262 | ) |  | — |  |  | 13,936 |  |  | (18,326 | )
Change in accumulated other comprehensive income |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (15,064 | ) |  | (1,921 | ) |  | (16,985 | )
Repurchase of stock |  | — |  |  | — |  |  | (1 | ) |  | (8,303 | ) |  | — |  |  | — |  |  | — |  |  | (8,304 | )
Contributions from noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,227 |  |  | 15,227 |
Distributions to noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (48,930 | ) |  | (48,930 | )
Change in noncontrolling interest attributable to consolidation of equity method investment (refer to Note 7) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 188,279 |  |  | 188,279 |
Impact from adoption of new accounting standards (refer to Note 3) |  | — |  |  | — |  |  | — |  |  | — |  |  | 75,593 |  |  | 276 |  |  | — |  |  | 75,869 |
Balance as of December 31, 2018 |  | $ | 12 |  |  | $ | 4 |  |  | $ | 68 |  |  | $ | 3,352,225 |  |  | $ | (2,472,061 | ) |  | $ | (17,270 | ) |  | $ | 201,137 |  |  | $ | 1,064,115 |

_______________________________________________________________________________

(1) | Refer to Note 13 for details on the Company's Preferred Stock.

(2) | Net of payments for withholding taxes upon vesting of stock-based compensation.

(3) | For the years ended December 31, 2017 and 2016 net income shown above excludes $1,327 and $6,051 of net loss attributable to redeemable noncontrolling interests.

(4) | Includes payments of $10.8 million to acquire a noncontrolling interest.

(5) | Represents the amount paid in excess of its carrying value to acquire a redeemable noncontrolling interest.

The accompanying notes are an integral part of the consolidated financial statements.
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iStar Inc.
Consolidated Statements of Cash Flows
(In thousands)

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Cash flows from operating activities: |  |  |  |  |
Net income (loss) | $ | (18,326 | ) |  | $ | 180,208 |  |  | $ | 100,182 |
Adjustments to reconcile net income (loss) to cash flows from operating activities: |  |  |  |  |
Provision for (recovery of) loan losses | 16,937 |  |  | (5,828 | ) |  | (12,514 | )
Impairment of assets | 147,108 |  |  | 32,379 |  |  | 14,484 |
Depreciation and amortization | 58,699 |  |  | 49,934 |  |  | 54,329 |
Non-cash expense for stock-based compensation | 17,563 |  |  | 18,812 |  |  | 10,889 |
Amortization of discounts/premiums and deferred financing costs on debt obligations, net | 15,422 |  |  | 13,857 |  |  | 16,810 |
Amortization of discounts/premiums and deferred interest on loans, net | (41,168 | ) |  | (55,985 | ) |  | (77,851 | )
Deferred interest on loans received | 40,463 |  |  | 52,795 |  |  | 85,374 |
Gain from consolidation of equity method investment | (67,877 | ) |  | — |  |  | — |
Gain from discontinued operations | — |  |  | (123,418 | ) |  | — |
Losses (earnings) from equity method investments | 5,007 |  |  | (13,015 | ) |  | (77,349 | )
Distributions from operations of other investments | 18,133 |  |  | 42,059 |  |  | 48,732 |
Deferred operating lease income | (14,989 | ) |  | (6,830 | ) |  | (9,921 | )
Income from sales of real estate | (126,004 | ) |  | (92,557 | ) |  | (105,296 | )
Land development revenue in excess of cost of sales | (59,529 | ) |  | (15,963 | ) |  | (26,333 | )
Loss on early extinguishment of debt, net | 10,367 |  |  | 14,724 |  |  | 1,619 |
Other operating activities, net | 3,377 |  |  | 16,878 |  |  | 8,809 |
Changes in assets and liabilities: |  |  |  |  |
Changes in accrued interest and operating lease income receivable, net | 949 |  |  | 1,424 |  |  | 3,634 |
Changes in deferred expenses and other assets, net | (1,925 | ) |  | (15,230 | ) |  | (5,656 | )
Changes in accounts payable, accrued expenses and other liabilities, net | (28,335 | ) |  | 7,299 |  |  | (453 | )
Cash flows provided by (used in) operating activities | (24,128 | ) |  | 101,543 |  |  | 29,489 |
Cash flows from investing activities: |  |  |  |  |
Originations and fundings of loans receivable, net | (482,143 | ) |  | (522,269 | ) |  | (410,975 | )
Capital expenditures on real estate assets | (60,495 | ) |  | (37,067 | ) |  | (69,810 | )
Capital expenditures on land and development assets | (128,543 | ) |  | (121,400 | ) |  | (103,806 | )
Acquisitions of real estate assets | (19,454 | ) |  | (6,600 | ) |  | (38,433 | )
Repayments of and principal collections on loans receivable and other lending investments, net | 832,982 |  |  | 615,620 |  |  | 504,844 |
Net proceeds from sales of real estate | 411,786 |  |  | 314,013 |  |  | 435,560 |
Net proceeds from sales of land and development assets | 223,416 |  |  | 194,090 |  |  | 94,424 |
Net proceeds from sale of other investments | — |  |  | — |  |  | 43,936 |
Cash acquired upon consolidation of equity method investments | 13,608 |  |  | — |  |  | — |
Distributions from other investments | 40,804 |  |  | 49,672 |  |  | 92,482 |
Contributions to and acquisition of interest in other investments | (94,578 | ) |  | (224,219 | ) |  | (58,197 | )
Other investing activities, net | 41,476 |  |  | 1,231 |  |  | (24,997 | )
Cash flows provided by investing activities | 778,859 |  |  | 263,071 |  |  | 465,028 |
Cash flows from financing activities: |  |  |  |  |
Borrowings from debt obligations and convertible notes | 704,360 |  |  | 2,288,654 |  |  | 716,001 |
Repayments and repurchases of debt obligations | (944,800 | ) |  | (1,921,699 | ) |  | (1,442,938 | )
Purchase of marketable securities in connection with the defeasance of mortgage notes payable | (110,939 | ) |  | — |  |  | — |
Proceeds from loan participations payable | — |  |  | — |  |  | 22,844 |
Preferred dividends paid | (32,496 | ) |  | (48,444 | ) |  | (51,320 | )
Common dividends paid | (12,227 | ) |  | — |  |  | — |
Repurchase of stock | (8,304 | ) |  | (45,928 | ) |  | (99,335 | )
Redemption of Series E and F preferred stock | — |  |  | (240,000 | ) |  | — |
Payments for deferred financing costs | (5,471 | ) |  | (32,419 | ) |  | (9,980 | )
Payments for withholding taxes upon vesting of stock-based compensation | (4,807 | ) |  | (724 | ) |  | (1,451 | )
Distributions to and redemption of noncontrolling interests | (60,743 | ) |  | (26,213 | ) |  | (10,771 | )
Payments for debt prepayment or extinguishment costs | (4,132 | ) |  | (14,108 | ) |  | (1,912 | )
Other financing activities, net | 21,620 |  |  | (599 | ) |  | 1,207 |
Cash flows used in financing activities | (457,939 | ) |  | (41,480 | ) |  | (877,655 | )
Effect of exchange rate changes on cash | 19 |  |  | (28 | ) |  | 7 |
Changes in cash, cash equivalents and restricted cash | 296,811 |  |  | 323,106 |  |  | (383,131 | )
Cash, cash equivalents and restricted cash at beginning of period | 677,733 |  |  | 354,627 |  |  | 737,758 |
Cash, cash equivalents and restricted cash at end of period | $ | 974,544 |  |  | $ | 677,733 |  |  | $ | 354,627 |
Supplemental disclosure of cash flow information: |  |  |  |  |
Cash paid during the period for interest, net of amount capitalized | $ | 171,590 |  |  | $ | 179,208 |  |  | 199,667 |
Supplemental disclosure of non-cash investing and financing activity: |  |  |  |  |
Fundings and repayments of loan receivables and loan participations, net | $ | (80,095 | ) |  | $ | (57,514 | ) |  | $ | (15,594 | )
Developer fee payable | — |  |  | — |  |  | 9,478 |
Acquisitions of real estate and land and development assets through deed-in-lieu | 4,600 |  |  | — |  |  | 40,583 |
Contributions of real estate and land and development assets to equity method investments, net | — |  |  | — |  |  | 8,828 |
Accounts payable for capital expenditures on land and development assets | 16,052 |  |  | 3,775 |  |  | 3,674 |
Marketable securities transferred in connection with the defeasance of mortgage notes payable | 110,939 |  |  | — |  |  | — |
Accounts payable for capital expenditures on real estate assets | — |  |  | 2,709 |  |  | — |
Conversion of senior unsecured convertible notes into common stock | — |  |  | — |  |  | 9,596 |
Defeasance of mortgage notes payable | (105,785 | ) |  | — |  |  | — |
Receivable from sales of real estate and land parcels | — |  |  | 4,853 |  |  | 7,509 |
Financing provided on sales of land and development assets, net | 142,639 |  |  | — |  |  | — |
Increase in net lease assets upon consolidation of equity method investment | 844,550 |  |  | — |  |  | — |
Increase in debt obligations upon consolidation of equity method investment | 464,706 |  |  | — |  |  | — |
Increase in noncontrolling interests upon consolidation of equity method investment | 200,093 |  |  | — |  |  | — |

The accompanying notes are an integral part of the consolidated financial statements.
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iStar Inc.
Notes to Consolidated Financial Statements
Note 1—Business and Organization
Business—iStar Inc. (the "Company") finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. The Company also manages entities focused on ground lease and net lease investments (refer to Note 7). The Company has invested approximately $40 billion of capital over the past two decades and is structured as a real estate investment trust ("REIT") with a diversified portfolio focused on larger assets located in major metropolitan markets. The Company's primary reportable business segments are real estate finance, net lease and operating properties and land and development (refer to Note 17).
Organization—The Company began its business in 1993 through the management of private investment funds and became publicly traded in 1998. Since that time, the Company has grown through the origination of new investments and corporate acquisitions.
Note 2—Basis of Presentation and Principles of Consolidation
Basis of Presentation—The accompanying audited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Principles of Consolidation—The consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, controlled partnerships and variable interest entities ("VIEs") for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The Company's involvement with VIEs affects its financial performance and cash flows primarily through amounts recorded in "Operating lease income," "Interest income," "Earnings from equity method investments," "Real estate expense" and "Interest expense" in the Company's consolidated statements of operations. The Company has provided no financial support to those VIEs that it was not previously contractually required to provide.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Consolidated VIEs—The Company consolidates VIEs for which it is considered the primary beneficiary. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE's respective assets. The Company did not have any unfunded commitments related to consolidated VIEs as of December 31, 2018. The following table presents the assets and liabilities of the Company's consolidated VIEs as of December 31, 2018 and 2017 ($ in thousands):

| As of
| December 31, 2018 |  | December 31, 2017
ASSETS |  |  |
Real estate |  |  |
Real estate, at cost | $ | 848,052 |  |  | $ | 47,073 |
Less: accumulated depreciation | (15,365 | ) |  | (2,732 | )
Real estate, net | 832,687 |  |  | 44,341 |
Land and development, net | 279,031 |  |  | 212,408 |
Other investments | 72 |  |  | — |
Cash and cash equivalents | 25,219 |  |  | 9,842 |
Accrued interest and operating lease income receivable, net | 1,302 |  |  | 230 |
Deferred operating lease income receivable, net | 8,972 |  |  | — |
Deferred expenses and other assets, net | 167,324 |  |  | 30,791 |
Total assets | $ | 1,314,607 |  |  | $ | 297,612 |
LIABILITIES |  |  |
Accounts payable, accrued expenses and other liabilities | $ | 106,907 |  |  | $ | 38,616 |
Debt obligations, net | 485,000 |  |  | — |
Total liabilities | 591,907 |  |  | 38,616 |

Unconsolidated VIEs—The Company has investments in VIEs where it is not the primary beneficiary, and accordingly, the VIEs have not been consolidated in the Company's consolidated financial statements. As of December 31, 2018, the Company's maximum exposure to loss from these investments does not exceed the sum of the $93.2 million carrying value of the investments, which are classified in "Other investments" and "Loans receivable and other lending investments, net" on the Company's consolidated balance sheets, and $35.7 million of related unfunded commitments.
Note 3—Summary of Significant Accounting Policies
The following paragraphs describe the impact on the Company's consolidated financial statements from the adoption of Accounting Standards Updates ("ASUs") on January 1, 2018.
ASU 2014-09—ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Certain contracts with customers, including lease contracts and financial instruments and other contractual rights, are not within the scope of the new guidance. The Company's revenue within the scope of the guidance is primarily ancillary income related to its operating properties. The Company adopted ASU 2014-09 using the modified retrospective approach and the adoption did not have a material impact on the Company's consolidated financial statements.
ASU 2016-01 and ASU 2018-03—ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), addressed certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, provided technical corrections and improvements to ASU 2016-01. ASU 2016-01 requires entities to measure equity investments not accounted for under the equity method at fair value and recognize changes in fair value in net income. For equity investments without readily determinable fair values, entities
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
may elect a measurement alternative that will allow those investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes. Upon adoption, entities must record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the standard is adopted. ASU 2016-01 also eliminated the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The adoption of ASU 2016-01 and ASU 2018-03 did not have a material impact on the Company's consolidated financial statements.
ASU 2016-15—ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), was issued to reduce diversity in practice in how certain cash receipts and cash payments, including debt prepayment or debt extinguishment costs, distributions from equity method investees, and other separately identifiable cash flows, are presented and classified in the statement of cash flows. The adoption of ASU 2016-15 was retrospective and resulted in an increase to cash flows provided by operating activities of $20.8 million and a decrease to cash flows provided by financing activities of $20.8 million for the year ended December 31, 2017 and an increase to cash flows provided by operating activities of $7.3 million and a decrease to cash flows provided by financing activities of $7.3 million for the year ended December 31, 2016, primarily resulting from the reclassification of cash payments made related to the extinguishment of debt.
ASU 2016-18—ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18"), requires that restricted cash be included with cash and cash equivalents when reconciling beginning and ending cash and cash equivalents on the statement of cash flows and requires disclosure of what is included in restricted cash. The adoption of ASU 2016-18 did not have a material impact on the Company's consolidated financial statements. The adoption of ASU 2016-18 was retrospective and resulted in an increase to cash flows provided by operating activities of $0.6 million and a decrease to cash flows provided by investing activities of $6.4 million for year ended December 31, 2017 and resulted in an increase to cash flows provided by operating activities of $0.7 million and a decrease to cash flows provided by investing activities of $1.5 million for the year ended December 31, 2016.
ASU 2017-01—The adoption of ASU 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01"), did not have a material impact on the Company's consolidated financial statements. Under ASU 2017-01, certain transactions previously accounted for as business combinations under the former accounting guidance will be accounted for as asset acquisitions under ASU 2017-01. As a result, the Company expects more transaction costs to be capitalized relating to real estate acquisitions as a result of ASU 2017-01.
ASU 2017-05—ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05"), simplifies GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses. The amendments in ASU 2017-05 require an entity to initially measure a retained noncontrolling interest in a nonfinancial asset at fair value consistent with how a retained noncontrolling interest in a business is measured. Also, if an entity transfers ownership interests in a consolidated subsidiary that is within the scope of ASC 610-20 and continues to have a controlling financial interest in that subsidiary, ASU 2017-05 requires the entity to account for the transaction as an equity transaction, which is consistent with how changes in ownership interests in a consolidated subsidiary that is a business are recorded when a parent retains a controlling financial interest in the business. The Company adopted ASU 2017-05 using the modified retrospective approach which was applied to all contracts. On January 1, 2018, the Company recorded a step-up in basis to fair value of its retained noncontrolling interest relating to the sale of its ground lease business (refer to Note 4) and other transactions where the Company sold or contributed real estate to a venture and previously recognized partial gains. Prior to the adoption of ASU 2017-05, the Company was required to recognize gains on only the portion of its interest transferred to third parties and was precluded from recognizing a gain on its retained noncontrolling interest which was carried at the Company’s historical cost basis. The adoption of ASU 2017-05 had the following impact on the Company's consolidated financial statements (in thousands):

|  |  |  | Impact from ASU 2017-05 on January 1, 2018 |  |
|  | December 31, 2017 |  |  | January 1, 2018
Other investments |  | $ | 321,241 |  |  | $ | 75,869 |  |  | $ | 397,110 |
Total assets |  | 4,731,078 |  |  | 75,869 |  |  | 4,806,947 |
Retained earnings (deficit) |  | $ | (2,470,564 | ) |  | $ | 75,869 |  |  | $ | (2,394,695 | )
Total equity |  | 914,249 |  |  | 75,869 |  |  | 990,118 |

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
ASU 2017-12—ASU 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"), was issued to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The Company adopted ASU 2017-12 on January 1, 2018 and the adoption did not have a material impact on the Company's consolidated financial statements.
Significant Accounting Policies
Real estate and land and development—Real estate and land and development assets are recorded at cost less accumulated depreciation and amortization, as follows:
Capitalization and depreciation—Certain improvements and replacements are capitalized when they extend the useful life of the asset. For real estate projects, the Company begins to capitalize qualified development and construction costs, including interest, real estate taxes, compensation and certain other carrying costs incurred which are specifically identifiable to a development project once activities necessary to get the asset ready for its intended use have commenced. If specific allocation of costs is not practicable, the Company will allocate costs based on relative fair value prior to construction or relative sales value, relative size or other methods as appropriate during construction. The Company’s policy for interest capitalization on qualifying real estate assets is to use the average amount of accumulated expenditures during the period the asset is being prepared for its intended use, which is typically when physical construction commences, and a capitalization rate which is derived from specific borrowings on the qualifying asset or the Company’s corporate borrowing rate in the absence of specific borrowings. The Company ceases capitalization on the portions substantially completed and ready for their intended use. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method of cost recovery over the estimated useful life, which is generally 40 years for facilities, five years for furniture and equipment, the shorter of the remaining lease term or expected life for tenant improvements and the remaining useful life of the facility for facility improvements.
Purchase price allocation—Upon acquisition of real estate, the Company determines whether the transaction is a business combination, which is accounted for under the acquisition method, or an acquisition of assets. For both types of transactions, the Company recognizes and measures identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree based on their relative fair values. For business combinations, the Company recognizes and measures goodwill or gain from a bargain purchase, if applicable, and expenses acquisition-related costs in the periods in which the costs are incurred and the services are received. For acquisitions of assets, acquisition-related costs are capitalized and recorded in "Real estate, net" on the Company's consolidated balance sheets.
The Company accounts for its acquisition of properties by recording the purchase price of tangible and intangible assets and liabilities acquired based on their estimated fair values. The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant. Intangible assets may include the value of lease incentive assets, above-market leases and in-place leases which are each recorded at their estimated fair values and included in “Deferred expenses and other assets, net” on the Company's consolidated balance sheets. Intangible liabilities may include the value of below-market leases, which are recorded at their estimated fair values and included in “Accounts payable, accrued expenses and other liabilities” on the Company's consolidated balance sheets. In-place leases are amortized over the remaining non-cancelable term and the amortization expense is included in "Depreciation and amortization" in the Company's consolidated statements of operations. Lease incentive assets and above-market (or below-market) lease value is amortized as a reduction of (or, increase to) operating lease income over the remaining non-cancelable term of each lease plus any renewal periods with fixed rental terms that are considered to be below-market. The Company may also engage in sale/leaseback transactions and execute leases with the occupant simultaneously with the purchase of the asset. These transactions are accounted for as asset acquisitions.
Impairments—The Company reviews real estate assets to be held and used and land and development assets, for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The value of a long-lived asset held for use and land and development assets are impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate assets and land and development assets are recorded in "Impairment of assets" in the Company's consolidated statements of operations.
Real estate available and held for sale—The Company reports real estate assets to be sold at the lower of their carrying amount or estimated fair value less costs to sell and classifies them as “Real estate available and held for sale” on the Company's consolidated balance sheets. If the estimated fair value less costs to sell is less than the carrying value, the difference will be recorded as an impairment charge. Impairment for real estate assets disposed of or classified as held for sale are included in "Impairment of assets" in the Company's consolidated statements of operations. Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.
If circumstances arise that were previously considered unlikely and, as a result the Company decides not to sell a property previously classified as held for sale, the property is reclassified as held and used and included in "Real estate, net" on the Company's consolidated balance sheets. The Company measures and records a property that is reclassified as held and used at the lower of: (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used; or (ii) the estimated fair value at the date of the subsequent decision not to sell.
Dispositions—Revenue from sales of land and development assets and gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with Accounting Standards Codification ("ASC") 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. The Company primarily uses specific identification and the relative sales value method to allocate costs. Gains on sales of real estate are included in "Income from sales of real estate" in the Company's consolidated statements of operations.
Loans receivable and other lending investments, net—Loans receivable and other lending investments, net includes the following investments: senior mortgages, corporate/partnership loans, subordinate mortgages, preferred equity investments and debt securities. Management considers nearly all of its loans to be held-for-investment, although certain investments may be classified as held-for-sale or available-for-sale.
Loans receivable classified as held-for-investment and debt securities classified as held-to-maturity are reported at their outstanding unpaid principal balance, and include unamortized acquisition premiums or discounts and unamortized deferred loan costs or fees. These loans and debt securities also include accrued and paid-in-kind interest and accrued exit fees that the Company determines are probable of being collected. Debt securities classified as available-for-sale are reported at fair value with unrealized gains and losses included in "Accumulated other comprehensive income (loss)" on the Company's consolidated balance sheets.
Loans receivable and other lending investments designated for sale are classified as held-for-sale and are carried at lower of amortized historical cost or estimated fair value. The amount by which carrying value exceeds fair value is recorded as a valuation allowance. Subsequent changes in the valuation allowance are included in the determination of net income (loss) in the period in which the change occurs.
For held-to-maturity and available-for-sale debt securities held in "Loans receivable and other lending investments, net," management evaluates whether the asset is other-than-temporarily impaired when the fair market value is below carrying value. The Company considers debt securities other-than-temporarily impaired if: (1) the Company has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery; or (3) it does not expect to recover the entire amortized cost basis of the security. If it is determined that an other-than-temporary impairment exists, the portion related to credit losses, where the Company does not expect to recover its entire amortized cost basis, will be recognized as an "Impairment of assets" in the Company's consolidated statements of operations. If the Company does not intend to sell the security and it is more likely than not that the entity will not be required to sell the security, but the security has suffered a credit loss, the impairment charge will be separated. The credit loss component of the impairment will be recorded as an "Impairment of assets" in the Company's consolidated statements of operations, and the remainder will be recorded in "Accumulated other comprehensive income (loss)" on the Company's consolidated balance sheets.
The Company acquires properties through foreclosure or by deed-in-lieu of foreclosure in full or partial satisfaction of non-performing loans. Based on the Company's strategic plan to realize the maximum value from the collateral received, property is classified as "Land and development, net," "Real estate, net" or "Real estate available and held for sale" at its estimated fair value when title to the property is obtained. Any excess of the carrying value of the loan over the estimated fair value of the property (less costs to sell for assets held for sale) is charged-off against the reserve for loan losses as of the date of foreclosure.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Equity and cost method investments—Equity interests are accounted for pursuant to the equity method of accounting if the Company can significantly influence the operating and financial policies of an investee. This is generally presumed to exist when ownership interest is between 20% and 50% of a corporation, or greater than 5% of a limited partnership or certain limited liability companies. The Company's periodic share of earnings and losses in equity method investees is included in "Earnings from equity method investments" in the consolidated statements of operations. When the Company's ownership position is too small to provide such influence, the cost method is used to account for the equity interest. Equity and cost method investments are included in "Other investments" on the Company's consolidated balance sheets.
To the extent that the Company contributes assets to an unconsolidated subsidiary, the Company’s investment in the subsidiary is recorded at the Company’s cost basis in the assets that were contributed to the unconsolidated subsidiary. To the extent that the Company’s cost basis is different from the basis reflected at the subsidiary level, when required, the basis difference is amortized over the life of the related assets and included in the Company’s share of equity in net income (loss) of the unconsolidated subsidiary, as appropriate. The Company recognizes gains on the contribution of real estate to unconsolidated subsidiaries, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale. The Company recognizes a loss when it contributes property to an unconsolidated subsidiary and receives a disproportionately smaller interest in the subsidiary based on a comparison of the carrying amount of the property with the cash and other consideration contributed by the other investors.
The Company periodically reviews equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges are recorded in "Earnings from equity method investments" in the Company's consolidated statements of operations.
Cash and cash equivalents—Cash and cash equivalents include cash held in banks or invested in money market funds with original maturity terms of less than 90 days.
Restricted cash—Restricted cash represents amounts required to be maintained under certain of the Company's debt obligations, loans, leasing, land development, sale and derivative transactions. Restricted cash is included in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets. The following table provides a reconciliation of the cash and cash equivalents and restricted cash reported in the Company's consolidated balance sheets that total to the same amount as reported in the consolidated statements of cash flows (in thousands):

|  | December 31, 2018 |  | December 31, 2017 |  | December 31, 2016 |  | December 31, 2015
Cash and cash equivalents |  | $ | 931,751 |  |  | $ | 657,688 |  |  | $ | 328,744 |  |  | $ | 711,101 |
Restricted cash included in deferred expenses and other assets, net |  | 42,793 |  |  | 20,045 |  |  | 25,883 |  |  | 26,657 |
Total cash, cash equivalents and restricted cash reported in the consolidated statements of cash flows |  | $ | 974,544 |  |  | $ | 677,733 |  |  | $ | 354,627 |  |  | $ | 737,758 |

Variable interest entities—The Company evaluates its investments and other contractual arrangements to determine if they constitute variable interests in a VIE. A VIE is an entity where a controlling financial interest is achieved through means other than voting rights. A VIE is consolidated by the primary beneficiary, which is the party that has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This overall consolidation assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision making powers, their impact on the VIE's economic performance, and related party relationships. Where qualitative assessment is not conclusive, the Company performs a quantitative analysis. The Company reassesses its evaluation of the primary beneficiary of a VIE on an ongoing basis and assesses its evaluation of an entity as a VIE upon certain reconsideration events.
Deferred expenses and other assets—Deferred expenses and other assets include certain non-tenant receivables, leasing costs, lease incentives and financing fees associated with revolving-debt arrangements. Financing fees associated with other debt obligations are recorded as a reduction of the carrying value of "Debt obligations, net" and "Loan participations payable, net" on the Company's consolidated balance sheets. Lease incentives and leasing costs that include brokerage, legal and other costs are amortized over the life of the respective leases and presented as an operating activity in the Company's consolidated statements of cash flows. External fees and costs incurred to obtain long-term debt financing have been deferred and are amortized over the
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
term of the respective borrowing using the effective interest method. Amortization of leasing costs is included in "Depreciation and amortization" and amortization of deferred financing fees is included in "Interest expense" in the Company's consolidated statements of operations.
Identified intangible assets and liabilities—Upon the acquisition of a business or an asset, the Company records intangible assets or liabilities acquired at their estimated fair values and determines whether such intangible assets or liabilities have finite or indefinite lives. As of December 31, 2018, all such intangible assets and liabilities acquired by the Company have finite lives. Intangible assets are included in "Deferred expenses and other assets, net" and intangible liabilities are included in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets. The Company amortizes finite lived intangible assets and liabilities based on the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the business acquired. The Company reviews finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the Company determines the carrying value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets are recorded in "Impairment of assets" in the Company's consolidated statements of operations.
Loan participations payable, net—The Company accounts for transfers of financial assets under ASC Topic 860, “Transfers and Servicing,” as either sales or secured borrowings. Transfers of financial assets that result in sales accounting are those in which (1) the transfer legally isolates the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee’s right to pledge or exchange the assets and provides more than a trivial benefit to the transferor, and (3) the transferor does not maintain effective control over the transferred assets. If the transfer does not meet these criteria, the transfer is presented on the balance sheet as "Loan participations payable, net". Financial asset activities that are accounted for as sales are removed from the balance sheet with any realized gain (loss) reflected in earnings during the period of sale.
Revenue recognition—The Company's revenue recognition policies are as follows:
Operating lease income: The Company's leases have all been determined to be operating leases based on analyses performed in accordance with ASC 840. Operating lease income is recognized on the straight-line method of accounting, generally from the later of the date the lessee takes possession of the space and it is ready for its intended use or the date of acquisition of the facility subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease revenue recognized under this method and contractual lease payment terms is recorded as "Deferred operating lease income receivable, net" on the Company's consolidated balance sheets.
The Company also recognizes revenue from certain tenant leases for reimbursements of all or a portion of operating expenses, including common area costs, insurance, utilities and real estate taxes of the respective property. This revenue is accrued in the same periods as the expense is incurred and is recorded as “Operating lease income” in the Company's consolidated statements of operations. Revenue is also recorded from certain tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the defined threshold has been met for the period.
Management estimates losses within its operating lease income receivable and deferred operating lease income receivable balances as of the balance sheet date and incorporates an asset-specific component, as well as a general, formula-based reserve based on management's evaluation of the credit risks associated with these receivables. As of December 31, 2018 and 2017, the allowance for doubtful accounts related to real estate tenant receivables was $1.5 million and $1.3 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.8 million and $1.3 million, respectively.
Interest Income: Interest income on loans receivable is recognized on an accrual basis using the interest method.
On occasion, the Company may acquire loans at premiums or discounts. These discounts and premiums in addition to any deferred costs or fees, are typically amortized over the contractual term of the loan using the interest method. Exit fees are also recognized over the lives of the related loans as a yield adjustment, if management believes it is probable that such amounts will be received. If loans with premiums, discounts, loan origination or exit fees are prepaid, the Company immediately recognizes the unamortized portion, which is included in "Other income" or "Other expense" in the Company's consolidated statements of operations.
The Company considers a loan to be non-performing and places loans on non-accrual status at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. While on non-accrual status, based on the Company's
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Notes to Consolidated Financial Statements (Continued)
judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash, or on a cost-recovery basis, where all cash receipts reduce a loan's carrying value. Non-accrual loans are returned to accrual status when a loan has become contractually current and management believes all amounts contractually owed will be received.
Certain of the Company's loans contractually provide for accrual of interest at specified rates that differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's determination that accrued interest and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the borrower.
Certain of the Company's loan investments provide for additional interest based on the borrower's operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon receipt of cash.
Other income: Other income includes revenues from hotel operations, which are recognized when rooms are occupied and the related services are provided. Revenues include room sales, food and beverage sales, parking, telephone, spa services and gift shop sales. Other income also includes gains from sales of loans, loan prepayment fees, yield maintenance payments, lease termination fees, management fees and other ancillary income. During the year ended December 31, 2017, the Company recorded $123.4 million of interest income and real estate tax reimbursements resulting from the settlement of litigation involving a dispute over the purchase and sale of land (refer to Note11).
Land development revenue and cost of sales: Land development revenue includes lot and parcel sales from wholly-owned properties and is recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs.
Reserve for loan losses—The reserve for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. If the Company determines that the collateral fair value less costs to sell is less than the carrying value of a collateral-dependent loan, the Company will record a reserve. The reserve is increased (decreased) through "Provision for (recovery of) loan losses" in the Company's consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower as the Company works toward a settlement or other alternative resolution, which can impact the potential for loan repayment or receipt of collateral. The Company's policy is to charge off a loan when it determines, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when the Company receives cash or other assets in a pre-foreclosure sale or takes control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when the Company has otherwise ceased significant collection efforts. The Company considers circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related reserve will be charged off. The Company has one portfolio segment, represented by commercial real estate lending, whereby it utilizes a uniform process for determining its reserve for loan losses. The reserve for loan losses includes a general, formula-based component and an asset-specific component.
The general reserve component covers performing loans and reserves for loan losses are recorded when: (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio; and (ii) the amount of the loss can be reasonably estimated. The formula-based general reserve is derived from estimated principal default probabilities and loss severities applied to groups of loans based upon risk ratings assigned to loans with similar risk characteristics during the Company's quarterly loan portfolio assessment. During this assessment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss. The Company estimates loss rates based on historical realized losses experienced within its portfolio and takes into account current economic conditions affecting the commercial real estate market when establishing appropriate time frames to evaluate loss experience.
The asset-specific reserve component relates to reserves for losses on impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect
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Notes to Consolidated Financial Statements (Continued)
all amounts due under the contractual terms of the loan agreement. This assessment is made on a loan-by-loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices, or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.
Substantially all of the Company's impaired loans are collateral dependent and impairment is measured using the estimated fair value of collateral, less costs to sell. The Company generally uses the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In some cases, the Company obtains external "as is" appraisals for loan collateral, generally when third party participations exist. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. In limited cases, appraised values may be discounted when real estate markets rapidly deteriorate.
A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when the Company has granted a concession and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan.
Loss on debt extinguishments—The Company recognizes the difference between the reacquisition price of debt and the net carrying amount of extinguished debt currently in earnings. Such amounts may include prepayment penalties or the write-off of unamortized debt issuance costs, and are recorded in “Loss on early extinguishment of debt, net” in the Company's consolidated statements of operations.
Derivative instruments and hedging activity—The Company's use of derivative financial instruments is primarily limited to the utilization of interest rate swaps, interest rate caps or other instruments to manage interest rate risk exposure and foreign exchange contracts to manage our risk to changes in foreign currencies.
The Company recognizes derivatives as either assets or liabilities on the Company's consolidated balance sheets at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to changes in the fair value of a recognized asset or liability, a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability.
For derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in Accumulated Other Comprehensive Income as part of the cumulative translation adjustment. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of Accumulated Other Comprehensive Income into earnings when the hedged net investment is either sold or substantially liquidated.
Derivatives that are not designated hedges are considered economic hedges, with changes in fair value reported in current earnings in "Other expense" in the Company's consolidated statements of operations. The Company does not enter into derivatives for trading purposes.
Stock-based compensation—Compensation cost for stock-based awards is measured on the grant date and adjusted over the period of the employees' services to reflect: (i) actual forfeitures; and (ii) the outcome of awards with performance or service conditions through the requisite service period. Compensation cost for market-based awards is determined using a Monte Carlo model to simulate a range of possible future stock prices for the Company's common stock, which is reflected in the grant date fair value. All compensation cost for market-based awards in which the service conditions are met is recognized regardless of whether the market-condition is satisfied. Compensation costs are recognized ratably over the applicable vesting/service period and recorded in "General and administrative" in the Company's consolidated statements of operations.
Income taxes—The Company has elected to be qualified and taxed as a REIT under section 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). The Company is subject to federal income taxation at corporate rates on its REIT taxable income; the Company, however, is allowed a deduction for the amount of dividends paid to its shareholders, thereby subjecting the distributed net income of the Company to taxation at the shareholder level only. While the Company must distribute at least 90% of its taxable income to maintain its REIT status, the Company typically distributes all of its taxable income, if any, to eliminate any tax on undistributed taxable income. In addition, the Company is allowed several other deductions in computing its REIT taxable income, including non-cash items such as depreciation expense and certain specific reserve amounts that the Company deems to be uncollectable. These deductions allow the Company to reduce its dividend payout requirement under federal tax laws. The Company intends to operate in a manner consistent with, and its election to be treated as, a REIT for tax purposes. The Company made foreclosure elections for certain properties acquired through foreclosure, or an equivalent legal process, which
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
allows the Company to operate these properties within the REIT and subjects net income, if any, from these assets to corporate level tax. The carrying value of assets with foreclosure elections as of December 31, 2018 is $113.1 million. Beginning in 2018, the Tax Cuts and Jobs Act reduced the corporate tax rate to 21% from 35% and net income from foreclosure property, if any, is subject to a 21% tax rate.
As of December 31, 2017, the Company had $582.4 million of REIT net operating loss ("NOL") carryforwards at the corporate REIT level that can generally be used to offset both ordinary taxable income and capital gain net income in future years. The NOL carryforwards will expire beginning in 2031 and through 2036 if unused. The amount of NOL carryforwards as of December 31, 2018 will be subject to finalization of the Company's 2018 tax return. The Tax Cuts and Jobs Act reduced the deduction for net operating losses to 80% of the Company’s taxable income for losses incurred after December 31, 2017. The Company's NOL carryforward for losses incurred in taxable years prior to 2018 remain fully deductible. The Company's tax years from 2014 through 2017 remain subject to examination by major tax jurisdictions. During the year ended December 31, 2018, the Company is expected to have REIT taxable income before the deduction for dividends paid and the NOL deduction. The Company recognizes interest expense and penalties related to uncertain tax positions, if any, as "Income tax (expense) benefit" in the Company's consolidated statements of operations.
The Company may participate in certain activities from which it would be otherwise precluded and maintain its qualification as a REIT. These activities are conducted in entities that elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries ("TRS"), is engaged in various real estate related opportunities, primarily related to managing activities related to certain foreclosed assets, as well as managing various investments in equity affiliates. As of December 31, 2018, $538.0 million of the Company's assets were owned by TRS entities. The Company's TRS entities are not consolidated with the REIT for federal income tax purposes and are taxed as corporations. For financial reporting purposes, current and deferred taxes are provided for on the portion of earnings recognized by the Company with respect to its interest in TRS entities.
The following represents the Company's TRS income tax benefit (expense) ($ in thousands):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Current tax benefit (expense)(1)(2) | $ | (447 | ) |  | $ | 531 |  |  | $ | 9,751 |
Total income tax (expense) benefit | $ | (447 | ) |  | $ | 531 |  |  | $ | 9,751 |

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(1) | For the year ended December 31, 2017, the Company recognized a tax benefit for alternative minimum tax credits generated from a carryback of NOLs to 2014 and 2015. For the year ended December 31, 2018, excludes a REIT tax expense of $0.5 million and for the years ended December 31, 2017 and 2016, excludes a REIT income tax benefit of $0.4 million.

(2) | Under the Tax Cuts and Jobs Act, the alternative minimum tax credit carryforward is a refundable tax credit over a four year period beginning in 2018 and ending in 2021 upon which the full amount of the credit will be allowed.

During the year ended December 31, 2018, the Company's TRS entities generated a taxable loss of $25.9 million for which the Company recognized no current tax benefit. The Company’s TRS NOL will be carried forward and the Company’s TRS recorded a full valuation allowance against the related deferred tax asset. During the year ended December 31, 2017, the Company's TRS entities generated a taxable loss of $33.1 million for which the Company recognized no current tax benefit. During the year ended December 31, 2016, the Company's TRS entities generated a taxable loss of $49.4 million, resulting in a current tax benefit of $9.8 million, including a benefit for a return to provision adjustment in the amount of $2.8 million. The 2016 benefit was limited to the amount the Company’s TRS expected to receive after it filed an NOL carryback claim. The remaining balance of its NOL was carried forward and the Company’s TRS recorded a full valuation allowance against the related deferred tax asset.
Total cash paid for taxes for the years ended December 31, 2018, 2017 and 2016 was $2.0 million, $6.0 million and $0.2 million, respectively. The taxes paid in 2017 were primarily alternative minimum taxes at the REIT which the Company expects to be refunded over the next four years.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company applied the corporate tax rate enacted December 22, 2017 under the Tax Cuts and Jobs Act effective for years beginning after 2017 to value its deferred tax assets and liabilities. The Company evaluates whether its deferred tax assets are realizable and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating whether its deferred tax assets are realizable, the Company considers, among other matters, estimates of expected future taxable income, nature of current and
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Based on an assessment of all factors, including historical losses and continued volatility of the activities within the TRS entities, it was determined that full valuation allowances were required on the net deferred tax assets as of December 31, 2018 and 2017, respectively. Changes in estimates of our valuation allowance, if any, are included in "Income tax (expense) benefit" in the consolidated statements of operations. The valuation allowance was reduced to reflect the change in value of our net deferred tax assets that reflects a reduced rate of tax under the Tax Cuts and Jobs Act.
Deferred tax assets and liabilities of the Company's TRS entities were as follows ($ in thousands):

|  | As of December 31,
|  | 2018 |  | 2017
Deferred tax assets(1)(2) |  | $ | 78,107 |  |  | $ | 63,258 |
Valuation allowance |  | (78,107 | ) |  | (63,258 | )
Net deferred tax assets (liabilities) |  | $ | — |  |  | $ | — |

_______________________________________________________________________________

(1) | Deferred tax assets as of December 31, 2018 include temporary differences related primarily to asset basis of $35.3 million, deferred expenses and other items of $14.9 million, NOL carryforwards of $25.6 million and other credits of $2.3 million. Deferred tax assets as of December 31, 2017 include temporary differences related primarily to asset basis of $26.1 million, deferred expenses and other items of $15.9 million and NOL carryforwards of $21.3 million. The Company has determined that the change in tax law associated with the Tax Cuts and Jobs Act will not have a material effect on whether its deferred tax assets are realizable.

(2) | Gross deferred tax assets as of December 31, 2017 were valued at the enacted corporate tax rate during the period in which such deferred tax assets are expected to be realized. The Tax Cuts and Jobs Act reduced the federal corporate tax rate to 21% from 35% for taxable years beginning after December 31, 2017. The Company’s TRS’s applied its reduced effective tax rate to compute its gross deferred tax assets before valuation allowance.

Earnings per share—The Company uses the two-class method in calculating earnings per share ("EPS") when it issues securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company when, and if, the Company declares dividends on its common stock. Basic earnings per share ("Basic EPS") for the Company's common stock are computed by dividing net income allocable to common shareholders by the weighted average number of shares of common stock outstanding for the period, respectively. Diluted earnings per share ("Diluted EPS") is calculated similarly, however, it reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.
Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed a "Participating Security" and are included in the computation of earnings per share pursuant to the two-class method. The Company's unvested restricted stock awards granted under its Long-Term Incentive Plans that are eligible to participate in dividends are considered Participating Securities and have been included in the two-class method when calculating EPS.
New accounting pronouncements—In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ("ASU 2018-16"). ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. ASU 2018-16 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU 2018-16 effective January 1, 2019 and the adoption did not have a material impact on the Company's consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Management is evaluating the impact of the guidance on the Company's consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), and in July 2018, the FASB issued ASU 2018-11, Leases ("ASU 2018-11"), to address two requirements of ASU 2016-02. ASU 2016-02 and ASU 2018-11 are effective for interim
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
and annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating or finance leases. For operating and finance leases, a lessee will be required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its statement of financial position. Lessees under operating leases will be required to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis, and classify all cash payments within operating activities in its statement of cash flows. Lessees under finance leases will be required to recognize interest expense on the lease liability (under the effective interest method) and amortization expense of the right-of-use asset (generally on a straight line basis), each reflected separately in its statement of operations. For operating lease arrangements for which the Company is the lessee, primarily under leases of office space and certain ground leases, the adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and lease liability on its consolidated balance sheets. The right-of-use assets or lease liabilities will not be material to the Company's balance sheet. The accounting applied by the Company as a lessor will be mostly unchanged from that applied under previous GAAP.
Management has decided to elect the practical expedient package that allows the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019; and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. In addition, the Company will elect to not record on its consolidated balance sheets leases whose term is less than 12 months at lease inception.
ASU 2018-11 amends ASU 2016-02 so that: (a) entities may elect to not recast the comparative periods presented when transitioning to ASC 842 by allowing entities to change their initial application to the beginning of the period of adoption; and (b) provides lessors with a practical expedient to not separate non-lease components from the associated lease component of the contractual payments if certain conditions are met. Management has decided to elect both of these provisions.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Note 4—Real Estate
The Company's real estate assets were comprised of the following ($ in thousands):

| Net Lease(1) |  | Operating Properties |  | Total
As of December 31, 2018 |  |  |  |  |
Land, at cost | $ | 336,740 |  |  | $ | 133,599 |  |  | $ | 470,339 |
Buildings and improvements, at cost | 1,487,270 |  |  | 118,724 |  |  | 1,605,994 |
Less: accumulated depreciation | (287,516 | ) |  | (17,798 | ) |  | (305,314 | )
Real estate, net | 1,536,494 |  |  | 234,525 |  |  | 1,771,019 |
Real estate available and held for sale (2) | 1,055 |  |  | 21,496 |  |  | 22,551 |
Total real estate | $ | 1,537,549 |  |  | $ | 256,021 |  |  | $ | 1,793,570 |
As of December 31, 2017 |  |  |  |  |
Land, at cost | $ | 219,092 |  |  | $ | 203,278 |  |  | $ | 422,370 |
Buildings and improvements, at cost | 888,959 |  |  | 318,107 |  |  | 1,207,066 |
Less: accumulated depreciation | (292,268 | ) |  | (55,137 | ) |  | (347,405 | )
Real estate, net | 815,783 |  |  | 466,248 |  |  | 1,282,031 |
Real estate available and held for sale (2) | — |  |  | 68,588 |  |  | 68,588 |
Total real estate | $ | 815,783 |  |  | $ | 534,836 |  |  | $ | 1,350,619 |

_______________________________________________________________________________

(1) | On June 30, 2018, the Company consolidated the Net Lease Venture (refer to Note 7) and recorded $743.6 million to "Real estate, net" on the Company's consolidated balance sheet.

(2) | As of December 31, 2018 and 2017 the Company had $20.6 million and $48.5 million, respectively, of residential condominiums available for sale in its operating properties portfolio.

Real Estate Available and Held for Sale—The following table presents the carrying value of properties transferred to held for sale, by segment ($ in millions)(1):

|  | Year Ended December 31,
Property Type |  | 2018 |  | 2017 |  | 2016
Operating Properties |  | $ | 23.2 |  |  | $ | 20.1 |  |  | $ | 16.1 |
Net Lease |  | 8.1 |  |  | 0.9 |  |  | 1.8 |
Total |  | $ | 31.3 |  |  | $ | 21.0 |  |  | $ | 17.9 |

_______________________________________________________________________________

(1) | Properties were transferred to held for sale due to executed contracts with third parties or changes in business strategy.

Acquisitions—During the year ended December 31, 2018, the Company acquired two net lease assets for an aggregate $14.8 million. During the year ended December 31, 2017, the Company acquired one net lease asset for $6.6 million. In addition, in the third quarter 2017, in conjunction with the modification of two master leases, the Company exchanged real property with the tenant. The fair value of the property exchanged exceeded the Company's cost basis by approximately $1.5 million which will be deferred and amortized to "Operating lease income" in the Company's consolidated statements of operations over the remaining master lease terms.
During the year ended December 31, 2016, the Company acquired one net lease asset for $32.7 million. During the same period, the Company also acquired land for $3.9 million and simultaneously entered into a 99 year ground lease with the seller. This asset was one of the 12 properties comprising the Company's Ground Lease business that was disposed of in April 2017 (see "Disposition of Ground Lease Business" below).
Disposition of Ground Lease Business—In April 2017, institutional investors acquired a controlling interest in the Company's ground lease business through the merger of a Company subsidiary and related transactions (the "Acquisition Transactions"). Ground leases generally represent ownership of the land underlying commercial real estate projects that is triple net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon ("Ground Lease"). The
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Company's Ground Lease business was a component of the Company's net lease segment and consisted of 12 properties subject to long term net leases including seven Ground Leases and one master lease (covering five properties). The acquiring entity was a newly formed unconsolidated entity named Safety, Income & Growth Inc. ("SAFE"). The carrying value of the Company's Ground Lease assets was approximately $161.1 million. Shortly before the Acquisition Transactions, the Company completed the $227.0 million 2017 Secured Financing on its Ground Lease assets (refer to Note 10). The Company received all of the proceeds of the 2017 Secured Financing. The Company received an additional $113.0 million of proceeds in the Acquisition Transactions, including $55.5 million that the Company contributed to SAFE in its initial capitalization. As a result of the Acquisition Transactions, the Company deconsolidated the 12 properties and the associated 2017 Secured Financing. The Company accounts for its investment in SAFE as an equity method investment (refer to Note 7). The Company accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of the Company's retained interest in SAFE. The gain was recorded in "Gain from discontinued operations" in the Company's consolidated statements of operations. As a result of the adoption of ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, on January 1, 2018, the Company recorded an increase to retained earnings of $55.5 million, bringing the Company's aggregate gain on the sale of its Ground Lease business to approximately $178.9 million.
Discontinued Operations—The transactions described above involving the Company's Ground Lease business qualified for discontinued operations and the following table summarizes income from discontinued operations for the years ended December 31, 2017 and 2016 ($ in thousands)(1):

|  | Year Ended December 31,
|  | 2017 |  | 2016
Revenues |  | $ | 5,922 |  |  | $ | 21,839 |
Expenses |  | (1,491 | ) |  | (3,569 | )
Income from sales of real estate |  | 508 |  |  | — |
Income from discontinued operations |  | $ | 4,939 |  |  | $ | 18,270 |

_______________________________________________________________________________

(1) | The transactions closed on April 14, 2017. Revenues primarily consisted of operating lease income and expenses primarily consisted of depreciation and amortization and real estate expense.

The following table presents cash flows provided by operating activities and cash flows used in investing activities from discontinued operations for the years ended December 31, 2017 and 2016 ($ in thousands).

|  | Year Ended December 31,
|  | 2017 |  | 2016
Cash flows provided by operating activities |  | $ | 5,702 |  |  | $ | 16,662 |
Cash flows used in investing activities |  | (534 | ) |  | (7,972 | )

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Other Dispositions—The following table presents the proceeds and income recognized for properties sold, by property type ($ in millions):

|  | Year Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Operating Properties(1) |  |  |  |  |  |
Proceeds |  | $ | 327.9 |  |  | $ | 41.3 |  |  | $ | 326.9 |
Income from sales of real estate |  | 81.0 |  |  | 4.5 |  |  | 75.4 |
Net Lease(2)(3) |  |  |  |  |  |
Proceeds |  | $ | 79.7 |  |  | $ | 175.4 |  |  | $ | 117.2 |
Income from sales of real estate |  | 45.0 |  |  | 87.5 |  |  | 21.1 |
Total |  |  |  |  |  |
Proceeds |  | $ | 407.6 |  |  | $ | 216.7 |  |  | $ | 444.1 |
Income from sales of real estate |  | 126.0 |  |  | 92.0 |  |  | 96.5 |

_______________________________________________________________________________

(1) | During the year ended December 31, 2018, the Company sold 10 commercial operating properties and residential condominium units from other properties and recognized $81.0 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations, of which $9.8 million was attributable to a noncontrolling interest at one of the properties.

(2) | During the year ended December 31, 2018, the Company sold five net lease assets and recognized $45.0 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations.

(3) | During the year ended December 31, 2017, the Company sold one net lease property and recognized a gain on sale of $62.5 million. Prior to the sale, the Company acquired the noncontrolling interest with a carrying value of $3.5 million for $12.0 million.

Impairments—During the years ended December 31, 2018, 2017 and 2016, the Company recorded aggregate impairments on real estate assets totaling $90.4 million, $11.9 million and $10.7 million, respectively. Refer to Note 16 for a description of the impairments recorded during the year ended December 31, 2018. The impairments recorded in 2017 were primarily the result of shifting demand in the local condominium markets, changes in our exit strategy on other real estate assets and an impairment recorded in connection with the sale of an outparcel located at a commercial operating property. The impairments recorded in 2016 resulted from unfavorable local market conditions on residential operating properties and impairments upon the execution of sales contracts on net lease assets.
Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements were $22.4 million, $21.9 million and $23.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.
Allowance for Doubtful Accounts—As of December 31, 2018 and 2017, the allowance for doubtful accounts related to real estate tenant receivables was $1.5 million and $1.3 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.8 million and $1.3 million, respectively. These amounts are included in "Accrued interest and operating lease income receivable, net" and "Deferred operating lease income receivable, net," respectively, on the Company's consolidated balance sheets.
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Notes to Consolidated Financial Statements (Continued)
Future Minimum Operating Lease Payments—Future minimum operating lease payments to be collected under non-cancelable leases, excluding customer reimbursements of expenses, in effect as of December 31, 2018, are as follows ($ in thousands):

Year |  | Net Lease Assets |  | Operating Properties
2019 |  | $ | 156,968 |  |  | $ | 22,400 |
2020 |  | 157,476 |  |  | 21,146 |
2021 |  | 158,453 |  |  | 19,953 |
2022 |  | 160,395 |  |  | 11,358 |
2023 |  | 154,105 |  |  | 10,417 |

Note 5—Land and Development
The Company's land and development assets were comprised of the following ($ in thousands):

| As of December 31,
| 2018 |  | 2017
Land and land development, at cost | $ | 606,849 |  |  | $ | 868,692 |
Less: accumulated depreciation | (8,631 | ) |  | (8,381 | )
Total land and development, net | $ | 598,218 |  |  | $ | 860,311 |

Acquisitions—During the year ended December 31, 2018, the Company acquired, via foreclosure, title to a land asset which had a total fair value of $4.6 million and had previously served as collateral for loans receivable held by the Company. No gain or loss was recorded in connection with this transaction.
During the year ended December 31, 2016, the Company acquired, via deed-in-lieu, title to two land assets which had a total fair value of $40.6 million and previously served as collateral for loans receivable held by the Company. No gain or loss was recorded in connection with these transactions.
Dispositions—During the years ended December 31, 2018, 2017 and 2016, the Company sold land parcels and residential lots and units and recognized land development revenue of $409.7 million, $196.9 million and $88.3 million, respectively. In connection with the sale of two land parcels totaling 93 acres during the year ended December 31, 2018, the Company provided an aggregate $145.0 million of financing to the buyers, of which $81.2 million was repaid in the second quarter 2018. During the years ended December 31, 2018, 2017 and 2016, the Company recognized land development cost of sales of $350.2 million, $180.9 million and $62.0 million, respectively, from its land and development portfolio.
In connection with the resolution of litigation involving a dispute over the purchase and sale of approximately 1,250 acres of land in Prince George’s County, Maryland, during the year ended December 31, 2017, the Company recognized $114.0 million of land development revenue and $106.3 million of land development cost of sales.
During the year ended December 31, 2016, the Company sold a land and development asset to a newly formed unconsolidated entity in which the Company owns a 50.0% equity interest (refer to Note 7). The Company recognized a gain of $8.8 million, reflecting the Company's share of the interest sold to a third party, which was recorded as "Income from sales of real estate" in the Company's consolidated statement of operations.
Impairments—During the year ended December 31, 2018, the Company recorded an aggregate impairment of $56.7 million on five land and development assets. Refer to Note 16 for a description of the impairments recorded during the year ended December 31, 2018. During the year ended December 31, 2017, the Company recorded impairments on land and development assets of $20.5 million resulting from a decrease in expected cash flows on one asset and a change in exit strategy on another asset. During the year ended December 31, 2016, the Company recorded impairments on land and development assets of $3.8 million.
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Notes to Consolidated Financial Statements (Continued)
Note 6—Loans Receivable and Other Lending Investments, net
The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):

| As of December 31,
Type of Investment | 2018 |  | 2017
Senior mortgages | $ | 760,749 |  |  | $ | 791,152 |
Corporate/Partnership loans(1) | 148,583 |  |  | 488,921 |
Subordinate mortgages | 10,161 |  |  | 9,495 |
Total gross carrying value of loans | 919,493 |  |  | 1,289,568 |
Reserves for loan losses | (53,395 | ) |  | (78,489 | )
Total loans receivable, net | 866,098 |  |  | 1,211,079 |
Other lending investments—securities | 122,126 |  |  | 89,576 |
Total loans receivable and other lending investments, net | $ | 988,224 |  |  | $ | 1,300,655 |

_______________________________________________________________________________

(1) | In the second quarter 2018, the Company resolved a non-performing loan with a carrying value of $145.8 million. Refer to "Impaired Loans" section below.

Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Reserve for loan losses at beginning of period | $ | 78,489 |  |  | $ | 85,545 |  |  | $ | 108,165 |
(Recovery of) provision for loan losses(1) | 16,937 |  |  | (5,828 | ) |  | (12,514 | )
Charge-offs | (42,031 | ) |  | (1,228 | ) |  | (10,106 | )
Reserve for loan losses at end of period | $ | 53,395 |  |  | $ | 78,489 |  |  | $ | 85,545 |

______________________________________________________________________________

(1) | For the year ended December 31, 2016, the (recovery of) provision for loan losses includes recoveries of previously recorded asset-specific loan loss reserves of $13.7 million.

The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):

| Individually Evaluated for Impairment(1) |  | Collectively Evaluated for Impairment(2) |  | Total
As of December 31, 2018 |  |  |  |  |
Loans | $ | 66,725 |  |  | $ | 857,662 |  |  | $ | 924,387 |
Less: Reserve for loan losses | (40,395 | ) |  | (13,000 | ) |  | (53,395 | )
Total(3) | $ | 26,330 |  |  | $ | 844,662 |  |  | $ | 870,992 |
As of December 31, 2017 |  |  |  |  |
Loans | $ | 237,877 |  |  | $ | 1,056,944 |  |  | $ | 1,294,821 |
Less: Reserve for loan losses | (60,989 | ) |  | (17,500 | ) |  | (78,489 | )
Total(3) | $ | 176,888 |  |  | $ | 1,039,444 |  |  | $ | 1,216,332 |

_______________________________________________________________________________

(1) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.5 million and $0.7 million as of December 31, 2018 and 2017, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status; therefore, the unamortized amounts associated with these loans are not currently being amortized into income.

(2) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $3.1 million and net premiums of $6.2 million as of December 31, 2018 and 2017, respectively.

(3) | The Company's recorded investment in loans as of December 31, 2018 and 2017 includes accrued interest of $4.9 million and $5.3 million, respectively, which is included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of December 31, 2018 and 2017, the total amounts exclude $122.1 million and $89.6 million, respectively, of securities that are evaluated for impairment under ASC 320.

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Notes to Consolidated Financial Statements (Continued)
Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain and there can be no assurance that actual performance will be similar to current expectation.
The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):

| As of December 31,
| 2018 |  | 2017
| Performing Loans |  | Weighted Average Risk Ratings |  | Performing Loans |  | Weighted Average Risk Ratings
Senior mortgages | $ | 697,807 |  |  | 2.76 |  |  | $ | 713,057 |  |  | 2.72 |
Corporate/Partnership loans | 149,663 |  |  | 2.84 |  |  | 334,364 |  |  | 2.85 |
Subordinate mortgages | 10,192 |  |  | 3.00 |  |  | 9,523 |  |  | 3.00 |
Total | $ | 857,662 |  |  | 2.77 |  |  | $ | 1,056,944 |  |  | 2.77 |

The Company's recorded investment in loans, aged by payment status and presented by class, was as follows ($ in thousands):

As of December 31, 2018 | Current |  | Less Than and Equal to 90 Days |  | Greater Than 90 Days(1) |  | Total Past Due |  | Total
Senior mortgages | $ | 703,807 |  |  | $ | — |  |  | $ | 60,725 |  |  | $ | 60,725 |  |  | $ | 764,532 |
Corporate/Partnership loans | 149,663 |  |  | — |  |  | — |  |  | — |  |  | 149,663 |
Subordinate mortgages | 10,192 |  |  | — |  |  | — |  |  | — |  |  | 10,192 |
Total | $ | 863,662 |  |  | $ | — |  |  | $ | 60,725 |  |  | $ | 60,725 |  |  | $ | 924,387 |
As of December 31, 2017 |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 719,057 |  |  | $ | — |  |  | $ | 75,343 |  |  | $ | 75,343 |  |  | $ | 794,400 |
Corporate/Partnership loans | 334,364 |  |  | — |  |  | 156,534 |  |  | 156,534 |  |  | 490,898 |
Subordinate mortgages | 9,523 |  |  | — |  |  | — |  |  | — |  |  | 9,523 |
Total | $ | 1,062,944 |  |  | $ | — |  |  | $ | 231,877 |  |  | $ | 231,877 |  |  | $ | 1,294,821 |

_______________________________________________________________________________

(1) | As of December 31, 2018, the Company had two loans which were greater than 90 days delinquent and were in various stages of resolution, including legal and foreclosure-related proceedings and environmental matters, and ranged from 4.0 to 9.0 years outstanding. As of December 31, 2017, the Company had four loans which were greater than 90 days delinquent and were in various stages of resolution, including legal and foreclosure-related proceedings and environmental matters, and ranged from 1.0 to 9.0 years outstanding.

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Notes to Consolidated Financial Statements (Continued)
Impaired Loans—In the second quarter 2018, the Company resolved a non-performing loan with a carrying value of $145.8 million. The Company received a $45.8 million cash payment and a preferred equity investment with a face value of $100.0 million that is mandatorily redeemable in five years. The Company recorded the preferred equity at its fair value of $77.0 million and are accruing interest over the expected duration of the investment. In addition, the Company recorded a $21.4 million loan loss provision and simultaneously charged-off of the remaining unpaid balance.
The Company's recorded investment in impaired loans, presented by class, were as follows ($ in thousands)(1):

| As of December 31, 2018 |  | As of December 31, 2017
| Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | $ | 66,725 |  |  | $ | 66,777 |  |  | $ | (40,395 | ) |  | $ | 81,343 |  |  | $ | 81,431 |  |  | $ | (48,518 | )
Corporate/Partnership loans | — |  |  | — |  |  | — |  |  | 156,534 |  |  | 145,849 |  |  | (12,471 | )
Total | $ | 66,725 |  |  | $ | 66,777 |  |  | $ | (40,395 | ) |  | $ | 237,877 |  |  | $ | 227,280 |  |  | $ | (60,989 | )

_______________________________________________________________________________

(1) | All of the Company's non-accrual loans are considered impaired and included in the table above.

The Company's average recorded investment in impaired loans and interest income recognized, presented by class, was as follows ($ in thousands):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
| Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,661 |  |  | $ | 226 |
Subordinate mortgages | — |  |  | 301 |  |  | 6,582 |  |  | 1,127 |  |  | 6,799 |  |  | — |
Subtotal | — |  |  | 301 |  |  | 6,582 |  |  | 1,127 |  |  | 10,460 |  |  | 226 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 67,041 |  |  | — |  |  | 82,749 |  |  | — |  |  | 118,921 |  |  | — |
Corporate/Partnership loans | 39,169 |  |  | — |  |  | 156,756 |  |  | — |  |  | 66,101 |  |  | — |
Subtotal | 106,210 |  |  | — |  |  | 239,505 |  |  | — |  |  | 185,022 |  |  | — |
Total: |  |  |  |  |  |  |  |  |  |  |
Senior mortgages | 67,041 |  |  | — |  |  | 82,749 |  |  | — |  |  | 122,582 |  |  | 226 |
Corporate/Partnership loans | 39,169 |  |  | — |  |  | 156,756 |  |  | — |  |  | 66,101 |  |  | — |
Subordinate mortgages | — |  |  | 301 |  |  | 6,582 |  |  | 1,127 |  |  | 6,799 |  |  | — |
Total | $ | 106,210 |  |  | $ | 301 |  |  | $ | 246,087 |  |  | $ | 1,127 |  |  | $ | 195,482 |  |  | $ | 226 |

There was no interest income related to the resolution of non-performing loans recorded during the years ended December 31, 2018, 2017 and 2016.
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Notes to Consolidated Financial Statements (Continued)
Securities—Other lending investments—securities include the following ($ in thousands):

| Face Value |  | Amortized Cost Basis |  | Net Unrealized Gain |  | Estimated Fair Value |  | Net Carrying Value
As of December 31, 2018 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 21,185 |  |  | $ | 21,185 |  |  | $ | 476 |  |  | $ | 21,661 |  |  | $ | 21,661 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Debt securities | 120,866 |  |  | 100,465 |  |  | 7 |  |  | 100,472 |  |  | 100,465 |
Total | $ | 142,051 |  |  | $ | 121,650 |  |  | $ | 483 |  |  | $ | 122,133 |  |  | $ | 122,126 |
As of December 31, 2017 |  |  |  |  |  |  |  |  |
Available-for-Sale Securities |  |  |  |  |  |  |  |  |
Municipal debt securities | $ | 21,230 |  |  | $ | 21,230 |  |  | $ | 1,612 |  |  | $ | 22,842 |  |  | $ | 22,842 |
Held-to-Maturity Securities |  |  |  |  |  |  |  |  |
Debt securities | 66,618 |  |  | 66,734 |  |  | 1,581 |  |  | 68,315 |  |  | 66,734 |
Total | $ | 87,848 |  |  | $ | 87,964 |  |  | $ | 3,193 |  |  | $ | 91,157 |  |  | $ | 89,576 |

As of December 31, 2018, the contractual maturities of the Company's securities were as follows ($ in thousands):

| Held-to-Maturity Securities |  | Available-for-Sale Securities
| Amortized Cost Basis |  | Estimated Fair Value |  | Amortized Cost Basis |  | Estimated Fair Value
Maturities |  |  |  |  |  |  |
Within one year | $ | 20,859 |  |  | $ | 20,866 |  |  | $ | — |  |  | $ | — |
After one year through 5 years | 79,606 |  |  | 79,606 |  |  | — |  |  | — |
After 5 years through 10 years | — |  |  | — |  |  | — |  |  | — |
After 10 years | — |  |  | — |  |  | 21,185 |  |  | 21,661 |
Total | $ | 100,465 |  |  | $ | 100,472 |  |  | $ | 21,185 |  |  | $ | 21,661 |

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Notes to Consolidated Financial Statements (Continued)
Note 7—Other Investments
The Company's other investments and its proportionate share of earnings (losses) from equity method investments were as follows ($ in thousands):

| Carrying Value |  | Equity in Earnings (Losses)
| As of December 31, |  | For the Years Ended December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017 |  | 2016
Real estate equity investments |  |  |  |  |  |  |  |  |
Safety, Income & Growth Inc. ("SAFE")(1)(2) | $ | 149,589 |  |  | $ | 83,868 |  |  | $ | 4,711 |  |  | $ | 551 |  |  | $ | — |
iStar Net Lease II LLC ("Net Lease Venture II") | 16,215 |  |  | — |  |  | (333 | ) |  | — |  |  | — |
iStar Net Lease I LLC ("Net Lease Venture")(3) | — |  |  | 121,139 |  |  | 4,100 |  |  | 4,534 |  |  | 3,567 |
Other real estate equity investments(2)(4) | 130,955 |  |  | 102,616 |  |  | (4,112 | ) |  | 6,520 |  |  | 63,875 |
Subtotal | 296,759 |  |  | 307,623 |  |  | 4,366 |  |  | 11,605 |  |  | 67,442 |
Other strategic investments(5) | 7,516 |  |  | 13,618 |  |  | (9,373 | ) |  | 1,410 |  |  | 9,907 |
Total | $ | 304,275 |  |  | $ | 321,241 |  |  | $ | (5,007 | ) |  | $ | 13,015 |  |  | $ | 77,349 |

_______________________________________________________________________________

(1) | On January 2, 2019, the Company made an additional $250.0 million cash investment in newly designated limited partnership units (the "Investor Units") of SAFE's operating partnership ("SAFE OP") (refer to Note 19). For the year ended December 31, 2017, equity in earnings is for the period from April 14, 2017 to December 31, 2017.

(2) | On January 1, 2018, the Company recorded a step-up in basis to fair value of its retained noncontrolling interest relating to the sale of its Ground Lease business (refer to Note 4) and other transactions where the Company sold or contributed real estate to a venture and previously recognized partial gains. Prior to the adoption of ASU 2017-05, the Company was required to recognize gains on only the portion of its interest transferred to third parties and was precluded from recognizing a gain on its retained noncontrolling interest, which was carried at the Company’s historical cost basis.

(3) | The Company consolidated the assets and liabilities of the Net Lease Venture on June 30, 2018 (refer to Net Lease Venture below).

(4) | During the year ended December 31, 2018, the Company recorded a $6.1 million impairment on a land and development equity method investment due to a change in business strategy. During the year ended December 31, 2016, a majority-owned consolidated subsidiary of the Company sold its interest in a real estate equity method investment for net proceeds of $39.8 million and recognized equity in earnings of $31.5 million, of which $10.1 million was attributable to the noncontrolling interest. In addition, the Company received a distribution from one of its real estate equity method investments and recognized equity in earnings during the year ended December 31, 2016 of $11.6 million.

(5) | For the year ended December 31, 2018, equity in earnings (losses) includes a $10.0 million impairment on a foreign equity method investment due to local market conditions.

Safety, Income & Growth Inc.—The Company and two institutional investors capitalized SIGI Acquisition, Inc. ("SIGI") on April 14, 2017 to acquire, manage and capitalize Ground Leases. The Company contributed $55.5 million for an initial 49.1% noncontrolling interest in SIGI and the two institutional investors contributed an aggregate $57.5 million for an initial 50.9% controlling interest in SIGI. A wholly-owned subsidiary of the Company that held the Company's Ground Lease business and assets merged with and into SIGI on April 14, 2017 with SIGI surviving the merger and being renamed Safety, Income & Growth Inc. ("SAFE"). Through this merger and related transactions, the institutional investors acquired a controlling interest in the Company's Ground Lease business. The Company's carrying value of the Ground Lease assets was approximately $161.1 million. Shortly before the Acquisition Transactions, the Company completed the $227.0 million 2017 Secured Financing on its Ground Lease assets (refer to Note 10). The Company received all of the proceeds of the 2017 Secured Financing. The Company received an additional $113.0 million of proceeds in the Acquisition Transactions, including $55.5 million that the Company contributed to SAFE in its initial capitalization. As a result of the Acquisition Transactions, the Company deconsolidated the 12 properties and the associated 2017 Secured Financing. The Company accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of the Company's retained interest in SAFE. As a result of the adoption of ASU 2017-05, on January 1, 2018, the Company recorded an increase to retained earnings of $55.5 million, bringing the Company's aggregate gain on the sale of its Ground Lease business to approximately $178.9 million.
On June 27, 2017, SAFE completed its initial public offering (the "Offering") raising $205.0 million in gross proceeds and concurrently completed a $45.0 million private placement to the Company. In addition, the Company paid $18.9 million in organization and offering costs of the up to $25.0 million in organization and offering costs it agreed to pay in connection with the Offering and concurrent private placement. The Company expensed the portion of offering costs that was attributable to other investors in "Other expense" in the Company's consolidated statements of operations and capitalized the portion of offering costs attributable to the Company's ownership interest in "Other investments" on the Company's consolidated balance sheets. Subsequent to the initial public offering and through December 31, 2018, the Company purchased 2.4 million shares of SAFE's common stock for $45.7 million, representing an average cost of $18.69 per share, pursuant to 10b5-1 plans in accordance with Rules 10b5-1 and
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Notes to Consolidated Financial Statements (Continued)
10b-18 under the Securities and Exchange Act of 1934, as amended, under which the Company could buy shares of SAFE's common stock in the open market. The Company also purchased an additional 133,524 shares of SAFE's common stock in open market and negotiated transactions for $2.2 million, representing an average cost of $16.39 per share. As of December 31, 2018, the Company owned approximately 41.8% of SAFE's common stock outstanding.
A wholly-owned subsidiary of the Company is the external manager of SAFE and is entitled to a management fee. In connection with the Company's $250.0 million cash investment in Investor Units of SAFE OP (refer to Note 19), the management agreement was amended on January 2, 2019. Highlights of the management agreement terms are included below:

• | We received no management fee through June 30, 2018, which covered the first year of the management agreement;

• | We receive a fee equal to 1.0% of total SAFE equity (as defined in the management agreement) up to $1.5 billion; 1.25% of total SAFE equity (for incremental equity of $1.5 billion - $3.0 billion); 1.375% of total SAFE equity (for incremental equity of $3.0 billion - $5.0 billion); and 1.5% of total SAFE equity (for incremental equity over $5.0 billion);

• | Fee to be paid in cash or in shares of SAFE common stock, at the discretion of SAFE's independent directors;

• | The stock will be locked up for two years, subject to certain restrictions;

• | There is no additional performance or incentive fee;

• | From January 1, 2019 through June 30, 2022, the management agreement is non-terminable by SAFE except for cause; and

• | Automatic annual renewals thereafter, subject to non-renewal upon certain findings by SAFE's independent directors and payment of termination fee equal to three times the prior year's management fee, subject to SAFE having raised $820 million of total equity since inception.

The Company is also entitled to receive expense reimbursements, including for the allocable costs of its personnel that perform certain legal, accounting, due diligence tasks and other services that third-party professionals or outside consultants otherwise would perform. The Company waived both the management fee and certain of the expense reimbursements through June 30, 2018. For the six months ended June 30, 2018, the Company waived $1.8 million and $0.8 million, respectively, of management fees and expense reimbursements. For the six months ended December 31, 2018, the Company recorded $1.8 million and $0.7 million, respectively, of management fees and expense reimbursements. In the fourth quarter 2018, the Company received 45,941 shares of SAFE's common stock for payment of the management fee for the three months ended September 30, 2018. Subsequent to December 31, 2018, the Company was issued 46,020 shares of SAFE's common stock for payment of the management fee for the three months ended December 31, 2018. The Company has an exclusivity agreement with SAFE pursuant to which it agreed, subject to certain exceptions, that it will not acquire, originate, invest in, or provide financing for a third party’s acquisition of, a Ground Lease unless it has first offered that opportunity to SAFE and a majority of its independent directors has declined the opportunity.
Following is a list of investments that the Company has transacted with SAFE:
In August 2017, the Company committed to provide a $24.0 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan had an initial term of one year and was extended for an additional year and will be used for the renovation of a medical office building in Atlanta, GA. $17.0 million of the loan was funded as of December 31, 2018. During the year ended December 31, 2018, the Company recorded $1.4 million of interest income on the loan. The transaction was approved by the Company's and SAFE's independent directors.
In October 2017, the Company closed on a 99-year Ground Lease and a $80.5 million construction financing commitment to support the ground-up development of Great Oaks Multifamily, a to-be-built 301-unit community within the Great Oaks Master Plan of San Jose, CA. The transaction includes a combination of: (i) a newly created Ground Lease and up to a $7.2 million leasehold improvement allowance; and (ii) a $80.5 million leasehold first mortgage. The Company entered into a forward purchase contract with SAFE under which SAFE would acquire the Ground Lease in November 2020 for approximately $34.0 million. The forward purchase contract was approved by the Company's and SAFE's independent directors.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
In May 2018, the Company provided a $19.9 million leasehold mortgage loan to the ground lessee of a Ground Lease originated at SAFE. The loan has an initial term of one year and will be used for the acquisition of 100 and 200 Glenridge Point, two multi-tenant office buildings in Atlanta, GA. During the year ended December 31, 2018, the Company recorded $1.4 million of interest income on the loan. The transaction was approved by the Company's and SAFE's independent directors.
In June 2018, the Company sold two industrial facilities located in Miami, FL to a third-party and simultaneously structured and entered into two Ground Leases. The Company then sold the two Ground Leases to SAFE. Net proceeds from the transactions totaled $36.1 million and the Company recognized a $24.5 million gain on sale. The transactions were approved by the Company's and SAFE's independent directors.
Net Lease Venture—In February 2014, the Company partnered with a sovereign wealth fund to form the Net Lease Venture to acquire and develop net lease assets and gave a right of first offer to the venture on all new net lease investments. The Company and its partner had joint decision making rights pertaining to the acquisition of new investments. Upon the expiration of the investment period on June 30, 2018, the Company obtained control of the venture through its unilateral rights of management and disposition of the assets. As a result, the expiration of the investment period resulted in a reconsideration event under GAAP and the Company determined that the Net Lease Venture is a VIE for which the Company is the primary beneficiary. Effective June 30, 2018, the Company consolidated the Net Lease Venture as an asset acquisition under ASC 810. The Company recorded a gain of $67.9 million in "Gain on consolidation of equity method investment" in the Company's consolidated statement of operations as a result of the consolidation. The Net Lease Venture had previously been accounted for as an equity method investment. The Company has an equity interest in the Net Lease Venture of approximately 51.9% and recorded a $188.3 million increase to "Noncontrolling interests" and $11.8 million increase to "Redeemable noncontrolling interest" on the Company's consolidated balance sheet as a result of the consolidation. The Company acquired the redeemable noncontrolling interest in the fourth quarter 2018. The Company is responsible for sourcing new opportunities and managing the venture and its assets in exchange for a management fee and incentive fee. Several of the Company's senior executives whose time is substantially devoted to the Net Lease Venture own a total of 0.6% equity ownership in the venture via co-investment. These senior executives are also entitled to an amount equal to 50% of any incentive fee received based on the 47.5% partner's interest.
During the year ended December 31, 2017, the Net Lease Venture acquired industrial properties for $59.0 million. During the year ended December 31, 2017, the Company sold a net lease asset for proceeds of $6.2 million, which approximated its carrying value net of financing, to the Net Lease Venture and derecognized the associated $18.9 million financing. During the year ended December 31, 2017, the Company made contributions of $49.2 million to the Net Lease Venture and received distributions of $26.0 million from the Net Lease Venture.
During the year ended December 31, 2016, the Net Lease Venture acquired two office properties and the Company made contributions to the Net Lease Venture of $37.7 million. In November 2016, the Net Lease Venture placed five year non-recourse financing of $29.0 million on one of its net lease assets. Net proceeds from the financing were distributed to the members of which the Company received $13.2 million.
As of December 31, 2017, the venture's carrying value of total assets was $658.3 million. During the years ended December 31, 2018, 2017 and 2016, the Company recorded $1.3 million, $2.1 million and $1.6 million, respectively, of management fees from the Net Lease Venture. The management fees are included in "Other income" in the Company's consolidated statements of operations. In addition, beginning after the Company's consolidation of the Net Lease Venture on June 30, 2018 and after the effect of eliminations, the Company earned $0.7 million of management fees with respect to services provided to other investors in the Net Lease Venture, which was recorded as a reduction to "Net income attributable to noncontrolling interests" in the Company's consolidated statements of operations.
Net Lease Venture II—In July 2018, the Company entered into a new venture ("Net Lease Venture II") with an investment strategy similar to the Net Lease Venture. The Net Lease Venture II has a right of first offer on all new net lease investments (excluding Ground Leases) originated by the Company. The Company has an equity interest in the new venture of approximately 51.9%, which will be accounted for as an equity method investment, and is responsible for managing the venture in exchange for a management fee and incentive fee. During the year ended December 31, 2018, the Company recorded $0.4 million of management fees from the Net Lease Venture II.
In December 2018, Net Lease Venture II acquired four buildings comprising 168,636 square feet (the "Properties") located in Livermore, CA. Net Lease Venture II acquired the Properties for $31.2 million which are 100% leased with four separate leases and which each have 10 years of term remaining.
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Notes to Consolidated Financial Statements (Continued)
Other real estate equity investments—As of December 31, 2018, the Company's other real estate equity investments include equity interests in real estate ventures ranging from 16% to 95%, comprised of investments of $65.6 million in operating properties and $65.3 million in land assets. As of December 31, 2017, the Company's other real estate equity investments included $38.8 million in operating properties and $63.8 million in land assets.
In August 2018, the Company provided a $33.0 million mezzanine loan, of which $28.4 million was funded as of December 31, 2018, to an unconsolidated entity in which the Company owns a 50% equity interest. As of December 31, 2018, the loan is included in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheet. During the year ended December 31, 2018, the Company recorded $1.1 million of interest income on the mezzanine loan.
In December 2016, the Company sold a land and development asset for $36.0 million to a newly formed unconsolidated entity in which the Company owns a 50.0% equity interest. The Company recognized a gain of $8.8 million, reflecting the Company's share of the interest sold to a third party, which was recorded as "Income from sales of real estate" in the Company's consolidated statements of operations. As a result of the adoption of ASU 2017-05, on January 1, 2018, the Company recorded an increase to retained earnings of $8.8 million, bringing the Company's aggregate gain to approximately $17.6 million. The Company and its partner both made $7.0 million contributions to the venture and the Company provided financing to the entity in the form of a $27.0 million senior loan, of which $27.0 million and $25.4 million was funded as of December 31, 2018 and 2017, respectively, and is included in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheets. The Company received $17.6 million of net proceeds from the sale of the asset. This entity is a VIE and the Company does not have a controlling interest due to shared control of the entity with its partner. During the years ended December 31, 2018, 2017 and 2016, the Company recorded $2.1 million, $1.9 million and $0.1 million, respectively, of interest income on the senior loan.
Other strategic investments—As of December 31, 2018 and 2017, the Company also had investments in real estate related funds and other strategic investments in real estate entities.
Summarized investee financial information—The following tables present the investee level summarized financial information of the Company's equity method investments ($ in thousands):

|  | As of December 31, |  |  | For the Years Ended December 31,
|  | 2018 |  | 2017 |  |  | 2018 |  | 2017 |  | 2016
Balance Sheets |  |  |  |  |  | Income Statements |  |  |  |  |
Total assets |  | $ | 2,118,045 |  |  | $ | 2,493,798 |  |  | Revenues | $ | 262,970 |  |  | $ | 261,867 |  |  | $ | 272,281 |
Total liabilities |  | 1,016,502 |  |  | 1,169,125 |  |  | Expenses | (187,257 | ) |  | (167,999 | ) |  | (227,720 | )
Noncontrolling interests |  | 2,007 |  |  | 13,258 |  |  | Net income attributable to parent entities | 75,056 |  |  | 91,633 |  |  | 42,209 |
Total equity attributable to parent entities |  | 1,099,536 |  |  | 1,311,415 |  |  |  |  |  |  |  |

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Notes to Consolidated Financial Statements (Continued)
Note 8—Other Assets and Other Liabilities
Deferred expenses and other assets, net, consist of the following items ($ in thousands):

| As of December 31,
| 2018 |  | 2017
Intangible assets, net(1) | $ | 156,281 |  |  | $ | 27,124 |
Other receivables(2) | 46,887 |  |  | 56,369 |
Restricted cash | 42,793 |  |  | 20,045 |
Other assets(3) | 32,333 |  |  | 23,081 |
Leasing costs, net(4) | 6,224 |  |  | 9,050 |
Corporate furniture, fixtures and equipment, net(5) | 3,850 |  |  | 4,652 |
Deferred financing fees, net | 900 |  |  | 1,409 |
Deferred expenses and other assets, net | $ | 289,268 |  |  | $ | 141,730 |

_______________________________________________________________________________

(1) | Intangible assets, net includes above market and in-place lease assets and lease incentives related to the acquisition of real estate assets. On June 30, 2018, the Company consolidated the Net Lease Venture (refer to Note 7) and recorded $135.3 million of intangible assets to "Deferred expenses and other assets, net" on the Company's consolidated balance sheet. Accumulated amortization on intangible assets, net was $27.0 million and $34.9 million as of December 31, 2018 and 2017, respectively. The amortization of above market leases and lease incentive assets decreased operating lease income in the Company's consolidated statements of operations by $2.2 million, $2.5 million and $3.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. These intangible lease assets are amortized over the term of the lease. The amortization expense for in-place leases was $7.2 million, $1.9 million and $1.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts are included in "Depreciation and amortization" in the Company's consolidated statements of operations. As of December 31, 2018, the weighted average amortization period for the Company's intangible assets was approximately 22.3 years.

(2) | As of December 31, 2018 and 2017, includes $26.0 million of reimbursements receivable related to the construction and development of an operating property.

(3) | Other assets primarily includes derivative assets, prepaid expenses and deposits for certain real estate assets.

(4) | Accumulated amortization of leasing costs was $4.4 million and $4.7 million as of December 31, 2018 and 2017, respectively.

(5) | Accumulated depreciation on corporate furniture, fixtures and equipment was $11.9 million and $10.5 million as of December 31, 2018 and 2017, respectively.

Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):

| As of December 31,
| 2018 |  | 2017
Other liabilities(1) | $ | 143,808 |  |  | $ | 79,015 |
Accrued expenses(2) | 97,007 |  |  | 101,035 |
Accrued interest payable | 42,669 |  |  | 49,933 |
Intangible liabilities, net(3) | 35,108 |  |  | 8,021 |
Accounts payable, accrued expenses and other liabilities | $ | 318,592 |  |  | $ | 238,004 |

_______________________________________________________________________________

(1) | As of December 31, 2018 and 2017, "Other liabilities" includes $18.5 million and $29.2 million, respectively, related to profit sharing arrangements with developers for certain properties sold. As of December 31, 2018 and 2017, includes $0.5 million and $1.6 million, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets. As of December 31, 2018 and 2017, "Other liabilities" also includes $9.4 million and $6.2 million, respectively related to tax increment financing bonds which were issued by government entities to fund development within two of the Company's land projects. The amount represents tax assessments associated with each project, which will decrease as the Company sells units.

(2) | As of December 31, 2018 and 2017, accrued expenses includes $1.9 million and $2.5 million, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets.

(3) | Intangible liabilities, net includes below market lease liabilities related to the acquisition of real estate assets. On June 30, 2018, the Company consolidated the Net Lease Venture (refer to Note 7) and recorded $34.3 million of intangible liabilities to "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheet. Accumulated amortization on below market leases was $2.8 million and $7.8 million as of December 31, 2018 and 2017, respectively. The amortization of below market leases increased operating lease income in the Company's consolidated statements of operations by $3.9 million, $1.3 million and $1.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the weighted average amortization period for the Company's intangible liabilities was approximately 22.8 years.

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Intangible assets—The estimated expense from the amortization of intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands):

2019 | $ | 8,833 |
2020 | 8,702 |
2021 | 8,701 |
2022 | 8,700 |
2023 | 8,579 |

Note 9—Loan Participations Payable, net
The Company's loan participations payable, net were as follows ($ in thousands):

|  | Carrying Value as of
|  | December 31, 2018 |  | December 31, 2017
Loan participations payable(1) |  | $ | 22,642 |  |  | $ | 102,737 |
Debt discounts and deferred financing costs, net |  | (158 | ) |  | (312 | )
Total loan participations payable, net |  | $ | 22,484 |  |  | $ | 102,425 |

_______________________________________________________________________________

(1) | As of December 31, 2018, the Company had one loan participation payable with an interest rate of 7.0%. As of December 31, 2017, the Company had two loan participations payable with a weighted average interest rate of 6.5%.

Loan participations represent transfers of financial assets that did not meet the sales criteria established under ASC Topic 860 and are accounted for as loan participations payable, net as of December 31, 2018 and 2017. As of December 31, 2018 and 2017, the corresponding loan receivable balances were $22.5 million and $102.3 million, respectively, and are included in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheets. The principal and interest due on these loan participations payable are paid from cash flows of the corresponding loans receivable, which serve as collateral for the participations.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Note 10—Debt Obligations, net
The Company's debt obligations were as follows ($ in thousands):

| Carrying Value as of December 31, |  | Stated Interest Rates |  | Scheduled Maturity Date
| 2018 |  | 2017 |  |
Secured credit facilities and mortgages: |  |  |  |  |  |  |
2015 $325 Million Revolving Credit Facility | $ | — |  |  | $ | 325,000 |  |  | LIBOR + 2.50% | (1) | September 2020
2016 Senior Term Loan | 646,750 |  |  | 399,000 |  |  | LIBOR + 2.75% | (2) | June 2023
Mortgages collateralized by net lease assets(3) | 802,367 |  |  | 208,491 |  |  | 3.62% - 7.26% | (4) |
Total secured credit facilities and mortgages | 1,449,117 |  |  | 932,491 |  |  |  |  |
Unsecured notes: |  |  |  |  |  |  |
5.00% senior notes(5) | 375,000 |  |  | 770,000 |  |  | 5.00% |  | July 2019
4.625% senior notes(6) | 400,000 |  |  | 400,000 |  |  | 4.625% |  | September 2020
6.50% senior notes(7) | 275,000 |  |  | 275,000 |  |  | 6.50% |  | July 2021
6.00% senior notes(8) | 375,000 |  |  | 375,000 |  |  | 6.00% |  | April 2022
5.25% senior notes(9) | 400,000 |  |  | 400,000 |  |  | 5.25% |  | September 2022
3.125% senior convertible notes(10) | 287,500 |  |  | 287,500 |  |  | 3.125% |  | September 2022
Total unsecured notes | 2,112,500 |  |  | 2,507,500 |  |  |  |  |
Other debt obligations: |  |  |  |  |  |  |
Trust preferred securities | 100,000 |  |  | 100,000 |  |  | LIBOR + 1.50% |  | October 2035
Total debt obligations | 3,661,617 |  |  | 3,539,991 |  |  |  |  |
Debt discounts and deferred financing costs, net | (52,531 | ) |  | (63,591 | ) |  |  |  |
Total debt obligations, net (11) | $ | 3,609,086 |  |  | $ | 3,476,400 |  |  |  |  |

_______________________________________________________________________________

(1) | The loan bears interest at the Company's election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.5% or (c) LIBOR plus 1.0% and subject to a margin ranging from 1.25% to 1.75%; or (ii) LIBOR subject to a margin ranging from 2.25% to 2.75%. At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2021.

(2) | The loan bears interest at the Company's election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.5% or (c) LIBOR plus 1.0% and subject to a margin of 1.75%; or (ii) LIBOR subject to a margin of 2.75%.

(3) | On June 30, 2018, the Company consolidated the Net Lease Venture and recorded $464.7 million to "Debt obligations, net" on the Company's consolidated balance sheet.

(4) | As of December 31, 2018, the weighted average interest rate of these loans is 4.4% inclusive of the effect of interest rate swaps.

(5) | The Company can prepay these senior notes without penalty. Subsequent to December 31, 2018, the Company called for redemption the remaining principal amount of these notes on March 7, 2019.

(6) | The Company can prepay these senior notes without penalty beginning June 15, 2020.

(7) | The Company can prepay these senior notes without penalty beginning July 1, 2020.

(8) | The Company can prepay these senior notes without penalty beginning April 1, 2021.

(9) | The Company can prepay these senior notes without penalty beginning September 15, 2021.

(10) | The Company's 3.125% senior convertible fixed rate notes due September 2022 ("3.125% Convertible Notes") are convertible at the option of the holders at a conversion rate of 65.47 shares per $1,000 principal amount of 3.125% Convertible Notes, which equals a conversion price of $15.27 per share, at any time prior to the close of business on the business day immediately preceding September 15, 2022. Upon conversion, the Company will pay or deliver, as the case may be, a combination of cash and shares of its common stock. As such, at issuance in September 2017, the Company valued the liability component at $221.8 million, net of fees, and the equity component of the conversion feature at $22.5 million, net of fees, and recorded the equity component in "Additional paid-in capital" on the Company's consolidated balance sheet. In October 2017, the initial purchasers of the 3.125% Convertible Notes exercised their option to purchase an additional $37.5 million aggregate principal amount of the 3.125% Convertible Notes. At issuance, the Company valued the liability component at $34.0 million, net of fees, and the equity component of the conversion feature at $3.4 million, net of fees, and recorded the equity component in "Additional paid-in capital" on the Company's consolidated balance sheet. As of December 31, 2018, the carrying value of the 3.125% Convertible Notes was $262.6 million, net of fees, and the unamortized discount of the 3.125% Convertible Notes was $20.5 million, net of fees. As of December 31, 2017, the carrying value of the 3.125% Convertible Notes was $256.7 million, net of fees, and the unamortized discount of the 3.125% Convertible Notes was $25.2 million, net of fees. During the years ended December 31, 2018 and 2017, the Company recognized $9.0 million and $2.5 million, respectively, of contractual interest and $4.7 million and $1.3 million, respectively, of discount amortization on the 3.125% Convertible Notes. The effective interest rate for 2018 and 2017 was 5.2%.

(11) | The Company capitalized interest relating to development activities of $11.3 million, $8.5 million and $5.8 million for the years ended December 31, 2018, 2017 and 2016, respectively.

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Future Scheduled Maturities—As of December 31, 2018, future scheduled maturities of outstanding debt obligations are as follows ($ in thousands):

| Unsecured Debt |  | Secured Debt |  | Total
2019 | $ | 375,000 |  |  | $ | 434 |  |  | $ | 375,434 |
2020 | 400,000 |  |  | — |  |  | 400,000 |
2021 | 275,000 |  |  | 161,914 |  |  | 436,914 |
2022 | 1,062,500 |  |  | 48,968 |  |  | 1,111,468 |
2023 | — |  |  | 646,750 |  |  | 646,750 |
Thereafter | 100,000 |  |  | 591,051 |  |  | 691,051 |
Total principal maturities | 2,212,500 |  |  | 1,449,117 |  |  | 3,661,617 |
Unamortized discounts and deferred financing costs, net | (41,267 | ) |  | (11,264 | ) |  | (52,531 | )
Total debt obligations, net | $ | 2,171,233 |  |  | $ | 1,437,853 |  |  | $ | 3,609,086 |

_______________________________________________________________________________

(1) | Subsequent to December 31, 2018, the Company called for redemption $375.0 million principal amount of senior notes on March 7, 2019.

2017 Secured Financing—In March 2017, the predecessor of SAFE (which at the time was comprised of the Company's wholly-owned subsidiaries conducting its Ground Lease business) entered into a $227.0 million secured financing transaction (the "2017 Secured Financing") that accrued interest at 3.795% and matures in April 2027. The 2017 Secured Financing was collateralized by the 12 properties comprising SAFE's initial portfolio. In connection with the 2017 Secured Financing, the Company incurred $7.3 million of lender and third-party fees, substantially all of which was capitalized in "Debt obligations, net" on the Company's consolidated balance sheets. In April 2017, the Company derecognized the 2017 Secured Financing when third parties acquired a controlling interest in SAFE's predecessor, prior to SAFE's initial public offering (refer to Note 4).
The Company is providing a limited recourse guaranty and environmental indemnity under the 2017 Secured Financing that will remain in effect until SAFE has achieved either an equity market capitalization of at least $500.0 million (inclusive of the initial portfolio that the Company contributed to SAFE) or a net worth of at least $250.0 million (exclusive of the initial portfolio that the Company contributed to SAFE), and SAFE or another replacement guarantor provides similar guaranties and indemnities to the lenders. The management agreement with SAFE provides that SAFE may not terminate the management agreement unless a successor guarantor reasonably acceptable to the Company has agreed to replace the Company as guarantor and indemnitor or has provided the Company with a reasonably acceptable indemnity for any losses suffered by the Company as guarantor and indemnitor. SAFE has generally agreed to indemnify the Company for any amounts the Company is required to pay, or other losses the Company may suffer, under the limited recourse guaranty and environmental indemnity.
2016 Senior Term Loan—In June 2016, the Company entered into a senior term loan of $450.0 million (the "2016 Senior Term Loan"). In August 2016, the Company upsized the facility to $500.0 million. The initial $450.0 million of the 2016 Senior Term Loan was issued at 99.0% of par and the upsize was issued at par. In September 2017, the Company reduced, repriced and extended the 2016 Senior Term Loan to $400.0 million priced at LIBOR plus 3.00% with a 0.75% LIBOR floor and maturing in October 2021. In June 2018, the Company increased the 2016 Senior Term Loan to $650.0 million, reduced the interest rate to LIBOR plus 2.75% and extended its maturity to June 2023. The facility was also modified to permit substitution of collateral, subject to overall collateral pool coverage and concentration limits, over the life of the facility. This modification eliminates the mandatory amortization upon payoff or sale of collateral which existed prior to the upsize and broadens the types of collateral permitted under the facility. The Company may make optional prepayments, subject to prepayment fees, and is required to repay 0.25% of the principal amount each quarter.
During the years ended December 31, 2018 and 2017, repayments of the 2016 Senior Term Loan prior to its modifications and expenses incurred for the modifications resulted in losses on early extinguishment of debt of $2.5 million and $0.8 million, respectively.
2015 Revolving Credit Facility—In March 2015, the Company entered into a revolving credit facility with a maximum capacity of $250.0 million (the "2015 Revolving Credit Facility"). In September 2017, the Company upsized the 2015 Revolving Credit Facility to $325.0 million, added additional lenders to the syndicate, extended the maturity date to September 2020 and made certain other changes. This facility is secured by a pledge of the equity interest in a pool of assets which provide asset value coverage for borrowings under the facility. Borrowings under this credit facility bear interest at a floating rate indexed to one of
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
several base rates plus a margin which adjusts upward or downward based upon the Company's corporate credit rating. An undrawn credit facility commitment fee ranges from 0.30% to 0.50%, based on corporate credit ratings. At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2021. During the year ended December 31, 2018, the Company repaid from cash on hand the $325.0 million outstanding on the 2015 Revolving Credit Facility and as of December 31, 2018, the Company had $325.0 million of borrowing capacity available under the 2015 Revolving Credit Facility.
Unsecured Notes—In September 2017, the Company issued $400.0 million principal amount of 4.625% senior unsecured notes due September 2020, $400.0 million principal amount of 5.25% senior unsecured notes due September 2022 and $250.0 million of 3.125% Convertible Notes due September 2022. The Company incurred approximately $18.6 million dollars in fees related to these offerings, all of which was capitalized in "Debt obligations, net" on the Company's consolidated balance sheets. Proceeds from these offerings, together with cash on hand, were used to repay in full the $550.0 million principal amount outstanding of the 4.0% senior unsecured notes due November 2017, the $300.0 million principal amount outstanding of the 7.125% senior unsecured notes due February 2018 and the $300.0 million principal amount outstanding of the 4.875% senior unsecured notes due July 2018. In addition, the initial purchasers of the 3.125% Convertible Notes exercised their option to purchase an additional $37.5 million aggregate principal amount of the 3.125% Convertible Notes.
During the years ended December 31, 2018, 2017 and 2016, repayments of senior unsecured notes prior to maturity resulted in losses on early extinguishment of debt of $1.2 million, $13.6 million and $0.4 million, respectively. These amounts are included in "Loss on early extinguishment of debt, net" in the Company's consolidated statements of operations.
In November 2016, in connection with the retirement of the Company's $200.0 million principal amount of 3.0% senior unsecured convertible notes due November 2016, the Company converted $9.6 million principal amount into 0.8 million shares of our common stock.
Collateral Assets—The carrying value of the Company's assets that are directly pledged or are held by subsidiaries whose equity is pledged as collateral to secure the Company's obligations under its secured debt facilities are as follows, by asset type ($ in thousands):

| As of December 31,
| 2018 |  | 2017
| Collateral Assets(1) |  | Non-Collateral Assets |  | Collateral Assets(1) |  | Non-Collateral Assets
Real estate, net | $ | 1,620,008 |  |  | $ | 151,011 |  |  | $ | 795,321 |  |  | $ | 486,710 |
Real estate available and held for sale | 1,055 |  |  | 21,496 |  |  | 20,069 |  |  | 48,519 |
Land and development, net | 12,300 |  |  | 585,918 |  |  | 25,100 |  |  | 835,211 |
Loans receivable and other lending investments, net(2)(3) | 498,524 |  |  | 480,154 |  |  | 194,529 |  |  | 1,021,340 |
Other investments | — |  |  | 304,275 |  |  | — |  |  | 321,241 |
Cash and other assets | — |  |  | 1,329,990 |  |  | — |  |  | 898,252 |
Total | $ | 2,131,887 |  |  | $ | 2,872,844 |  |  | $ | 1,035,019 |  |  | $ | 3,611,273 |

_______________________________________________________________________________

(1) | The 2016 Senior Term Loan and the 2015 Revolving Credit Facility are secured only by pledges of equity of certain of the Company's subsidiaries and not by pledges of the assets held by such subsidiaries. Such subsidiaries are subject to contractual restrictions under the terms of such credit facilities, including restrictions on incurring new debt (subject to certain exceptions). As of December 31, 2018, Collateral Assets includes $403.5 million carrying value of assets held by entities whose equity interests are pledged as collateral for the $325.0 million 2015 Revolving Credit Facility that is undrawn as of December 31, 2018.

(2) | As of December 31, 2018 and 2017, the amounts presented exclude general reserves for loan losses of $13.0 million and $17.5 million, respectively.

(3) | As of December 31, 2018 and 2017, the amounts presented exclude loan participations of $22.5 million and $102.3 million, respectively.

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Debt Covenants
The Company's outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness, as such terms are defined in the indentures governing the debt securities, of at least 1.2 x and a covenant not to incur additional indebtedness (except for incurrences of permitted debt), if on a pro forma basis, the Company's consolidated fixed charge coverage ratio, determined in accordance with the indentures governing the Company's debt securities, is 1.5 x or lower. If any of the Company's covenants are breached and not cured within applicable cure periods, the breach could result in acceleration of its debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. If the Company's ability to incur additional indebtedness under the fixed charge coverage ratio is limited, the Company is permitted to incur indebtedness for the purpose of refinancing existing indebtedness and for other permitted purposes under the indentures.
The Company's 2016 Senior Term Loan and the 2015 Revolving Credit Facility contain certain covenants, including covenants relating to collateral coverage, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the 2016 Senior Term Loan requires the Company to maintain collateral coverage of at least 1.25 x outstanding borrowings on the facility. The 2015 Revolving Credit Facility is secured by a borrowing base of assets and requires the Company to maintain both borrowing base asset value of at least 1.5 x outstanding borrowings on the facility and a consolidated ratio of cash flow to fixed charges of at least 1.5 x. The 2015 Revolving Credit Facility does not require that proceeds from the borrowing base be used to pay down outstanding borrowings provided the borrowing base asset value remains at least 1.5 x outstanding borrowings on the facility. To satisfy this covenant, the Company has the option to pay down outstanding borrowings or substitute assets in the borrowing base. The Company may not pay common dividends if it ceases to qualify as a REIT. In June 2018, the Company amended the terms of the 2016 Senior Term Loan and the 2015 Revolving Credit Facility to include the ability to pay common dividends with no restrictions so long as the Company is not in default on any of its debt obligations.
The Company's 2016 Senior Term Loan and the 2015 Revolving Credit Facility contain cross default provisions that would allow the lenders to declare an event of default and accelerate the Company's indebtedness to them if the Company fails to pay amounts due in respect of its other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing the Company's unsecured public debt securities permit the bondholders to declare an event of default and accelerate the Company's indebtedness to them if the Company's other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated.
Note 11—Commitments and Contingencies
Unfunded Commitments—The Company generally funds construction and development loans and build-outs of space in real estate assets over a period of time if and when the borrowers and tenants meet established milestones and other performance criteria. The Company refers to these arrangements as Performance-Based Commitments. In addition, the Company has committed to invest capital in several real estate funds and other ventures. These arrangements are referred to as Strategic Investments.
As of December 31, 2018, the maximum amount of fundings the Company may be obligated to make under each category, assuming all performance hurdles and milestones are met under the Performance-Based Commitments and assuming 100% of its capital committed to Strategic Investments is drawn down, are as follows ($ in thousands):

| Loans and Other Lending Investments(1) |  | Real Estate |  | Other Investments |  | Total
Performance-Based Commitments | $ | 436,910 |  |  | $ | 12,610 |  |  | $ | — |  |  | $ | 449,520 |
Strategic Investments | — |  |  | — |  |  | 39,754 |  |  | 39,754 |
Total | $ | 436,910 |  |  | $ | 12,610 |  |  | $ | 39,754 |  |  | $ | 489,274 |

_______________________________________________________________________________

(1) | Excludes $27.4 million of commitments on loan participations sold that are not the obligation of the Company.

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Notes to Consolidated Financial Statements (Continued)
Other Commitments—Total operating lease expense for the years ended December 31, 2018, 2017 and 2016 was $5.0 million, $5.2 million and $5.9 million, respectively. Future minimum lease obligations under non-cancelable operating leases are as follows ($ in thousands):

2019 | $ | 4,340 |
2020 | 4,016 |
2021 | 1,589 |
2022 | 991 |
2023 | 849 |
Thereafter | 2,469 |

Legal Proceedings—The Company and/or one or more of its subsidiaries is party to various pending litigation matters that are considered ordinary routine litigation incidental to the Company's business as a finance and investment company focused on the commercial real estate industry, including foreclosure-related proceedings. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.
Note 12—Risk Management and Derivatives
Risk management
In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different points in time and potentially at different bases, than its interest-earning assets. Credit risk is the risk of default on the Company's lending investments or leases that result from a borrower's or tenant's inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of loans and other lending investments due to changes in interest rates or other market factors, including the rate of prepayments of principal and the value of the collateral underlying loans, the valuation of real estate assets by the Company as well as changes in foreign currency exchange rates.
Risk concentrations—Concentrations of credit risks arise when a number of borrowers or tenants related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions.
Substantially all of the Company's real estate as well as assets collateralizing its loans receivable are located in the United States. As of December 31, 2018, the only states with a concentration greater than 10.0% were New York with 16.5% and California with 11.0%. As of December 31, 2018, the Company's portfolio contains concentrations in the following asset types: office/industrial 32.7%, land 18.4%, entertainment/leisure 17.4%, hotel 7.1% and mixed use/mixed collateral 7.0%.
The Company underwrites the credit of prospective borrowers and tenants and often requires them to provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company's loans and real estate assets are geographically diverse and the borrowers and tenants operate in a variety of industries, to the extent the Company has a significant concentration of interest or operating lease revenues from any single borrower or tenant, the inability of that borrower or tenant to make its payment could have a material adverse effect on the Company. As of December 31, 2018, the Company's five largest borrowers or tenants collectively accounted for approximately 14.4% of the Company's 2018 revenues, of which no single customer accounts for more than 6.7%.
Derivatives
The Company's use of derivative financial instruments has historically been limited to the utilization of interest rate swaps, interest rate caps and foreign exchange contracts. The principal objective of such financial instruments is to minimize the risks and/or costs associated with the Company's operating and financial structure and to manage its exposure to interest rates and foreign exchange rates. The Company may have derivatives that are not designated as hedges because they do not meet the strict hedge accounting requirements. Although not designated as hedges, such derivatives are entered into to manage the Company's exposure to interest rate movements, foreign exchange rate movements and other identified risks.
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Notes to Consolidated Financial Statements (Continued)
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2018 ($ in thousands):

| Derivative Assets |  | Derivative Liabilities
| Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Derivatives Designated in Hedging Relationships |  |  |  |
Interest rate swaps | Other assets |  | $ | 3,669 |  |  | Other liabilities |  | $ | 10,244 |
Total |  |  | $ | 3,669 |  |  |  |  | $ | 10,244 |

____________________________________________________________________________

(1) | Over the next 12 months, the Company expects that $1.0 million related to cash flow hedges will be reclassified from "Accumulated other comprehensive income (loss)" as an increase to interest expense.

The tables below present the effect of the Company's derivative financial instruments, including the Company's share of derivative financial instruments at certain of its equity method investments, in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) ($ in thousands):

Derivatives Designated in Hedging Relationships |  | Location of Gain (Loss) Recognized in Income |  | Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
For the Year Ended December 31, 2018 |  |  |  |
Interest rate swaps |  | Interest expense |  | $ | (12,963 | ) |  | $ | (388 | )
Interest rate swaps |  | Earnings from equity method investments |  | (1,736 | ) |  | 20 |
For the Year Ended December 31, 2017 |  |  |  |
Interest rate cap |  | Earnings from equity method investments |  | (16 | ) |  | (16 | )
Interest rate swaps |  | Interest expense |  | 495 |  |  | 339 |
Interest rate swap |  | Earnings from equity method investments |  | 368 |  |  | (285 | )
Foreign exchange contracts |  | Earnings from equity method investments |  | (352 | ) |  | — |
For the Year Ended December 31, 2016 |  |  |  |
Interest rate cap |  | Interest expense |  | — |  |  | (185 | )
Interest rate cap |  | Earnings from equity method investments |  | (4 | ) |  | (3 | )
Interest rate swaps |  | Interest expense |  | (175 | ) |  | (32 | )
Interest rate swaps |  | Earnings from equity method investments |  | 94 |  |  | (378 | )
Foreign exchange contracts |  | Earnings from equity method investments |  | (167 | ) |  | — |

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Notes to Consolidated Financial Statements (Continued)

|  |  |  | Amount of Gain or (Loss) Recognized in Income
|  | Location of Gain or (Loss) Recognized in Income |  | For the Years Ended December 31,
Derivatives not Designated in Hedging Relationships(1) |  |  | 2017 |  | 2016
Interest rate cap |  | Other expense |  | $ | 6 |  |  | $ | (1,080 | )
Foreign exchange contracts |  | Other expense |  | (970 | ) |  | 1,115 |

____________________________________________________________________________

(1) | The Company did not have any derivatives not designated in hedging relationships during the year ended December 31, 2018.

Foreign Exchange Contracts—The Company is exposed to fluctuations in foreign exchange rates on investments it holds in foreign entities. The Company used foreign exchange contracts to hedge its exposure to changes in foreign exchange rates on its foreign investments. Foreign exchange contracts involve fixing the U.S. dollar ("USD") to the respective foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date. The foreign exchange contracts are typically cash settled in USD for their fair value at or close to their settlement date.
For derivatives designated as net investment hedges, the changes in the fair value of the derivatives are reported in Accumulated Other Comprehensive Income as part of the cumulative translation adjustment. Amounts are reclassified out of Accumulated Other Comprehensive Income into earnings when the hedged foreign entity is either sold or substantially liquidated. For derivatives not designated as net investment hedges, the changes in the fair value of the derivatives are reported in the Company's consolidated statements of operations within "Other Expense."
The Company marks its foreign investments each quarter based on current exchange rates and records the gain or loss through "Other expense" in its consolidated statements of operations. The Company recorded net gains (losses) related to foreign investments of $0.2 million and $0.1 million during the years ended December 31, 2017 and 2016, respectively, in its consolidated statements of operations. The Company did not have any outstanding derivatives designated as net investments during the year end December 31, 2018.
Interest Rate Hedges—For derivatives designated and qualifying as cash flow hedges, the changes in the fair value of the derivatives are reported in Accumulated Other Comprehensive Income (Loss). For derivatives not designated as cash flow hedges, the changes in the fair value of the derivatives are reported in the Company's consolidated statements of operations within "Other Expense."
During the year ended December 31, 2017, the Company entered into and settled a rate lock swap in connection with the 2017 Secured Financing and a simultaneous rate lock swap with SAFE. As a result of the settlements, the Company initially recorded a $0.4 million unrealized gain in “Accumulated other comprehensive income” on the Company’s consolidated balance sheets and subsequently derecognized the gain when third parties acquired a controlling interest in the Company's Ground Lease business (refer to Note 4).
Credit Risk-Related Contingent Features—The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
The Company reports derivative instruments on a gross basis in its consolidated financial statements. In connection with its derivatives which were in a liability position as of December 31, 2018, the Company posted collateral of $6.4 million and is included in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets. The Company's net exposure under these contracts was zero as of December 31, 2018.
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Notes to Consolidated Financial Statements (Continued)
Note 13—Equity
Preferred Stock—On October 20, 2017, the Company redeemed all of its issued and outstanding Series E and Series F preferred stock. Each holder of Series E and Series F preferred stock received cash in the amount of the liquidation preference of $25.00 per share, or $240.0 million in the aggregate. The total carrying value of the Series E and Series F preferred stock was $223.7 million, net of discounts and fees, and was recorded in "Additional paid-in-capital" and "Preferred Stock Series D, E, F, G and I, liquidation preference $25.00 per share" on the Company's consolidated balance sheet as of December 31, 2016. The remaining liquidation premium of $16.3 million represents a return similar to a dividend to the holders of the Series E and Series F preferred stock and, as such, has been recorded as an adjustment to "Retained earnings (deficit)" on the Company's consolidated balance sheet.
The Company had the following series of Cumulative Redeemable and Convertible Perpetual Preferred Stock outstanding as of December 31, 2018 and 2017:

|  |  |  |  |  | Cumulative Preferential Cash Dividends(1)(2) |  |
Series |  | Shares Issued and Outstanding (in thousands) |  | Par Value |  | Liquidation Preference(3)(4) |  | Rate per Annum |  | Equivalent to Fixed Annual Rate (per share) |  | Carrying Value (in thousands)
D |  | 4,000 |  |  | $ | 0.001 |  |  | $ | 25.00 |  |  | 8.00 | % |  | $ | 2.00 |  |  | $ | 89,041 |
G |  | 3,200 |  |  | 0.001 |  |  | 25.00 |  |  | 7.65 | % |  | 1.91 |  |  | 72,664 |
I |  | 5,000 |  |  | 0.001 |  |  | 25.00 |  |  | 7.50 | % |  | 1.88 |  |  | 120,785 |
J (convertible)(4) |  | 4,000 |  |  | 0.001 |  |  | 50.00 |  |  | 4.50 | % |  | 2.25 |  |  | 193,510 |
Total |  | 16,200 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 476,000 |

_______________________________________________________________________________

(1) | Holders of shares of the Series D, G, I and J preferred stock are entitled to receive dividends, when and as declared by the Company's Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Company's Board of Directors for the payment of dividends that is not more than 30 nor less than 10 days prior to the dividend payment date.

(2) | The Company declared and paid dividends of $8.0 million, $6.1 million and $9.4 million on its Series D, G and I Cumulative Redeemable Preferred Stock during the year ended December 31, 2018. The Company declared and paid dividends of $8.0 million, $8.3 million, $5.9 million, $6.1 million and $9.4 million on its Series D, E, F, G and I Cumulative Redeemable Preferred Stock during the year ended December 31, 2017. In addition, in October 2017, the Company redeemed its Series E and Series F Preferred Stock and paid dividends through the redemption date of $1.1 million and $0.8 million, respectively, on its Series E and Series F Preferred Stock and paid a liquidation premium of $16.3 million representing a return similar to a dividend to the holders of the Series E and Series F Preferred Stock. The Company declared and paid dividends of $9.0 million on its Series J Convertible Perpetual Preferred Stock during the years ended December 31, 2018 and 2017. The character of the 2018 dividends was 100% capital gain distribution, of which 26.02% represented unrecaptured section 1250 gain and 73.98% long term capital gain. The character of the 2017 dividends was 100% capital gain distribution, of which 27.90% represented unrecaptured section 1250 gain and 72.10% long term capital gain. There are no dividend arrearages on any of the preferred shares currently outstanding.

(3) | The Company may, at its option, redeem the Series G and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date.

(4) | Each share of the Series J Preferred Stock is convertible at the holder's option at any time, into 3.9762 shares of the Company's common stock (equal to a conversion price of approximately $12.57 per share), subject to specified adjustments. The Company may, at its option, redeem the Series J Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $50.00 per share, plus accrued and unpaid dividends, if any, to the redemption date.

Dividends—To maintain its qualification as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the REIT. The Company has recorded NOLs and may record NOLs in the future, which may reduce its taxable income in future periods and lower or eliminate entirely the Company's obligation to pay dividends for such periods in order to maintain its REIT qualification. As of December 31, 2017, the Company had $582.4 million of NOL carryforwards at the corporate REIT level that can generally be used to offset both ordinary taxable income and capital gain net income in future years. The NOL carryforwards will expire beginning in 2031 and through 2036 if unused. The amount of NOL carryforwards as of December 31, 2018 will be determined upon finalization of the Company's 2018 tax return. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and certain asset impairments), in certain circumstances, the Company may generate operating cash flow in excess of its dividends,
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
or alternatively, may need to make dividend payments in excess of operating cash flows. The 2016 Senior Term Loan and the 2015 Revolving Credit Facility permit the Company to distribute 100% of its REIT taxable income on an annual basis (prior to deducting certain cumulative NOL carryforwards), as long as the Company maintains its REIT qualification. The 2016 Senior Term Loan and the 2015 Revolving Credit Facility restrict the Company from paying any common dividends if it ceases to qualify as a REIT. The Company declared and paid common stock dividends of $12.3 million, or $0.18 per share, for the year ended December 31, 2018. The character of the 2018 dividends was 100% capital gain distribution, of which 26.02% represented unrecaptured section 1250 gain and 73.98% long term capital gain. The Company did not declare or pay any common stock dividends for the year ended December 31, 2017.
Stock Repurchase Program—The Company may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans. During the three months ended March 31, 2018, the Company repurchased 0.8 million shares of its outstanding common stock for $8.3 million, representing an average cost of $10.22 per share. No common stock was repurchased during the nine months ended December 31, 2018. The Company did not repurchase shares of its common stock during the year ended December 31, 2017 under stock repurchase programs. During the year ended December 31, 2016, the Company repurchased 10.2 million shares of its outstanding common stock for $98.4 million, representing an average cost of $9.67 per share. As of December 31, 2018, the Company had authorization to repurchase up to $41.7 million of common stock.
In addition, in connection with the sale of the 3.125% Convertible Notes in September 2017 (refer to Note 10), the Company repurchased 4.0 million shares of its common stock for $45.9 million, representing an average cost of $11.51 per share, in privately negotiated transactions with purchasers of the 3.125% Convertible Notes.
Accumulated Other Comprehensive Income (Loss)—"Accumulated other comprehensive income (loss)" reflected in the Company's shareholders' equity is comprised of the following ($ in thousands):

| As of December 31,
| 2018 |  | 2017
Unrealized gains on available-for-sale securities | $ | 475 |  |  | $ | 1,335 |
Unrealized gains (losses) on cash flow hedges | (13,546 | ) |  | 707 |
Unrealized losses on cumulative translation adjustment | (4,199 | ) |  | (4,524 | )
Accumulated other comprehensive loss | $ | (17,270 | ) |  | $ | (2,482 | )

Note 14—Stock-Based Compensation Plans and Employee Benefits
Stock-Based Compensation—The Company recorded stock-based compensation expense, including the expense related to performance incentive plans (see below), of $17.6 million, $18.8 million and $10.9 million, respectively, for the years ended December 31, 2018, 2017 and 2016 in "General and administrative" in the Company's consolidated statements of operations. As of December 31, 2018, there was $2.0 million of total unrecognized compensation cost related to all unvested restricted stock units that is expected to be recognized over a weighted average remaining vesting/service period of 1.98 years.
Performance Incentive Plans—The Company's Performance Incentive Plan ("iPIP") is designed to provide, primarily to senior executives and select professionals engaged in the Company's investment activities, long-term compensation which has a direct relationship to the realized returns on investments included in the plan. The fair value of points is determined using a model that forecasts the Company's projected investment performance. iPIP is a liability-classified award, which will be remeasured each reporting period at fair value until the awards are settled. The following is a summary of the status of the Company’s iPIP points and changes during the year ended December 31, 2018.

| Year Ended December 31, 2018
| iPIP Investment Pool
| 2013-2014 |  | 2015-2016 |  | 2017-2018
Points at beginning of period | 86.57 |  |  | 84.16 |  |  | 40.97 |
Granted | 0.50 |  |  | — |  |  | 49.33 |
Forfeited | (1.30 | ) |  | (4.75 | ) |  | (7.87 | )
Points at end of period | 85.77 |  |  | 79.41 |  |  | 82.43 |

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
In 2018, the Company made initial distributions to participants in the 2013-2014 investment pool following a determination that, as of December 31, 2017, the Company had realized a return of all invested capital in the assets included in the 2013-2014 investment pool, together with a return based on leverage and a preferred return hurdle of 9.0%. The amount distributable to participants was reduced by 4.3% based on the Company's total shareholder return in accordance with the provisions of the iPIP and, as a result, iPIP participants received total distributions in the amount of $15.6 million as compensation, comprised of $7.8 million in cash and 685,624 shares of the Company's common stock, with a fair value of $7.8 million or $11.37 per share, which are fully-vested and issued under the 2009 LTIP (see below). After deducting statutory minimum tax withholdings, a total of 374,055 shares of the Company's common stock were issued. As of December 31, 2018 and 2017, the Company had accrued compensation costs relating to iPIP of $37.5 million and $38.1 million, respectively, which are included in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets.
Long-Term Incentive Plan—The Company's shareholders approved the Company's 2009 Long-Term Incentive Plan (the "2009 LTIP") which is designed to provide incentive compensation for officers, key employees, directors and advisors of the Company. Shareholders approved amendments to the 2009 LTIP and the performance-based provisions of the 2009 LTIP in 2014. The 2009 LTIP provides for awards of stock options, shares of restricted stock, phantom shares, restricted stock units, dividend equivalent rights and other share-based performance awards. A maximum of 8.0 million shares of common stock may be awarded under the 2009 LTIP. All awards under the 2009 LTIP are made at the discretion of the Company's Board of Directors or a committee of the Board of Directors.
As of December 31, 2018, an aggregate of 2.6 million shares remain available for issuance pursuant to future awards under the Company's 2009 LTIP.
Restricted Share Issuances—During the year ended December 31, 2018, the Company granted 213,609 shares of common stock to certain employees under the 2009 LTIP as part of annual incentive awards that included a mix of cash and equity awards. The weighted average grant date fair value per share of these share awards was $10.10 and the total fair value was $2.2 million. The shares are fully-vested and 135,503 shares were issued net of statutory minimum required tax withholdings. The employees are restricted from selling these shares for up to 18 months from the date of grant.
Restricted Stock Units—Changes in non-vested restricted stock units ("Units") during the year ended December 31, 2018 were as follows (number of shares and $ in thousands, except per share amounts):

|  | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share |  | Aggregate Intrinsic Value
Non-vested as of December 31, 2017 |  | 282 |  |  | $ | 10.98 |  |  | $ | 3,183 |
Granted |  | 278 |  |  | $ | 10.16 |  |  |
Vested |  | (142 | ) |  | $ | 10.37 |  |  |
Forfeited |  | (61 | ) |  | $ | 10.36 |  |  |
Non-vested as of December 31, 2018 |  | 357 |  |  | $ | 10.68 |  |  | $ | 3,277 |

The total fair value of Units vested during the years ended December 31, 2018, 2017 and 2016 was $1.4 million, $0.9 million and $2.9 million, respectively. The weighted-average grant date fair value per share of Units granted during the years ended December 31, 2018, 2017 and 2016 was $10.16, $12.09 and $10.11, respectively.
Directors' Awards—Non-employee directors are awarded CSEs or restricted share awards at the time of the annual shareholders' meeting in consideration for their services on the Company's Board of Directors. During the year ended December 31, 2018, the Company awarded to non-employee Directors 67,631 restricted shares of common stock at a fair value per share of $10.65 at the time of grant. These restricted shares have a vesting term of one year. The Company also issued a total of 2,805 CSEs at a fair value of $10.91 in respect of dividend equivalents on outstanding CSEs during the year ended December 31, 2018. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the CSEs and restricted shares of common stock vest and are settled. As of December 31, 2018, a combined total of 239,801 CSEs and restricted shares of common stock granted to members of the Company's Board of Directors remained outstanding under the Company's Non-Employee Directors Deferral Plan, with an aggregate intrinsic value of $2.2 million.
401(k) Plan—The Company has a savings and retirement plan (the "401(k) Plan"), which is a voluntary, defined contribution plan. All employees are eligible to participate in the 401(k) Plan following completion of three months of continuous service with the Company. Each participant may contribute on a pretax basis up to the maximum percentage of compensation and dollar amount
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
permissible under Section 402(g) of the Internal Revenue Code not to exceed the limits of Code Sections 401(k), 404 and 415. At the discretion of the Company's Board of Directors, the Company may make matching contributions on the participant's behalf of up to 50% of the participant's contributions, up to a maximum of 10% of the participants' compensation. The Company made gross contributions of $1.1 million, $1.1 million and $1.0 million, respectively, for the years ended December 31, 2018, 2017 and 2016.
Note 15—Earnings Per Share
Earnings per share ("EPS") is calculated using the two-class method, which allocates earnings among common stock and participating securities to calculate EPS when an entity's capital structure includes either two or more classes of common stock or common stock and participating securities.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
The following table presents a reconciliation of income (loss) from continuing operations used in the basic and diluted EPS calculations ($ in thousands, except for per share data):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Income (loss) from continuing operations | $ | (18,326 | ) |  | $ | 51,851 |  |  | $ | 81,912 |
Net income attributable to noncontrolling interests | (13,936 | ) |  | (4,526 | ) |  | (4,876 | )
Preferred dividends | (32,495 | ) |  | (48,444 | ) |  | (51,320 | )
Premium above book value on redemption of preferred stock | — |  |  | (16,314 | ) |  | — |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for basic earnings per common share(1) | $ | (64,757 | ) |  | $ | (17,433 | ) |  | $ | 25,716 |
Add: Effect of joint venture shares | — |  |  | — |  |  | 7 |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for diluted earnings per common share(1) | $ | (64,757 | ) |  | $ | (17,433 | ) |  | $ | 25,723 |

_______________________________________________________________________________

(1) | For the year ended December 31, 2016, includes income from continuing operations allocable to Participating Security Holders of $8 and $8 on a basic and dilutive basis, respectively.

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Earnings allocable to common shares: |  |  |  |  |
Numerator for basic earnings per share: |  |  |  |  |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders | $ | (64,757 | ) |  | $ | (17,433 | ) |  | $ | 25,708 |
Income from discontinued operations | — |  |  | 4,939 |  |  | 18,264 |
Gain from discontinued operations | — |  |  | 123,418 |  |  | — |
Net income (loss) attributable to iStar Inc. and allocable to common shareholders | $ | (64,757 | ) |  | $ | 110,924 |  |  | $ | 43,972 |
Numerator for diluted earnings per share: |  |  |  |  |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders | $ | (64,757 | ) |  | $ | (17,433 | ) |  | $ | 25,715 |
Income from discontinued operations | — |  |  | 4,939 |  |  | 18,264 |
Gain from discontinued operations | — |  |  | 123,418 |  |  | — |
Net income (loss) attributable to iStar Inc. and allocable to common shareholders | $ | (64,757 | ) |  | $ | 110,924 |  |  | $ | 43,979 |
Denominator for basic and diluted earnings per share: |  |  |  |  |
Weighted average common shares outstanding for basic earnings per common share | 67,958 |  |  | 71,021 |  |  | 73,453 |
Add: Effect of assumed shares issued under treasury stock method or restricted stock units | — |  |  | — |  |  | 84 |
Add: Effect of joint venture shares | — |  |  | — |  |  | 298 |
Weighted average common shares outstanding for diluted earnings per common share | 67,958 |  |  | 71,021 |  |  | 73,835 |
Basic earnings per common share: |  |  |  |  |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |
Income from discontinued operations | — |  |  | 0.07 |  |  | 0.25 |
Gain from discontinued operations | — |  |  | 1.74 |  |  | — |
Net income (loss) attributable to iStar Inc. and allocable to common shareholders | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |
Diluted earnings per common share: |  |  |  |  |
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders | $ | (0.95 | ) |  | $ | (0.25 | ) |  | $ | 0.35 |
Income from discontinued operations | — |  |  | 0.07 |  |  | 0.25 |
Gain from discontinued operations | — |  |  | 1.74 |  |  | — |
Net income (loss) attributable to iStar Inc. and allocable to common shareholders | $ | (0.95 | ) |  | $ | 1.56 |  |  | $ | 0.60 |

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Notes to Consolidated Financial Statements (Continued)
For the years ended December 31, 2018, 2017 and 2016, the following shares were not included in the diluted EPS calculation because they were anti-dilutive (in thousands)(1)(2)(3)(4):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Joint venture shares | — |  |  | 255 |  |  | — |
3.00% convertible senior unsecured notes | — |  |  | — |  |  | 14,764 |
Series J convertible perpetual preferred stock | 15,704 |  |  | 15,635 |  |  | 15,635 |
1.50% convertible senior unsecured notes | — |  |  | — |  |  | 9,868 |

_______________________________________________________________________________

(1) | For the year ended December 31, 2016, the effect of 16 and 125 unvested time and market-based Units, respectively, were anti-dilutive.

(2) | For the year ended December 31, 2017, the effect of 6 and 17 unvested time and market-based Units, respectively, were anti-dilutive.

(3) | F or the year ended December 31, 2018, the effect of the Company's unvested Units, CSEs and restricted stock awards were anti-dilutive due to the Company having a net loss for the period.

(4) | The Company will settle conversions of the 3.125% Convertible Notes by paying the conversion value in cash up to the original principal amount of the notes being converted and shares of common stock to the extent of any conversion premium. The amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value calculated for each trading day in a 40 consecutive day observation period. Based upon the conversion price of the 3.125% Convertible Notes, no shares of common stock would have been issuable upon conversion of the 3.125% Convertible Notes for the year ended December 31, 2017 and therefore the 3.125% Convertible Notes had no effect on diluted EPS for such periods.

Note 16—Fair Values
Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
Certain of the Company's assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
The following fair value hierarchy table summarizes the Company's assets and liabilities recorded at fair value on a recurring and non-recurring basis by the above categories ($ in thousands):

|  |  | Fair Value Using
| Total |  | Quoted market prices in active markets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
As of December 31, 2018 |  |  |  |  |  |  |
Recurring basis: |  |  |  |  |  |  |
Derivative assets(1) | $ | 3,669 |  |  | $ | — |  |  | $ | 3,669 |  |  | $ | — |
Derivative liabilities(1) | 10,244 |  |  | — |  |  | 10,244 |  |  | — |
Available-for-sale securities(1) | 21,661 |  |  | — |  |  | — |  |  | 21,661 |
Non-recurring basis: |  |  |  |  |  |  |
Impaired real estate(2) | 29,400 |  |  | — |  |  | — |  |  | 29,400 |
Impaired real estate available and held for sale(3) | 19,300 |  |  | — |  |  | — |  |  | 19,300 |
Impaired land and development(4) | 78,400 |  |  | — |  |  | — |  |  | 78,400 |
As of December 31, 2017 |  |  |  |  |  |  |
Recurring basis: |  |  |  |  |  |  |
Available-for-sale securities(1) | $ | 22,842 |  |  | $ | — |  |  | $ | — |  |  | $ | 22,842 |
Non-recurring basis: |  |  |  |  |  |  |
Impaired real estate(5) | 12,400 |  |  | — |  |  | — |  |  | 12,400 |
Impaired real estate available and held for sale(6) | 800 |  |  | — |  |  | — |  |  | 800 |
Impaired land and development(7) | 21,400 |  |  | — |  |  | — |  |  | 21,400 |

_______________________________________________________________________________

(1) | The fair value of the Company's derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. The fair value of the Company's available-for-sale securities are based upon unadjusted third-party broker quotes and are classified as Level 3.

(2) | The Company recorded aggregate impairments of $76.3 million on three real estate assets with an estimated aggregate fair value of $29.4 million. The impairments were as follows:

i. | A $23.2 million impairment on a commercial operating property based on a decline in expected operating performance. The fair value is based on the Company's estimate of the recoverability of its investment in the project.

ii. | A $6.0 million impairment on a property based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iii. | A $47.1 million impairment on a commercial operating property based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

(3) | The Company recorded aggregate impairments of $3.7 million on two real estate assets held for sale. The fair values are based on market comparable sales.

(4) | The Company recorded aggregate impairments of $55.4 million on four land and development assets with an estimated aggregate fair value of $78.4 million. The impairments were as follows:

i. | A $25.0 million impairment on a waterfront land and development asset based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

ii. | A $21.6 million impairment on a master planned community based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iii. | A $6.9 million impairment on an infill land and development asset based on the deterioration of the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iv. | A $1.9 million impairment on a waterfront land and development asset based on the sale of the asset in 2019.

(5) | The Company recorded an impairment on a real estate asset with a fair value of $12.4 million based on market comparable sales.

(6) | The Company recorded an impairment on a residential real estate asset available and held for sale based on market comparable sales.

(7) | The Company recorded an impairment on a land and development asset with a fair value of $21.4 million based on a discount rate of 6% and a 10 year holding period.

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company's consolidated balance sheets for the years ended December 31, 2018 and 2017 ($ in thousands):

|  | 2018 |  | 2017
Beginning balance |  | $ | 22,842 |  |  | $ | 21,666 |
Repayments |  | (46 | ) |  | (10 | )
Unrealized gains recorded in other comprehensive income |  | (1,135 | ) |  | 1,186 |
Ending balance |  | $ | 21,661 |  |  | $ | 22,842 |

Fair values of financial instruments—The Company's estimated fair values of its loans receivable and other lending investments and outstanding debt was $1.0 billion and $3.5 billion, respectively, as of December 31, 2018 and $1.3 billion and $3.7 billion, respectively, as of December 31, 2017. The Company determined that the significant inputs used to value its loans receivable and other lending investments and debt obligations fall within Level 3 of the fair value hierarchy. The carrying value of other financial instruments including cash and cash equivalents, restricted cash, accrued interest receivable and accounts payable, approximate the fair values of the instruments. Cash and cash equivalents and restricted cash values are considered Level 1 on the fair value hierarchy. The fair value of other financial instruments, including derivative assets and liabilities, are included in the fair value hierarchy table above.
Given the nature of certain assets and liabilities, clearly determinable market based valuation inputs are often not available, therefore, these assets and liabilities are valued using internal valuation techniques. Subjectivity exists with respect to these internal valuation techniques, therefore, the fair values disclosed may not ultimately be realized by the Company if the assets were sold or the liabilities were settled with third parties. The methods the Company used to estimate the fair values presented in the table above are described more fully below for each type of asset and liability.
Derivatives—The Company uses interest rate swaps, interest rate caps and foreign exchange contracts to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparty's non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. The Company has determined that the significant inputs used to value its derivatives fall within Level 2 of the fair value hierarchy.
Impaired loans—The Company's loans identified as being impaired are nearly all collateral dependent loans and are evaluated for impairment by comparing the estimated fair value of the underlying collateral, less costs to sell, to the carrying value of each loan. Due to the nature of the individual properties collateralizing the Company's loans, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the collateral. This approach requires the Company to make judgments in respect to significant unobservable inputs, which may include discount rates, capitalization rates and the timing and amounts of estimated future cash flows. For income producing properties, cash flows generally include property revenues, operating costs and capital expenditures that are based on current observable market rates and estimates for market rate growth and occupancy levels. For other real estate, cash flows may include lot and unit sales that are based on current observable market rates and estimates for annual revenue growth, operating costs, costs of completion and the inventory sell out pricing and timing. The Company will also consider market comparables if available. In some cases, the Company obtains external "as is" appraisals for loan collateral, generally when third party participations exist, and appraised values may be discounted when real estate markets rapidly deteriorate. The Company has determined that significant inputs used in its internal valuation models and appraisals fall within Level 3 of the fair value hierarchy.
Impaired real estate—If the Company determines a real estate asset available and held for sale is impaired, it records an impairment charge to adjust the asset to its estimated fair market value less costs to sell. Due to the nature of individual real estate properties, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the assets. This approach requires the Company to make judgments with respect to significant unobservable inputs, which may include discount rates, capitalization rates and the timing and amounts of estimated future cash flows. For income producing properties, cash flows generally include property revenues, operating costs and capital expenditures that are based on current observable market rates and estimates for market rate growth and occupancy levels. For other real estate, cash
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Notes to Consolidated Financial Statements (Continued)
flows may include lot and unit sales that are based on current observable market rates and estimates for annual market rate growth, operating costs, costs of completion and the inventory sell out pricing and timing. The Company will also consider market comparables if available. In some cases, the Company obtains external "as is" appraisals for real estate assets and appraised values may be discounted when real estate markets rapidly deteriorate. The Company has determined that significant inputs used in its internal valuation models and appraisals fall within Level 3 of the fair value hierarchy. Additionally, in certain cases, if the Company is under contract to sell an asset, it will mark the asset to the contracted sales price less costs to sell. The Company considers this to be a Level 3 input under the fair value hierarchy.
Loans receivable and other lending investments—The Company estimates the fair value of its performing loans and other lending investments using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. The Company determined that the significant inputs used to value its loans and other lending investments fall within Level 3 of the fair value hierarchy. For certain lending investments, the Company uses market quotes, to the extent they are available, that fall within Level 2 of the fair value hierarchy or broker quotes that fall within Level 3 of the fair value hierarchy.
Debt obligations, net—For debt obligations traded in secondary markets, the Company uses market quotes, to the extent they are available, to determine fair value and are considered Level 2 on the fair value hierarchy. For debt obligations not traded in secondary markets, the Company determines fair value using a discounted cash flow methodology, whereby contractual cash flows are discounted at rates that management determines best reflect current market interest rates that would be charged for debt with similar characteristics and credit quality. The Company has determined that the inputs used to value its debt obligations under the discounted cash flow methodology fall within Level 3 of the fair value hierarchy.
Note 17—Segment Reporting
The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Finance, Net Lease, Operating Properties and Land and Development. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans and real estate related securities. The Net Lease segment includes the Company's activities and operations related to the ownership of properties generally leased to single corporate tenants. The Operating Properties segment includes the Company's activities and operations related to its commercial and residential properties. The Land and Development segment includes the Company's activities related to its developable land portfolio.
The Company evaluates performance based on the following financial measures for each segment. The Company's segment information is as follows ($ in thousands):

| Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land and Development |  | Corporate/Other(1) |  | Company Total
Year Ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Operating lease income | $ | — |  |  | $ | 151,958 |  |  | $ | 55,677 |  |  | $ | 557 |  |  | $ | — |  |  | $ | 208,192 |
Interest income | 97,878 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 97,878 |
Other income | 4,556 |  |  | 4,286 |  |  | 54,361 |  |  | 7,320 |  |  | 11,819 |  |  | 82,342 |
Land development revenue | — |  |  | — |  |  | — |  |  | 409,710 |  |  | — |  |  | 409,710 |
Earnings (loss) from equity method investments | — |  |  | 8,479 |  |  | (1,003 | ) |  | (3,110 | ) |  | (9,373 | ) |  | (5,007 | )
Gain from consolidation of equity method investment | — |  |  | 67,877 |  |  | — |  |  | — |  |  | — |  |  | 67,877 |
Income from sales of real estate | — |  |  | 45,038 |  |  | 80,966 |  |  | — |  |  | — |  |  | 126,004 |
Total revenue and other earnings | 102,434 |  |  | 277,638 |  |  | 190,001 |  |  | 414,477 |  |  | 2,446 |  |  | 986,996 |
Real estate expense | — |  |  | (17,033 | ) |  | (80,570 | ) |  | (41,686 | ) |  | — |  |  | (139,289 | )
Land development cost of sales | — |  |  | — |  |  | — |  |  | (350,181 | ) |  | — |  |  | (350,181 | )
Other expense | (1,578 | ) |  | — |  |  | — |  |  | — |  |  | (4,462 | ) |  | (6,040 | )
Allocated interest expense | (40,653 | ) |  | (63,706 | ) |  | (18,618 | ) |  | (21,897 | ) |  | (38,877 | ) |  | (183,751 | )
Allocated general and administrative(2) | (12,997 | ) |  | (20,713 | ) |  | (6,574 | ) |  | (14,313 | ) |  | (19,975 | ) |  | (74,572 | )
Segment profit (loss) (3) | $ | 47,206 |  |  | $ | 176,186 |  |  | $ | 84,239 |  |  | $ | (13,600 | ) |  | $ | (60,868 | ) |  | $ | 233,163 |

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Notes to Consolidated Financial Statements (Continued)

| Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land and Development |  | Corporate/Other(1) |  | Company Total
Other significant non-cash items: |  |  |  |  |  |  |  |  |  |  |
Provision for loan losses | $ | 16,937 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,937 |
Impairment of assets | — |  |  | 10,391 |  |  | 79,991 |  |  | 56,726 |  |  | — |  |  | 147,108 |
Depreciation and amortization | — |  |  | 38,588 |  |  | 17,417 |  |  | 1,353 |  |  | 1,341 |  |  | 58,699 |
Capitalized expenditures | — |  |  | 40,215 |  |  | 19,912 |  |  | 144,595 |  |  | — |  |  | 204,722 |
Year Ended December 31, 2017 |  |  |  |  |  |  |  |  |  |
Operating lease income | $ | — |  |  | $ | 123,685 |  |  | $ | 63,159 |  |  | $ | 840 |  |  | $ | — |  |  | $ | 187,684 |
Interest income | 106,548 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 106,548 |
Other income | 2,633 |  |  | 2,603 |  |  | 49,641 |  |  | 126,259 |  |  | 6,955 |  |  | 188,091 |
Land development revenue | — |  |  | — |  |  | — |  |  | 196,879 |  |  | — |  |  | 196,879 |
Earnings (loss) from equity method investments | — |  |  | 5,086 |  |  | (772 | ) |  | 7,292 |  |  | 1,409 |  |  | 13,015 |
Income from discontinued operations | — |  |  | 4,939 |  |  | — |  |  | — |  |  | — |  |  | 4,939 |
Gain from discontinued operations | — |  |  | 123,418 |  |  | — |  |  | — |  |  | — |  |  | 123,418 |
Income from sales of real estate | — |  |  | 87,512 |  |  | 4,537 |  |  | — |  |  | — |  |  | 92,049 |
Total revenue and other earnings | 109,181 |  |  | 347,243 |  |  | 116,565 |  |  | 331,270 |  |  | 8,364 |  |  | 912,623 |
Real estate expense | — |  |  | (16,742 | ) |  | (89,725 | ) |  | (41,150 | ) |  | — |  |  | (147,617 | )
Land development cost of sales | — |  |  | — |  |  | — |  |  | (180,916 | ) |  | — |  |  | (180,916 | )
Other expense | (1,413 | ) |  | — |  |  | — |  |  | — |  |  | (19,541 | ) |  | (20,954 | )
Allocated interest expense | (40,359 | ) |  | (53,710 | ) |  | (20,171 | ) |  | (28,033 | ) |  | (52,413 | ) |  | (194,686 | )
Allocated general and administrative(2) | (15,223 | ) |  | (19,563 | ) |  | (8,075 | ) |  | (16,483 | ) |  | (20,726 | ) |  | (80,070 | )
Segment profit (loss) (3) | $ | 52,186 |  |  | $ | 257,228 |  |  | $ | (1,406 | ) |  | $ | 64,688 |  |  | $ | (84,316 | ) |  | $ | 288,380 |
Other significant non-cash items: |  |  |  |  |  |  |  |  |  |  |
Recovery of loan losses | $ | (5,828 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (5,828 | )
Impairment of assets | — |  |  | 5,486 |  |  | 6,358 |  |  | 20,535 |  |  | — |  |  | 32,379 |
Depreciation and amortization | — |  |  | 28,132 |  |  | 17,684 |  |  | 1,896 |  |  | 1,321 |  |  | 49,033 |
Capitalized expenditures | — |  |  | 4,838 |  |  | 35,754 |  |  | 125,744 |  |  | — |  |  | 166,336 |

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Notes to Consolidated Financial Statements (Continued)

| Real Estate Finance |  | Net Lease |  | Operating Properties |  | Land and Development |  | Corporate/Other(1) |  | Company Total
Year Ended December 31, 2016 |  |  |  |  |  |  |  |  |  |
Operating lease income | $ | — |  |  | $ | 126,164 |  |  | $ | 64,593 |  |  | $ | 423 |  |  | $ | — |  |  | $ | 191,180 |
Interest income | 129,153 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 129,153 |
Other income | 4,658 |  |  | 1,632 |  |  | 33,216 |  |  | 3,170 |  |  | 3,838 |  |  | 46,514 |
Land development revenue | — |  |  | — |  |  | — |  |  | 88,340 |  |  | — |  |  | 88,340 |
Earnings (loss) from equity method investments | — |  |  | 3,567 |  |  | 33,863 |  |  | 30,012 |  |  | 9,907 |  |  | 77,349 |
Income from discontinued operations | — |  |  | 18,270 |  |  | — |  |  | — |  |  | — |  |  | 18,270 |
Income from sales of real estate | — |  |  | 21,138 |  |  | 75,357 |  |  | 8,801 |  |  | — |  |  | 105,296 |
Total revenue and other earnings | 133,811 |  |  | 170,771 |  |  | 207,029 |  |  | 130,746 |  |  | 13,745 |  |  | 656,102 |
Real estate expense | — |  |  | (18,158 | ) |  | (82,401 | ) |  | (36,963 | ) |  | — |  |  | (137,522 | )
Land development cost of sales | — |  |  | — |  |  | — |  |  | (62,007 | ) |  | — |  |  | (62,007 | )
Other expense | (2,719 | ) |  | — |  |  | — |  |  | — |  |  | (3,164 | ) |  | (5,883 | )
Allocated interest expense | (57,787 | ) |  | (65,880 | ) |  | (23,156 | ) |  | (34,888 | ) |  | (39,687 | ) |  | (221,398 | )
Allocated general and administrative(2) | (15,311 | ) |  | (17,585 | ) |  | (6,574 | ) |  | (13,693 | ) |  | (19,975 | ) |  | (73,138 | )
Segment profit (loss) (3) | $ | 57,994 |  |  | $ | 69,148 |  |  | $ | 94,898 |  |  | $ | (16,805 | ) |  | $ | (49,081 | ) |  | $ | 156,154 |
Other significant non-cash items: |  |  |  |  |  |  |  |  |  |  |
Recovery of loan losses | $ | (12,514 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (12,514 | )
Impairment of assets | — |  |  | 4,829 |  |  | 5,855 |  |  | 3,800 |  |  | — |  |  | 14,484 |
Depreciation and amortization | — |  |  | 31,380 |  |  | 17,887 |  |  | 1,296 |  |  | 1,097 |  |  | 51,660 |
Capitalized expenditures | — |  |  | 3,667 |  |  | 56,784 |  |  | 109,548 |  |  | — |  |  | 169,999 |
As of December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate, net | $ | — |  |  | $ | 1,536,494 |  |  | $ | 234,525 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,771,019 |
Real estate available and held for sale | — |  |  | 1,055 |  |  | 21,496 |  |  | — |  |  | — |  |  | 22,551 |
Total real estate | — |  |  | 1,537,549 |  |  | 256,021 |  |  | — |  |  | — |  |  | 1,793,570 |
Land and development, net | — |  |  | — |  |  | — |  |  | 598,218 |  |  | — |  |  | 598,218 |
Loans receivable and other lending investments, net | 988,224 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 988,224 |
Other investments | — |  |  | 165,804 |  |  | 65,643 |  |  | 65,312 |  |  | 7,516 |  |  | 304,275 |
Total portfolio assets | $ | 988,224 |  |  | $ | 1,703,353 |  |  | $ | 321,664 |  |  | $ | 663,530 |  |  | $ | 7,516 |  |  | 3,684,287 |
Cash and other assets |  |  |  |  |  |  |  |  |  |  | 1,329,990 |
Total assets |  |  |  |  |  |  |  |  |  |  | $ | 5,014,277 |
As of December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate, net | $ | — |  |  | $ | 815,783 |  |  | $ | 466,248 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,282,031 |
Real estate available and held for sale | — |  |  | — |  |  | 68,588 |  |  | — |  |  | — |  |  | 68,588 |
Total real estate | — |  |  | 815,783 |  |  | 534,836 |  |  | — |  |  | — |  |  | 1,350,619 |
Land and development, net | — |  |  | — |  |  | — |  |  | 860,311 |  |  | — |  |  | 860,311 |
Loans receivable and other lending investments, net | 1,300,655 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,300,655 |
Other investments | — |  |  | 205,007 |  |  | 38,761 |  |  | 63,855 |  |  | 13,618 |  |  | 321,241 |
Total portfolio assets | $ | 1,300,655 |  |  | $ | 1,020,790 |  |  | $ | 573,597 |  |  | $ | 924,166 |  |  | $ | 13,618 |  |  | 3,832,826 |
Cash and other assets |  |  |  |  |  |  |  |  |  |  | 898,252 |
Total assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,731,078 |

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
_______________________________________________________________________________

(1) | Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not included in the other reportable segments above.

(2) | General and administrative excludes stock-based compensation expense of $17.6 million, $18.8 million and $10.9 million for the years ended December 31, 2018, 2017 and 2016, respectively.

(3) | The following is a reconciliation of segment profit to net income (loss) ($ in thousands):

| For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Segment profit | $ | 233,163 |  |  | $ | 288,380 |  |  | $ | 156,154 |
Less: (Provision for) recovery of loan losses | (16,937 | ) |  | 5,828 |  |  | 12,514 |
Less: Impairment of assets | (147,108 | ) |  | (32,379 | ) |  | (14,484 | )
Less: Depreciation and amortization | (58,699 | ) |  | (49,033 | ) |  | (51,660 | )
Less: Stock-based compensation expense | (17,563 | ) |  | (18,812 | ) |  | (10,889 | )
Less: Income tax (expense) benefit | (815 | ) |  | 948 |  |  | 10,166 |
Less: Loss on early extinguishment of debt, net | (10,367 | ) |  | (14,724 | ) |  | (1,619 | )
Net income (loss) | $ | (18,326 | ) |  | $ | 180,208 |  |  | $ | 100,182 |

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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Note 18—Quarterly Financial Information (Unaudited)
The following table sets forth the selected quarterly financial data for the Company ($ in thousands, except per share amounts).

|  | For the Quarters Ended
|  | December 31, |  | September 30, |  | June 30, |  | March 31,
2018: |  |  |  |  |  |  |  |
Revenue |  | $ | 140,165 |  |  | $ | 122,141 |  |  | $ | 171,571 |  |  | $ | 364,245 |
Net income (loss) |  | $ | (105,028 | ) |  | $ | (8,832 | ) |  | $ | 60,506 |  |  | $ | 35,028 |
Net income (loss) attributable to iStar Inc. |  | $ | (107,332 | ) |  | $ | (10,860 | ) |  | $ | 50,997 |  |  | $ | 34,933 |
Earnings per common share data(1): |  |  |  |  |  |  |  |
Net income (loss) attributable to common shareholders |  |  |  |  |  |  |  |
Basic |  | $ | (115,455 | ) |  | $ | (18,984 | ) |  | $ | 42,873 |  |  | $ | 26,809 |
Diluted |  | $ | (115,455 | ) |  | $ | (18,984 | ) |  | $ | 45,123 |  |  | $ | 29,059 |
Earnings per share |  |  |  |  |  |  |  |
Basic |  | $ | (1.70 | ) |  | $ | (0.28 | ) |  | $ | 0.63 |  |  | $ | 0.39 |
Diluted |  | $ | (1.70 | ) |  | $ | (0.28 | ) |  | $ | 0.54 |  |  | $ | 0.35 |
Weighted average number of common shares |  |  |  |  |  |  |  |
Basic |  | 68,012 |  |  | 67,975 |  |  | 67,932 |  |  | 67,913 |
Diluted |  | 68,012 |  |  | 67,975 |  |  | 83,694 |  |  | 83,670 |
2017: |  |  |  |  |  |  |  |
Revenue |  | $ | 103,144 |  |  | $ | 119,872 |  |  | $ | 347,867 |  |  | $ | 108,319 |
Income from discontinued operations |  | $ | — |  |  | $ | — |  |  | $ | (173 | ) |  | $ | (4,766 | )
Net income (loss) |  | $ | 3,290 |  |  | $ | (3,716 | ) |  | $ | 196,007 |  |  | $ | (15,372 | )
Net income (loss) attributable to iStar Inc. |  | $ | 3,214 |  |  | $ | (3,556 | ) |  | $ | 190,297 |  |  | $ | (14,272 | )
Earnings per common share data(1): |  |  |  |  |  |  |  |
Net income (loss) attributable to common shareholders |  |  |  |  |  |  |  |  |
Basic |  | $ | (4,910 | ) |  | $ | (34,530 | ) |  | $ | 177,467 |  |  | $ | (27,102 | )
Diluted |  | $ | (4,910 | ) |  | $ | (34,530 | ) |  | $ | 179,722 |  |  | $ | (27,102 | )
Earnings per share |  |  |  |  |  |  |  |
Basic |  | $ | (0.07 | ) |  | $ | (0.48 | ) |  | $ | 2.46 |  |  | $ | (0.38 | )
Diluted |  | $ | (0.07 | ) |  | $ | (0.48 | ) |  | $ | 2.04 |  |  | $ | (0.38 | )
Weighted average number of common shares |  |  |  |  |  |  |  |
Basic |  | 68,200 |  |  | 71,713 |  |  | 72,142 |  |  | 72,065 |
Diluted |  | 68,200 |  |  | 71,713 |  |  | 88,195 |  |  | 72,065 |

_______________________________________________________________________________
(1) Basic and diluted EPS are computed independently based on the weighted-average shares of common stock and stock equivalents outstanding for each period. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year.
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iStar Inc.
Notes to Consolidated Financial Statements (Continued)
Note 19—Subsequent Events
On January 2, 2019, the Company invested $250.0 million in 12,500,000 Investor Units of SAFE OP, at a purchase price of $20.00 per unit. This transaction was approved by a special committee of the Company's board of directors, with the advice of independent legal and financial advisors. Each Investor Unit will receive distributions equivalent to distributions declared and paid on one share of SAFE common stock. The Investor Units have no voting rights. They have limited protective consent rights over certain matters such as amendments to the terms of the Investor Units that would adversely affect the Investor Units.
In conjunction with this investment, the Company and SAFE have entered into an amended and restated management agreement. The revised agreement reflects the Company's increased commitment to SAFE and aligns with SAFE's ambitious future growth targets. The material revised terms of the amended management agreement are summarized in the following table.

Terms |  | Prior Agreement |  | Amended Agreement
Management Fee |  | Annual fee of 1.0% of SAFE total equity (up to $2.5 billion) Annual fee of 0.75% of SAFE total equity (> $2.5 billion) |  | Annual fee of 1.0% of SAFE total equity (up to $1.5 billion) Annual fee of 1.25% of SAFE total equity (for incremental equity of $1.5 billion to $3.0 billion) Annual fee of 1.375% of SAFE total equity (for incremental equity of $3.0 billion to $5.0 billion) and Annual fee of 1.5% of SAFE total equity (for incremental equity over $5.0 billion)
Management Fee Consideration |  | Payment will be made exclusively in shares of the SAFE's common stock (valued at the greater of: (i) the volume weighted average market price during the quarter for which the fee is being paid; or (ii) the initial public offering price of $20.00 per share) |  | At the discretion of the SAFE's independent directors, payment will be made in cash or in shares of SAFE's common stock (valued at the greater of: (i) the volume weighted average market price during the quarter for which the fee is being paid; or (ii) the initial public offering price of $20.00 per share)
Term |  | One year |  | Initial term from January 1, 2019 - June 30, 2022; non-terminable except for cause. Automatic annual renewals thereafter, subject to non-renewal upon certain findings by SAFE's independent directors and payment of termination fee.
Termination Fee |  | None |  | Three times prior year's management fee, subject to the SAFE having raised $820 million of total equity since inception.

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iStar Inc.
Schedule II—Valuation and Qualifying Accounts and Reserves
($ in thousands)

|  | Balance at Beginning of Period |  | Charged to Costs and Expenses |  | Adjustments to Valuation Accounts |  | Deductions |  | Balance at End of Period
For the Year Ended December 31, 2016 |  |  |  |  |  |  |  |  |  |
Reserve for loan losses(1)(2) |  | $ | 108,165 |  |  | $ | (12,514 | ) |  | $ | — |  |  | $ | (10,106 | ) |  | $ | 85,545 |
Allowance for doubtful accounts(2) |  | 3,384 |  |  | 985 |  |  | — |  |  | (1,781 | ) |  | 2,588 |
Allowance for deferred tax assets(2) |  | 53,910 |  |  | 3,233 |  |  | 15,838 |  |  | (6,483 | ) |  | 66,498 |
|  | $ | 165,459 |  |  | $ | (8,296 | ) |  | $ | 15,838 |  |  | $ | (18,370 | ) |  | $ | 154,631 |
For the Year Ended December 31, 2017 |  |  |  |  |  |  |  |  |  |
Reserve for loan losses(1)(2) |  | $ | 85,545 |  |  | $ | (5,828 | ) |  | $ | — |  |  | $ | (1,228 | ) |  | $ | 78,489 |
Allowance for doubtful accounts(2) |  | 2,588 |  |  | 473 |  |  | — |  |  | (451 | ) |  | 2,610 |
Allowance for deferred tax assets(2) |  | 66,498 |  |  | 7,108 |  |  | (9,318 | ) |  | (1,030 | ) |  | 63,258 |
|  | $ | 154,631 |  |  | $ | 1,753 |  |  | $ | (9,318 | ) |  | $ | (2,709 | ) |  | $ | 144,357 |
For the Year Ended December 31, 2018 |  |  |  |  |  |  |  |  |  |
Reserve for loan losses(1)(2) |  | $ | 78,489 |  |  | $ | 16,937 |  |  | $ | — |  |  | $ | (42,031 | ) |  | $ | 53,395 |
Allowance for doubtful accounts(2) |  | 2,610 |  |  | 1,300 |  |  | — |  |  | (639 | ) |  | 3,271 |
Allowance for deferred tax assets(2) |  | 63,258 |  |  | 14,849 |  |  | — |  |  | — |  |  | 78,107 |
|  | $ | 144,357 |  |  | $ | 33,086 |  |  | $ | — |  |  | $ | (42,670 | ) |  | $ | 134,773 |

_____________________________________________________________

(1) | Refer to Note 6 to the Company's consolidated financial statements.

(2) | Refer to Note 3 to the Company's consolidated financial statements.

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
OFFICE FACILITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tempe, Arizona | OFF001 | $ | — |  |  | (1) |  | $ | 1,033 |  |  | $ | 6,652 |  |  | $ | 2,942 |  |  | $ | 1,033 |  |  | $ | 9,594 |  |  | $ | 10,627 |  |  | $ | 4,512 |  |  | 1999 |  | 40.0
Tempe, Arizona | OFF002 | — |  |  | (1) |  | 1,033 |  |  | 6,652 |  |  | 287 |  |  | 1,033 |  |  | 6,939 |  |  | 7,972 |  |  | 3,331 |  |  | 1999 |  | 40.0
Tempe, Arizona | OFF003 | — |  |  | (1) |  | 1,033 |  |  | 6,652 |  |  | 461 |  |  | 1,033 |  |  | 7,113 |  |  | 8,146 |  |  | 3,314 |  |  | 1999 |  | 40.0
Tempe, Arizona | OFF004 | — |  |  | (1) |  | 701 |  |  | 4,339 |  |  | 2,171 |  |  | 701 |  |  | 6,510 |  |  | 7,211 |  |  | 2,257 |  |  | 1999 |  | 40.0
Alameda, California | OFF005 | 27,602 |  |  |  |  | 9,702 |  |  | 29,831 |  |  | 1,152 |  |  | 9,702 |  |  | 30,983 |  |  | 40,685 |  |  | 479 |  |  | 2018 |  | 40.0
Ft. Collins, Colorado | OFF006 | 434 |  |  | (1) |  | — |  |  | 16,752 |  |  | (11,239 | ) |  | — |  |  | 5,513 |  |  | 5,513 |  |  | — |  |  | 2002 |  | 40.0
Lisle, Illinois | OFF007 | 22,626 |  |  |  |  | 7,681 |  |  | 30,230 |  |  | — |  |  | 7,681 |  |  | 30,230 |  |  | 37,911 |  |  | 482 |  |  | 2018 |  | 40.0
Cockeysville, Maryland | OFF008 | 115,000 |  |  |  |  | 19,529 |  |  | 148,286 |  |  | — |  |  | 19,529 |  |  | 148,286 |  |  | 167,815 |  |  | 877 |  |  | 2018 |  | 40.0
Chelmsford, Massachusetts | OFF009 | 8,179 |  |  | (1) |  | 1,600 |  |  | 21,947 |  |  | 285 |  |  | 1,600 |  |  | 22,232 |  |  | 23,832 |  |  | 9,420 |  |  | 2002 |  | 40.0
Mt. Laurel, New Jersey | OFF010 | 48,968 |  |  |  |  | 7,726 |  |  | 74,429 |  |  | 10 |  |  | 7,724 |  |  | 74,441 |  |  | 82,165 |  |  | 29,894 |  |  | 2002 |  | 40.0
Riverview, New Jersey | OFF011 | 7,795 |  |  | (1) |  | 1,008 |  |  | 13,763 |  |  | 206 |  |  | 1,008 |  |  | 13,969 |  |  | 14,977 |  |  | 5,136 |  |  | 2004 |  | 40.0
Riverview, New Jersey | OFF012 | 20,568 |  |  | (1) |  | 2,456 |  |  | 28,955 |  |  | 814 |  |  | 2,456 |  |  | 29,769 |  |  | 32,225 |  |  | 10,995 |  |  | 2004 |  | 40.0
North Hills, New York | OFF013 | 70,000 |  |  |  |  | 19,631 |  |  | 104,527 |  |  | — |  |  | 19,631 |  |  | 104,527 |  |  | 124,158 |  |  | 1,368 |  |  | 2018 |  | 40.0
Harrisburg, Pennsylvania | OFF014 | — |  |  | (1) |  | 690 |  |  | 26,098 |  |  | (20,084 | ) |  | 257 |  |  | 6,447 |  |  | 6,704 |  |  | — |  |  | 2001 |  | 40.0
Irving, Texas | OFF015 | — |  |  | (1) |  | 1,364 |  |  | 10,628 |  |  | 5,780 |  |  | 2,373 |  |  | 15,399 |  |  | 17,772 |  |  | 7,846 |  |  | 1999 |  | 40.0
Richardson, Texas | OFF016 | — |  |  |  |  | 1,230 |  |  | 5,660 |  |  | 1,207 |  |  | 1,230 |  |  | 6,867 |  |  | 8,097 |  |  | 2,983 |  |  | 1999 |  | 40.0
Oakton, Virginia | OFF017 | 56,133 |  |  |  |  | 14,242 |  |  | 68,610 |  |  | — |  |  | 14,242 |  |  | 68,610 |  |  | 82,852 |  |  | 1,035 |  |  | 2018 |  | 40.0
Subtotal |  | $ | 377,305 |  |  |  |  | $ | 90,659 |  |  | $ | 604,011 |  |  | $ | (16,008 | ) |  | $ | 91,233 |  |  | $ | 587,429 |  |  | $ | 678,662 |  |  | $ | 83,929 |  |  |  |  |
INDUSTRIAL FACILITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Avondale, Arizona | IND001 | — |  |  |  |  | 3,279 |  |  | 5,221 |  |  | (7,554 | ) |  | 946 |  |  | — |  |  | 946 |  |  | — |  |  | 2009 |  | 40.0
Los Angeles, California | IND002 | 34,968 |  |  |  |  | 11,635 |  |  | 19,515 |  |  | 5,943 |  |  | 11,635 |  |  | 25,458 |  |  | 37,093 |  |  | 7,042 |  |  | 2007 |  | 40.0
Jacksonville, Florida | IND003 | 30,397 |  |  |  |  | 3,510 |  |  | 20,846 |  |  | 8,279 |  |  | 3,510 |  |  | 29,125 |  |  | 32,635 |  |  | 7,707 |  |  | 2007 |  | 40.0
Atlanta, Georgia | IND004 | 26,237 |  |  |  |  | 2,791 |  |  | 24,637 |  |  | 349 |  |  | 2,791 |  |  | 24,986 |  |  | 27,777 |  |  | 6,985 |  |  | 2007 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Bristol, Indiana | IND005 | — |  |  | (1) |  | 462 |  |  | 9,224 |  |  | — |  |  | 462 |  |  | 9,224 |  |  | 9,686 |  |  | 3,473 |  |  | 2007 |  | 40.0
Everett, Massachusetts | IND006 | 37,482 |  |  |  |  | 7,439 |  |  | 21,774 |  |  | 10,979 |  |  | 7,439 |  |  | 32,753 |  |  | 40,192 |  |  | 8,666 |  |  | 2007 |  | 40.0
Montague, Michigan | IND007 | — |  |  | (1) |  | 598 |  |  | 9,814 |  |  | 1 |  |  | 598 |  |  | 9,815 |  |  | 10,413 |  |  | 3,733 |  |  | 2007 |  | 40.0
Little Falls, Minnesota | IND008 | — |  |  | (1) |  | 6,705 |  |  | 17,690 |  |  | — |  |  | 6,225 |  |  | 18,170 |  |  | 24,395 |  |  | 6,319 |  |  | 2005 |  | 40.0
Elizabeth, New Jersey | IND009 | 42,053 |  |  |  |  | 8,368 |  |  | 15,376 |  |  | 21,141 |  |  | 8,368 |  |  | 36,517 |  |  | 44,885 |  |  | 9,737 |  |  | 2007 |  | 40.0
Jackson, Ohio | IND010 | 35,520 |  |  |  |  | 1,990 |  |  | 56,329 |  |  | 2,891 |  |  | 1,990 |  |  | 59,220 |  |  | 61,210 |  |  | 828 |  |  | 2018 |  | 40.0
El Reno, Oklahoma | IND011 | 9,154 |  |  |  |  | 401 |  |  | 7,644 |  |  | — |  |  | 401 |  |  | 7,644 |  |  | 8,045 |  |  | 205 |  |  | 2018 |  | 40.0
Fort Worth, Texas | IND012 | 9,154 |  |  |  |  | 2,341 |  |  | 17,142 |  |  | — |  |  | 2,341 |  |  | 17,142 |  |  | 19,483 |  |  | 269 |  |  | 2018 |  | 40.0
La Porte, Texas | IND013 | 27,426 |  |  |  |  | 1,631 |  |  | 27,858 |  |  | (416 | ) |  | 1,631 |  |  | 27,442 |  |  | 29,073 |  |  | 7,614 |  |  | 2007 |  | 40.0
Chesapeake, Virginia | IND014 | 29,437 |  |  |  |  | 2,619 |  |  | 28,481 |  |  | 142 |  |  | 2,619 |  |  | 28,623 |  |  | 31,242 |  |  | 8,000 |  |  | 2007 |  | 40.0
Chippewa Falls, Wisconsin | IND015 | 32,380 |  |  |  |  | 2,845 |  |  | 55,805 |  |  | — |  |  | 2,845 |  |  | 55,805 |  |  | 58,650 |  |  | 879 |  |  | 2018 |  | 40.0
Subtotal |  | $ | 314,208 |  |  |  |  | $ | 56,614 |  |  | $ | 337,356 |  |  | $ | 41,755 |  |  | $ | 53,801 |  |  | $ | 381,924 |  |  | $ | 435,725 |  |  | $ | 71,457 |  |  |  |  |
LAND: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Scottsdale, Arizona | LAN001 | — |  |  |  |  | 1,400 |  |  | — |  |  | 800 |  |  | 2,200 |  |  | — |  |  | 2,200 |  |  | — |  |  | 2011 |  | 0
Whittmann, Arizona | LAN002 | — |  |  |  |  | 96,700 |  |  | — |  |  | — |  |  | 96,700 |  |  | — |  |  | 96,700 |  |  | — |  |  | 2010 |  | 0
Mammoth Lakes, California | LAN003 | — |  |  |  |  | 28,464 |  |  | 2,836 |  |  | (21,064 | ) |  | 7,400 |  |  | 2,836 |  |  | 10,236 |  |  | 2,836 |  |  | 2010 |  | 0
Mammoth, California | LAN004 | — |  |  |  |  | 2,382 |  |  | — |  |  | — |  |  | 2,382 |  |  | — |  |  | 2,382 |  |  | — |  |  | 2007 |  | 0
San Jose, California | LAN005 | — |  |  |  |  | 8,921 |  |  | — |  |  | — |  |  | 8,921 |  |  | — |  |  | 8,921 |  |  | — |  |  | 2017 |  | 0
Santa Clarita Valley, California | LAN006 | — |  |  |  |  | 59,100 |  |  | — |  |  | (21,600 | ) |  | 37,500 |  |  | — |  |  | 37,500 |  |  | — |  |  | 2010 |  | 0
Fort Myers, Florida | LAN007 | — |  |  |  |  | 7,600 |  |  | — |  |  | — |  |  | 7,600 |  |  | — |  |  | 7,600 |  |  | — |  |  | 2009 |  | 0
Fort Myers, Florida | LAN008 | — |  |  |  |  | 5,883 |  |  | — |  |  | 1,789 |  |  | 7,494 |  |  | 178 |  |  | 7,672 |  |  | — |  |  | 2014 |  | 0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Indiantown, Florida | LAN009 | — |  |  |  |  | 8,100 |  |  | — |  |  | — |  |  | 8,100 |  |  | — |  |  | 8,100 |  |  | — |  |  | 2009 |  | 0
Naples, Florida | LAN010 | — |  |  |  |  | 26,600 |  |  | — |  |  | 13,538 |  |  | 26,600 |  |  | 13,538 |  |  | 40,138 |  |  | 2 |  |  | 2010 |  | 0
St. Lucie, Florida | LAN011 | — |  |  |  |  | 10,440 |  |  | — |  |  | (6,940 | ) |  | 3,500 |  |  | — |  |  | 3,500 |  |  | — |  |  | 2013 |  | 0
Stuart, Florida | LAN012 | — |  |  |  |  | 9,300 |  |  | — |  |  | (1,900 | ) |  | 7,400 |  |  | — |  |  | 7,400 |  |  | — |  |  | 2010 |  | 0
Chicago, Illinois | LAN013 | — |  |  |  |  | 31,500 |  |  | — |  |  | — |  |  | 31,500 |  |  | — |  |  | 31,500 |  |  | — |  |  | 2016 |  | 0
Asbury Park, New Jersey | LAN014 | — |  |  |  |  | 43,300 |  |  | — |  |  | 32,296 |  |  | 75,596 |  |  | — |  |  | 75,596 |  |  | 942 |  | (3) | 2009 |  | 0
Asbury Park, New Jersey | LAN015 | — |  |  |  |  | 3,992 |  |  | — |  |  | 161,358 |  |  | 165,350 |  |  | — |  |  | 165,350 |  |  | — |  | (3) | 2009 |  | 0
Brooklyn, New York | LAN016 | — |  |  |  |  | 58,900 |  |  | — |  |  | (19,874 | ) |  | 39,026 |  |  | — |  |  | 39,026 |  |  | — |  |  | 2011 |  | 0
Long Beach, New York | LAN017 | — |  |  |  |  | 52,461 |  |  | — |  |  | (22,461 | ) |  | 30,000 |  |  | — |  |  | 30,000 |  |  | — |  |  | 2009 |  | 0
Wawarsing, New York | LAN018 | — |  |  |  |  | 4,600 |  |  | — |  |  | — |  |  | 4,600 |  |  | — |  |  | 4,600 |  |  | — |  |  | 2018 |  | 0
Warrington, Pennsylvania | LAN019 | — |  |  |  |  | 1,460 |  |  | — |  |  | 664 |  |  | 1,460 |  |  | 664 |  |  | 2,124 |  |  | — |  |  | 2011 |  | 0
Chesterfield County, Virginia | LAN020 | — |  |  |  |  | 72,138 |  |  | — |  |  | 41,773 |  |  | 113,911 |  |  | — |  |  | 113,911 |  |  | 4,338 |  | (3) | 2009 |  | 0
Chesterfield County, Virginia | LAN021 | — |  |  |  |  | 3,291 |  |  | — |  |  | 397 |  |  | 3,688 |  |  | — |  |  | 3,688 |  |  | — |  | (3) | 2009 |  | 0
Ranson, West Virginia | LAN022 | — |  |  |  |  | 9,083 |  |  |  |  |  | (1,256 | ) |  | 7,827 |  |  | — |  |  | 7,827 |  |  | — |  |  | 2016 |  | 0
Subtotal |  | $ | — |  |  |  |  | $ | 545,615 |  |  | $ | 2,836 |  |  | $ | 157,520 |  |  | $ | 688,755 |  |  | $ | 17,216 |  |  | $ | 705,971 |  |  | $ | 8,118 |  |  |  |  |
ENTERTAINMENT: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Birmingham, Alabama | ENT001 | 1,698 |  |  |  |  | 1,939 |  |  | 1,840 |  |  | — |  |  | 1,939 |  |  | 1,840 |  |  | 3,779 |  |  | 58 |  |  | 2018 |  | 40.0
Decatur, Alabama | ENT002 | — |  |  | (1) |  | 277 |  |  | 359 |  |  | (6 | ) |  | 277 |  |  | 353 |  |  | 630 |  |  | 128 |  |  | 2004 |  | 40.0
Huntsville, Alabama | ENT003 | — |  |  | (1) |  | 319 |  |  | 414 |  |  | (25 | ) |  | 319 |  |  | 389 |  |  | 708 |  |  | 136 |  |  | 2004 |  | 40.0
Mobile, Alabama | ENT004 | — |  |  |  |  | 279 |  |  | 1,250 |  |  | — |  |  | 279 |  |  | 1,250 |  |  | 1,529 |  |  | 71 |  |  | 2018 |  | 40.0
Avondale, Arizona | ENT005 | 1,357 |  |  |  |  | 389 |  |  | 2,074 |  |  | 1 |  |  | 389 |  |  | 2,075 |  |  | 2,464 |  |  | 39 |  |  | 2018 |  | 40.0
Chandler, Arizona | ENT006 | — |  |  | (1) |  | 793 |  |  | 1,027 |  |  | (62 | ) |  | 793 |  |  | 965 |  |  | 1,758 |  |  | 337 |  |  | 2004 |  | 40.0
Chandler, Arizona | ENT007 | — |  |  | (1) |  | 521 |  |  | 673 |  |  | (10 | ) |  | 521 |  |  | 663 |  |  | 1,184 |  |  | 240 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Glendale, Arizona | ENT008 | 2,393 |  |  |  |  | 1,750 |  |  | 2,118 |  |  | — |  |  | 1,750 |  |  | 2,118 |  |  | 3,868 |  |  | 63 |  |  | 2018 |  | 40.0
Gilbert, Arizona | ENT009 | 5,038 |  |  |  |  | 1,969 |  |  | 3,552 |  |  | — |  |  | 1,969 |  |  | 3,552 |  |  | 5,521 |  |  | 82 |  |  | 2018 |  | 40.0
Mesa, Arizona | ENT010 | 1,520 |  |  |  |  | 970 |  |  | 1,710 |  |  | — |  |  | 970 |  |  | 1,710 |  |  | 2,680 |  |  | 38 |  |  | 2018 |  | 40.0
Mesa, Arizona | ENT011 | — |  |  | (1) |  | 630 |  |  | 815 |  |  | (49 | ) |  | 630 |  |  | 766 |  |  | 1,396 |  |  | 267 |  |  | 2004 |  | 40.0
Peoria, Arizona | ENT012 | — |  |  | (1) |  | 590 |  |  | 764 |  |  | (46 | ) |  | 590 |  |  | 718 |  |  | 1,308 |  |  | 250 |  |  | 2004 |  | 40.0
Phoenix, Arizona | ENT013 | — |  |  | (1) |  | 476 |  |  | 616 |  |  | (10 | ) |  | 476 |  |  | 606 |  |  | 1,082 |  |  | 220 |  |  | 2004 |  | 40.0
Phoenix, Arizona | ENT014 | — |  |  | (1) |  | 654 |  |  | 845 |  |  | (14 | ) |  | 654 |  |  | 831 |  |  | 1,485 |  |  | 302 |  |  | 2004 |  | 40.0
Phoenix, Arizona | ENT015 | — |  |  | (1) |  | 666 |  |  | 862 |  |  | (14 | ) |  | 666 |  |  | 848 |  |  | 1,514 |  |  | 307 |  |  | 2004 |  | 40.0
Scottsdale, Arizona | ENT016 | 1,778 |  |  |  |  | 1,205 |  |  | 1,933 |  |  | — |  |  | 1,205 |  |  | 1,933 |  |  | 3,138 |  |  | 41 |  |  | 2018 |  | 40.0
Tempe, Arizona | ENT017 | — |  |  | (1) |  | 460 |  |  | 596 |  |  | (36 | ) |  | 460 |  |  | 560 |  |  | 1,020 |  |  | 195 |  |  | 2004 |  | 40.0
Tucson, Arizona | ENT018 | 994 |  |  |  |  | 456 |  |  | 877 |  |  | 1 |  |  | 456 |  |  | 878 |  |  | 1,334 |  |  | 23 |  |  | 2018 |  | 40.0
Alameda, California | ENT019 | — |  |  | (1) |  | 1,097 |  |  | 1,421 |  |  | (86 | ) |  | 1,097 |  |  | 1,335 |  |  | 2,432 |  |  | 465 |  |  | 2004 |  | 40.0
Bakersfield, California | ENT020 | — |  |  | (1) |  | 434 |  |  | 560 |  |  | (33 | ) |  | 434 |  |  | 527 |  |  | 961 |  |  | 184 |  |  | 2004 |  | 40.0
Bakersfield, California | ENT021 | — |  |  | (1) |  | 332 |  |  | 429 |  |  | (26 | ) |  | 332 |  |  | 403 |  |  | 735 |  |  | 141 |  |  | 2004 |  | 40.0
Chula Vista, California | ENT022 | 2,678 |  |  |  |  | 2,032 |  |  | 4,869 |  |  | — |  |  | 2,032 |  |  | 4,869 |  |  | 6,901 |  |  | 111 |  |  | 2018 |  | 40.0
Fontana, California | ENT023 | 1,656 |  |  |  |  | 1,097 |  |  | 1,882 |  |  | 1 |  |  | 1,097 |  |  | 1,883 |  |  | 2,980 |  |  | 49 |  |  | 2018 |  | 40.0
Milpitas, California | ENT024 | — |  |  | (1) |  | 676 |  |  | 876 |  |  | (53 | ) |  | 676 |  |  | 823 |  |  | 1,499 |  |  | 287 |  |  | 2004 |  | 40.0
Moreno Valley, California | ENT025 | 1,577 |  |  |  |  | 990 |  |  | 1,910 |  |  | — |  |  | 990 |  |  | 1,910 |  |  | 2,900 |  |  | 46 |  |  | 2018 |  | 40.0
Murrieta, California | ENT026 | 2,890 |  |  |  |  | 1,649 |  |  | 3,803 |  |  | — |  |  | 1,649 |  |  | 3,803 |  |  | 5,452 |  |  | 86 |  |  | 2018 |  | 40.0
Norco, California | ENT027 | 2,697 |  |  |  |  | 1,503 |  |  | 3,608 |  |  | — |  |  | 1,503 |  |  | 3,608 |  |  | 5,111 |  |  | 79 |  |  | 2018 |  | 40.0
Palmdale, California | ENT028 | 1,157 |  |  |  |  | 777 |  |  | 1,963 |  |  | — |  |  | 777 |  |  | 1,963 |  |  | 2,740 |  |  | 53 |  |  | 2018 |  | 40.0
Riverside, California | ENT029 | — |  |  | (1) |  | 720 |  |  | 932 |  |  | (56 | ) |  | 720 |  |  | 876 |  |  | 1,596 |  |  | 305 |  |  | 2004 |  | 40.0
Rocklin, California | ENT030 | — |  |  | (1) |  | 574 |  |  | 743 |  |  | (12 | ) |  | 574 |  |  | 731 |  |  | 1,305 |  |  | 265 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Sacramento, California | ENT031 | — |  |  | (1) |  | 392 |  |  | 508 |  |  | (8 | ) |  | 392 |  |  | 500 |  |  | 892 |  |  | 181 |  |  | 2004 |  | 40.0
San Bernardino, California | ENT032 | — |  |  | (1) |  | 358 |  |  | 464 |  |  | (7 | ) |  | 358 |  |  | 457 |  |  | 815 |  |  | 165 |  |  | 2004 |  | 40.0
San Diego, California | ENT033 | — |  |  | (1) |  | — |  |  | 18,000 |  |  | — |  |  | — |  |  | 18,000 |  |  | 18,000 |  |  | 6,456 |  |  | 2003 |  | 40.0
San Marcos, California | ENT034 | — |  |  | (1) |  | 852 |  |  | 1,101 |  |  | (18 | ) |  | 852 |  |  | 1,083 |  |  | 1,935 |  |  | 393 |  |  | 2004 |  | 40.0
Thousand Oaks, California | ENT035 | — |  |  | (1) |  | — |  |  | 1,953 |  |  | 25,772 |  |  | — |  |  | 27,725 |  |  | 27,725 |  |  | 6,814 |  |  | 2008 |  | 40.0
Torrance, California | ENT036 | — |  |  | (1) |  | 659 |  |  | 852 |  |  | (14 | ) |  | 659 |  |  | 838 |  |  | 1,497 |  |  | 304 |  |  | 2004 |  | 40.0
Upland, California | ENT037 | 1,656 |  |  |  |  | 1,167 |  |  | 1,930 |  |  | — |  |  | 1,167 |  |  | 1,930 |  |  | 3,097 |  |  | 47 |  |  | 2018 |  | 40.0
Visalia, California | ENT038 | — |  |  | (1) |  | 562 |  |  | 729 |  |  | (44 | ) |  | 562 |  |  | 685 |  |  | 1,247 |  |  | 239 |  |  | 2004 |  | 40.0
W. Los Angeles, California | ENT039 | — |  |  | (1) |  | 1,642 |  |  | 2,124 |  |  | (35 | ) |  | 1,642 |  |  | 2,089 |  |  | 3,731 |  |  | 758 |  |  | 2004 |  | 40.0
Brampton, ONT, Canada | ENT040 | 2,176 |  |  |  |  | 1,231 |  |  | 2,491 |  |  | — |  |  | 1,231 |  |  | 2,491 |  |  | 3,722 |  |  | 59 |  |  | 2018 |  | 40.0
Aurora, Colorado | ENT041 | — |  |  | (1) |  | 640 |  |  | 827 |  |  | (49 | ) |  | 640 |  |  | 778 |  |  | 1,418 |  |  | 271 |  |  | 2004 |  | 40.0
Aurora, Colorado | ENT042 | 1,675 |  |  |  |  | 1,057 |  |  | 1,719 |  |  | — |  |  | 1,057 |  |  | 1,719 |  |  | 2,776 |  |  | 44 |  |  | 2018 |  | 40.0
Colorado Springs, Colorado | ENT043 | 1,141 |  |  |  |  | 497 |  |  | 820 |  |  | — |  |  | 497 |  |  | 820 |  |  | 1,317 |  |  | 24 |  |  | 2018 |  | 40.0
Denver, Colorado | ENT044 | — |  |  | (1) |  | 729 |  |  | 944 |  |  | (57 | ) |  | 729 |  |  | 887 |  |  | 1,616 |  |  | 309 |  |  | 2004 |  | 40.0
Englewood, Colorado | ENT045 | — |  |  | (1) |  | 536 |  |  | 694 |  |  | (11 | ) |  | 536 |  |  | 683 |  |  | 1,219 |  |  | 248 |  |  | 2004 |  | 40.0
Lakewood, Colorado | ENT046 | 1,587 |  |  |  |  | 713 |  |  | 2,206 |  |  | — |  |  | 713 |  |  | 2,206 |  |  | 2,919 |  |  | 37 |  |  | 2018 |  | 40.0
Littleton, Colorado | ENT047 | — |  |  | (1) |  | 901 |  |  | 1,165 |  |  | (19 | ) |  | 901 |  |  | 1,146 |  |  | 2,047 |  |  | 416 |  |  | 2004 |  | 40.0
Lone Tree, Colorado | ENT048 | 5,728 |  |  |  |  | 2,880 |  |  | 5,586 |  |  | — |  |  | 2,880 |  |  | 5,586 |  |  | 8,466 |  |  | 115 |  |  | 2018 |  | 40.0
Westminster, Colorado | ENT049 | 1,681 |  |  |  |  | 1,018 |  |  | 1,886 |  |  | — |  |  | 1,018 |  |  | 1,886 |  |  | 2,904 |  |  | 45 |  |  | 2018 |  | 40.0
Wheat Ridge, Colorado | ENT050 | 1,090 |  |  |  |  | 669 |  |  | 1,671 |  |  | — |  |  | 669 |  |  | 1,671 |  |  | 2,340 |  |  | 40 |  |  | 2018 |  | 40.0
Milford, Connecticut | ENT051 | — |  |  | (1) |  | 1,097 |  |  | 1,420 |  |  | (23 | ) |  | 1,097 |  |  | 1,397 |  |  | 2,494 |  |  | 506 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Wilmington, Delaware | ENT052 | — |  |  | (1) |  | 1,076 |  |  | 1,390 |  |  | (80 | ) |  | 1,076 |  |  | 1,310 |  |  | 2,386 |  |  | 457 |  |  | 2004 |  | 40.0
Apopka, Florida | ENT053 | 1,195 |  |  |  |  | 757 |  |  | 1,347 |  |  | — |  |  | 757 |  |  | 1,347 |  |  | 2,104 |  |  | 34 |  |  | 2018 |  | 40.0
Boca Raton, Florida | ENT054 | — |  |  | (1) |  | — |  |  | 41,809 |  |  | — |  |  | — |  |  | 41,809 |  |  | 41,809 |  |  | 21,371 |  |  | 2005 |  | 27.0
Boynton Beach, Florida | ENT055 | — |  |  | (1) |  | 412 |  |  | 531 |  |  | (7 | ) |  | 412 |  |  | 524 |  |  | 936 |  |  | 190 |  |  | 2004 |  | 40.0
Boynton Beach, Florida | ENT056 | — |  |  | (1) |  | 6,550 |  |  | — |  |  | 17,118 |  |  | 6,533 |  |  | 17,135 |  |  | 23,668 |  |  | 4,995 |  |  | 2006 |  | 40.0
Bradenton, Florida | ENT057 | — |  |  | (1) |  | 1,067 |  |  | 1,382 |  |  | (83 | ) |  | 1,067 |  |  | 1,299 |  |  | 2,366 |  |  | 453 |  |  | 2004 |  | 40.0
Davie, Florida | ENT058 | — |  |  | (1) |  | 401 |  |  | 520 |  |  | (31 | ) |  | 401 |  |  | 489 |  |  | 890 |  |  | 170 |  |  | 2004 |  | 40.0
Lakeland, Florida | ENT059 | — |  |  | (1) |  | 282 |  |  | 364 |  |  | (6 | ) |  | 282 |  |  | 358 |  |  | 640 |  |  | 130 |  |  | 2004 |  | 40.0
Leesburg, Florida | ENT060 | — |  |  | (1) |  | 352 |  |  | 455 |  |  | (28 | ) |  | 352 |  |  | 427 |  |  | 779 |  |  | 149 |  |  | 2004 |  | 40.0
Margate, Florida | ENT061 | 1,283 |  |  |  |  | 513 |  |  | 493 |  |  | — |  |  | 513 |  |  | 493 |  |  | 1,006 |  |  | 10 |  |  | 2018 |  | 40.0
Melbourne, Florida | ENT062 | 1,350 |  |  |  |  | 843 |  |  | 1,537 |  |  | — |  |  | 843 |  |  | 1,537 |  |  | 2,380 |  |  | 40 |  |  | 2018 |  | 40.0
Ocala, Florida | ENT063 | — |  |  | (1) |  | 437 |  |  | 567 |  |  | (34 | ) |  | 437 |  |  | 533 |  |  | 970 |  |  | 186 |  |  | 2004 |  | 40.0
Ocala, Florida | ENT064 | — |  |  | (1) |  | 532 |  |  | 689 |  |  | (42 | ) |  | 532 |  |  | 647 |  |  | 1,179 |  |  | 226 |  |  | 2004 |  | 40.0
Orange City, Florida | ENT065 | — |  |  | (1) |  | 486 |  |  | 629 |  |  | (38 | ) |  | 486 |  |  | 591 |  |  | 1,077 |  |  | 206 |  |  | 2004 |  | 40.0
Pembroke Pines, Florida | ENT066 | — |  |  | (1) |  | 497 |  |  | 643 |  |  | (10 | ) |  | 497 |  |  | 633 |  |  | 1,130 |  |  | 229 |  |  | 2004 |  | 40.0
Sarasota, Florida | ENT067 | — |  |  | (1) |  | 643 |  |  | 833 |  |  | (14 | ) |  | 643 |  |  | 819 |  |  | 1,462 |  |  | 297 |  |  | 2004 |  | 40.0
St. Petersburg, Florida | ENT068 | — |  |  | (1) |  | 4,200 |  |  | 18,272 |  |  | — |  |  | 4,200 |  |  | 18,272 |  |  | 22,472 |  |  | 6,326 |  |  | 2005 |  | 40.0
Tampa, Florida | ENT069 | — |  |  | (1) |  | 551 |  |  | 714 |  |  | (12 | ) |  | 551 |  |  | 702 |  |  | 1,253 |  |  | 254 |  |  | 2004 |  | 40.0
Venice, Florida | ENT070 | — |  |  | (1) |  | 507 |  |  | 656 |  |  | (40 | ) |  | 507 |  |  | 616 |  |  | 1,123 |  |  | 215 |  |  | 2004 |  | 40.0
W. Palm Beach, Florida | ENT071 | — |  |  | (1) |  | — |  |  | 19,337 |  |  | — |  |  | — |  |  | 19,337 |  |  | 19,337 |  |  | 6,693 |  |  | 2005 |  | 40.0
Augusta, Georgia | ENT072 | 1,978 |  |  |  |  | 1,383 |  |  | 3,776 |  |  | — |  |  | 1,383 |  |  | 3,776 |  |  | 5,159 |  |  | 76 |  |  | 2018 |  | 40.0
Atlanta, Georgia | ENT073 | — |  |  | (1) |  | 510 |  |  | 660 |  |  | (11 | ) |  | 510 |  |  | 649 |  |  | 1,159 |  |  | 235 |  |  | 2004 |  | 40.0
Conyers, Georgia | ENT074 | — |  |  | (1) |  | 474 |  |  | 613 |  |  | (37 | ) |  | 474 |  |  | 576 |  |  | 1,050 |  |  | 201 |  |  | 2004 |  | 40.0
Kennesaw, Georgia | ENT075 | 4,706 |  |  |  |  | 2,098 |  |  | 5,113 |  |  | (1 | ) |  | 2,098 |  |  | 5,112 |  |  | 7,210 |  |  | 100 |  |  | 2018 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Lawrenceville, Georgia | ENT076 | 1,482 |  |  |  |  | 911 |  |  | 1,285 |  |  | — |  |  | 911 |  |  | 1,285 |  |  | 2,196 |  |  | 32 |  |  | 2018 |  | 40.0
Marietta, Georgia | ENT077 | — |  |  | (1) |  | 581 |  |  | 752 |  |  | (46 | ) |  | 581 |  |  | 706 |  |  | 1,287 |  |  | 246 |  |  | 2004 |  | 40.0
Marietta, Georgia | ENT078 | 2,144 |  |  |  |  | 1,180 |  |  | 1,436 |  |  | — |  |  | 1,180 |  |  | 1,436 |  |  | 2,616 |  |  | 34 |  |  | 2018 |  | 40.0
Marietta, Georgia | ENT079 | 1,275 |  |  |  |  | 715 |  |  | 760 |  |  | — |  |  | 715 |  |  | 760 |  |  | 1,475 |  |  | 22 |  |  | 2018 |  | 40.0
Norcross, Georgia | ENT080 | 2,396 |  |  |  |  | 1,110 |  |  | 380 |  |  | — |  |  | 1,110 |  |  | 380 |  |  | 1,490 |  |  | 20 |  |  | 2018 |  | 40.0
Roswell, Georgia | ENT081 | 2,122 |  |  |  |  | 893 |  |  | 311 |  |  | 1 |  |  | 893 |  |  | 312 |  |  | 1,205 |  |  | 11 |  |  | 2018 |  | 40.0
Savannah, Georgia | ENT082 | — |  |  | (1) |  | 718 |  |  | 930 |  |  | (15 | ) |  | 718 |  |  | 915 |  |  | 1,633 |  |  | 332 |  |  | 2004 |  | 40.0
Woodstock, Georgia | ENT083 | — |  |  | (1) |  | 502 |  |  | 651 |  |  | (11 | ) |  | 502 |  |  | 640 |  |  | 1,142 |  |  | 232 |  |  | 2004 |  | 40.0
Algonquin, Illinois | ENT084 | 3,137 |  |  |  |  | 1,312 |  |  | 4,041 |  |  | — |  |  | 1,312 |  |  | 4,041 |  |  | 5,353 |  |  | 105 |  |  | 2018 |  | 40.0
Buffalo Grove, Illinois | ENT085 | 1,707 |  |  |  |  | 861 |  |  | 3,945 |  |  | — |  |  | 861 |  |  | 3,945 |  |  | 4,806 |  |  | 79 |  |  | 2018 |  | 40.0
Chicago, Illinois | ENT086 | — |  |  | (1) |  | 8,803 |  |  | 57 |  |  | 30,479 |  |  | 8,803 |  |  | 30,536 |  |  | 39,339 |  |  | 8,639 |  |  | 2006 |  | 40.0
Glendale Heights, Illinois | ENT087 | 1,102 |  |  |  |  | 455 |  |  | 819 |  |  | 1 |  |  | 455 |  |  | 820 |  |  | 1,275 |  |  | 16 |  |  | 2018 |  | 40.0
Lake Zurich, Illinois | ENT088 | 1,221 |  |  |  |  | 924 |  |  | 238 |  |  | 1 |  |  | 924 |  |  | 239 |  |  | 1,163 |  |  | 32 |  |  | 2018 |  | 40.0
Lyons, Illinois | ENT089 | — |  |  | (1) |  | 433 |  |  | 560 |  |  | (10 | ) |  | 433 |  |  | 550 |  |  | 983 |  |  | 200 |  |  | 2004 |  | 40.0
Mount Prospect, Illinois | ENT090 | 1,247 |  |  |  |  | 704 |  |  | 956 |  |  | (1 | ) |  | 704 |  |  | 955 |  |  | 1,659 |  |  | 22 |  |  | 2018 |  | 40.0
Naperville, Illinois | ENT091 | — |  |  | (1) |  | 1,798 |  |  | 2,894 |  |  | 530 |  |  | 1,798 |  |  | 3,424 |  |  | 5,222 |  |  | 1,060 |  |  | 2017 |  | 40.0
Romeoville, Illinois | ENT092 | 3,004 |  |  |  |  | 2,254 |  |  | 3,251 |  |  | — |  |  | 2,254 |  |  | 3,251 |  |  | 5,505 |  |  | 96 |  |  | 2018 |  | 40.0
Roselle, Illinois | ENT093 | 1,111 |  |  |  |  | 730 |  |  | 682 |  |  | — |  |  | 730 |  |  | 682 |  |  | 1,412 |  |  | 24 |  |  | 2018 |  | 40.0
River Grove, Illinois | ENT094 | 1,805 |  |  |  |  | 1,754 |  |  | 3,289 |  |  | (1 | ) |  | 1,754 |  |  | 3,288 |  |  | 5,042 |  |  | 79 |  |  | 2018 |  | 40.0
Springfield, Illinois | ENT095 | — |  |  | (1) |  | 431 |  |  | 557 |  |  | (9 | ) |  | 431 |  |  | 548 |  |  | 979 |  |  | 199 |  |  | 2004 |  | 40.0
Vernon Hills, Illinois | ENT096 | 995 |  |  |  |  | 600 |  |  | 666 |  |  | — |  |  | 600 |  |  | 666 |  |  | 1,266 |  |  | 21 |  |  | 2018 |  | 40.0
Waukegan, Illinois | ENT097 | 633 |  |  |  |  | 342 |  |  | 670 |  |  | — |  |  | 342 |  |  | 670 |  |  | 1,012 |  |  | 17 |  |  | 2018 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Woodridge, Illinois | ENT098 | 1,191 |  |  |  |  | 829 |  |  | 1,597 |  |  | (1 | ) |  | 829 |  |  | 1,596 |  |  | 2,425 |  |  | 40 |  |  | 2018 |  | 40.0
Evansville, Indiana | ENT099 | — |  |  | (1) |  | 542 |  |  | 701 |  |  | (11 | ) |  | 542 |  |  | 690 |  |  | 1,232 |  |  | 250 |  |  | 2004 |  | 40.0
Baltimore, Maryland | ENT100 | — |  |  | (1) |  | 428 |  |  | 554 |  |  | (34 | ) |  | 428 |  |  | 520 |  |  | 948 |  |  | 181 |  |  | 2004 |  | 40.0
Baltimore, Maryland | ENT101 | — |  |  | (1) |  | 575 |  |  | 745 |  |  | (45 | ) |  | 575 |  |  | 700 |  |  | 1,275 |  |  | 244 |  |  | 2004 |  | 40.0
Baltimore, Maryland | ENT102 | — |  |  | (1) |  | 362 |  |  | 468 |  |  | (7 | ) |  | 362 |  |  | 461 |  |  | 823 |  |  | 167 |  |  | 2004 |  | 40.0
Columbia, Maryland | ENT103 | 1,735 |  |  |  |  | 1,762 |  |  | 1,300 |  |  | — |  |  | 1,762 |  |  | 1,300 |  |  | 3,062 |  |  | 41 |  |  | 2018 |  | 40.0
Ellicott City, Maryland | ENT104 | 1,349 |  |  |  |  | 889 |  |  | 1,632 |  |  | 1 |  |  | 889 |  |  | 1,633 |  |  | 2,522 |  |  | 32 |  |  | 2018 |  | 40.0
Gaithersburg, Maryland | ENT105 | — |  |  | (1) |  | 884 |  |  | 1,145 |  |  | (19 | ) |  | 884 |  |  | 1,126 |  |  | 2,010 |  |  | 408 |  |  | 2004 |  | 40.0
Hyattsville, Maryland | ENT106 | — |  |  | (1) |  | 399 |  |  | 518 |  |  | (9 | ) |  | 399 |  |  | 509 |  |  | 908 |  |  | 184 |  |  | 2004 |  | 40.0
Laurel, Maryland | ENT107 | — |  |  | (1) |  | 649 |  |  | 839 |  |  | (14 | ) |  | 649 |  |  | 825 |  |  | 1,474 |  |  | 299 |  |  | 2004 |  | 40.0
Linthicum, Maryland | ENT108 | — |  |  | (1) |  | 366 |  |  | 473 |  |  | (7 | ) |  | 366 |  |  | 466 |  |  | 832 |  |  | 169 |  |  | 2004 |  | 40.0
Pikesville, Maryland | ENT109 | — |  |  | (1) |  | 398 |  |  | 516 |  |  | (8 | ) |  | 398 |  |  | 508 |  |  | 906 |  |  | 184 |  |  | 2004 |  | 40.0
Timonium, Maryland | ENT110 | — |  |  | (1) |  | 1,126 |  |  | 1,458 |  |  | (88 | ) |  | 1,126 |  |  | 1,370 |  |  | 2,496 |  |  | 478 |  |  | 2004 |  | 40.0
Towson, Maryland | ENT111 | — |  |  | (1) |  | 642 |  |  | 788 |  |  | 454 |  |  | 642 |  |  | 1,242 |  |  | 1,884 |  |  | 361 |  |  | 2017 |  | 40.0
Auburn, Massachusetts | ENT112 | — |  |  | (1) |  | 523 |  |  | 678 |  |  | (12 | ) |  | 523 |  |  | 666 |  |  | 1,189 |  |  | 241 |  |  | 2004 |  | 40.0
Chicopee, Massachusetts | ENT113 | — |  |  | (1) |  | 548 |  |  | 711 |  |  | (43 | ) |  | 548 |  |  | 668 |  |  | 1,216 |  |  | 233 |  |  | 2004 |  | 40.0
Somerset, Massachusetts | ENT114 | — |  |  | (1) |  | 519 |  |  | 672 |  |  | (11 | ) |  | 519 |  |  | 661 |  |  | 1,180 |  |  | 240 |  |  | 2004 |  | 40.0
Grand Rapids, Michigan | ENT115 | — |  |  | (1) |  | 554 |  |  | 718 |  |  | (43 | ) |  | 554 |  |  | 675 |  |  | 1,229 |  |  | 235 |  |  | 2004 |  | 40.0
Grand Rapids, Michigan | ENT116 | — |  |  | (1) |  | 860 |  |  | 543 |  |  | 670 |  |  | 860 |  |  | 1,213 |  |  | 2,073 |  |  | 397 |  |  | 2017 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Roseville, Michigan | ENT117 | — |  |  | (1) |  | 533 |  |  | 691 |  |  | (12 | ) |  | 533 |  |  | 679 |  |  | 1,212 |  |  | 246 |  |  | 2004 |  | 40.0
Blaine, Minnesota | ENT118 | 2,667 |  |  |  |  | 1,801 |  |  | 2,814 |  |  | (1 | ) |  | 1,801 |  |  | 2,813 |  |  | 4,614 |  |  | 83 |  |  | 2018 |  | 40.0
Brooklyn Park, Minnesota | ENT119 | 2,659 |  |  |  |  | 1,455 |  |  | 2,036 |  |  | — |  |  | 1,455 |  |  | 2,036 |  |  | 3,491 |  |  | 60 |  |  | 2018 |  | 40.0
Burnsville, Minnesota | ENT120 | — |  |  | (1) |  | 2,962 |  |  | — |  |  | 17,164 |  |  | 2,962 |  |  | 17,164 |  |  | 20,126 |  |  | 5,652 |  |  | 2006 |  | 40.0
Eden Prairie, Minnesota | ENT121 | 2,717 |  |  |  |  | 1,496 |  |  | 2,117 |  |  | (1 | ) |  | 1,496 |  |  | 2,116 |  |  | 3,612 |  |  | 55 |  |  | 2018 |  | 40.0
Lakeville, Minnesota | ENT122 | 2,719 |  |  |  |  | 1,910 |  |  | 3,373 |  |  | — |  |  | 1,910 |  |  | 3,373 |  |  | 5,283 |  |  | 77 |  |  | 2018 |  | 40.0
Rochester, Minnesota | ENT123 | — |  |  | (1) |  | 2,437 |  |  | 8,715 |  |  | 2,098 |  |  | 2,437 |  |  | 10,813 |  |  | 13,250 |  |  | 3,989 |  |  | 2006 |  | 40.0
Columbia, Missouri | ENT124 | — |  |  | (1) |  | 334 |  |  | 432 |  |  | (26 | ) |  | 334 |  |  | 406 |  |  | 740 |  |  | 142 |  |  | 2004 |  | 40.0
North Kansas City, Missouri | ENT125 | — |  |  | (1) |  | 878 |  |  | 1,139 |  |  | (69 | ) |  | 878 |  |  | 1,070 |  |  | 1,948 |  |  | 373 |  |  | 2004 |  | 40.0
St. Peters, Missouri | ENT126 | 2,958 |  |  |  |  | 1,936 |  |  | 3,381 |  |  | — |  |  | 1,936 |  |  | 3,381 |  |  | 5,317 |  |  | 76 |  |  | 2018 |  | 40.0
Valley Park, Missouri | ENT127 | 1,391 |  |  |  |  | 803 |  |  | 1,408 |  |  | — |  |  | 803 |  |  | 1,408 |  |  | 2,211 |  |  | 31 |  |  | 2018 |  | 40.0
Asbury Park, New Jersey | ENT128 | — |  |  |  |  | 750 |  |  | 10,670 |  |  | 230 |  |  | 750 |  |  | 10,900 |  |  | 11,650 |  |  | 201 |  |  | 2017 |  | 40.0
Aberdeen, New Jersey | ENT129 | — |  |  | (1) |  | 1,560 |  |  | 2,019 |  |  | (33 | ) |  | 1,560 |  |  | 1,986 |  |  | 3,546 |  |  | 720 |  |  | 2004 |  | 40.0
Fairlawn, New Jersey | ENT130 | 1,618 |  |  |  |  | 1,141 |  |  | 2,094 |  |  | — |  |  | 1,141 |  |  | 2,094 |  |  | 3,235 |  |  | 41 |  |  | 2018 |  | 40.0
Turnersville, New Jersey | ENT131 | 1,483 |  |  |  |  | 1,354 |  |  | 1,314 |  |  | — |  |  | 1,354 |  |  | 1,314 |  |  | 2,668 |  |  | 50 |  |  | 2018 |  | 40.0
Wallington, New Jersey | ENT132 | — |  |  | (1) |  | 830 |  |  | 1,075 |  |  | (65 | ) |  | 830 |  |  | 1,010 |  |  | 1,840 |  |  | 352 |  |  | 2004 |  | 40.0
Brooklyn, New York | ENT133 | — |  |  |  |  | 3,277 |  |  | — |  |  | (248 | ) |  | 587 |  |  | 2,442 |  |  | 3,029 |  |  | — |  |  | 2013 |  | 40.0
Centereach, New York | ENT134 | — |  |  | (1) |  | 442 |  |  | 571 |  |  | (34 | ) |  | 442 |  |  | 537 |  |  | 979 |  |  | 187 |  |  | 2004 |  | 40.0
Cheektowaga, New York | ENT135 | — |  |  | (1) |  | 385 |  |  | 499 |  |  | (8 | ) |  | 385 |  |  | 491 |  |  | 876 |  |  | 178 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Dewpew, New York | ENT136 | — |  |  | (1) |  | 350 |  |  | 453 |  |  | (28 | ) |  | 350 |  |  | 425 |  |  | 775 |  |  | 148 |  |  | 2004 |  | 40.0
Melville, New York | ENT137 | — |  |  | (1) |  | 494 |  |  | 640 |  |  | (39 | ) |  | 494 |  |  | 601 |  |  | 1,095 |  |  | 210 |  |  | 2004 |  | 40.0
Rochester, New York | ENT138 | — |  |  | (1) |  | 326 |  |  | 421 |  |  | (25 | ) |  | 326 |  |  | 396 |  |  | 722 |  |  | 138 |  |  | 2004 |  | 40.0
Rochester, New York | ENT139 | — |  |  | (1) |  | 320 |  |  | 414 |  |  | (7 | ) |  | 320 |  |  | 407 |  |  | 727 |  |  | 148 |  |  | 2004 |  | 40.0
Rochester, New York | ENT140 | — |  |  | (1) |  | 399 |  |  | 516 |  |  | (8 | ) |  | 399 |  |  | 508 |  |  | 907 |  |  | 184 |  |  | 2004 |  | 40.0
Sayville, New York | ENT141 | — |  |  | (1) |  | 959 |  |  | 1,240 |  |  | (20 | ) |  | 959 |  |  | 1,220 |  |  | 2,179 |  |  | 442 |  |  | 2004 |  | 40.0
Shirley, New York | ENT142 | — |  |  | (1) |  | 587 |  |  | 761 |  |  | (46 | ) |  | 587 |  |  | 715 |  |  | 1,302 |  |  | 249 |  |  | 2004 |  | 40.0
Smithtown, New York | ENT143 | — |  |  | (1) |  | 521 |  |  | 675 |  |  | (11 | ) |  | 521 |  |  | 664 |  |  | 1,185 |  |  | 241 |  |  | 2004 |  | 40.0
Syosset, New York | ENT144 | — |  |  | (1) |  | 711 |  |  | 920 |  |  | (56 | ) |  | 711 |  |  | 864 |  |  | 1,575 |  |  | 301 |  |  | 2004 |  | 40.0
Syracuse, New York | ENT145 | — |  |  | (1) |  | 558 |  |  | 723 |  |  | (12 | ) |  | 558 |  |  | 711 |  |  | 1,269 |  |  | 258 |  |  | 2004 |  | 40.0
Wantagh, New York | ENT146 | — |  |  | (1) |  | 747 |  |  | 967 |  |  | (58 | ) |  | 747 |  |  | 909 |  |  | 1,656 |  |  | 317 |  |  | 2004 |  | 40.0
Webster, New York | ENT147 | — |  |  | (1) |  | 683 |  |  | 885 |  |  | (15 | ) |  | 683 |  |  | 870 |  |  | 1,553 |  |  | 315 |  |  | 2004 |  | 40.0
West Babylon, New York | ENT148 | — |  |  | (1) |  | 1,492 |  |  | 1,933 |  |  | (117 | ) |  | 1,492 |  |  | 1,816 |  |  | 3,308 |  |  | 633 |  |  | 2004 |  | 40.0
White Plains, New York | ENT149 | — |  |  | (1) |  | 1,471 |  |  | 1,904 |  |  | (31 | ) |  | 1,471 |  |  | 1,873 |  |  | 3,344 |  |  | 679 |  |  | 2004 |  | 40.0
Asheville, North Carolina | ENT150 | — |  |  | (1) |  | 397 |  |  | 513 |  |  | (31 | ) |  | 397 |  |  | 482 |  |  | 879 |  |  | 168 |  |  | 2004 |  | 40.0
Cary, North Carolina | ENT151 | — |  |  | (1) |  | 476 |  |  | 615 |  |  | (10 | ) |  | 476 |  |  | 605 |  |  | 1,081 |  |  | 220 |  |  | 2004 |  | 40.0
Charlotte, North Carolina | ENT152 | — |  |  | (1) |  | 410 |  |  | 530 |  |  | (8 | ) |  | 410 |  |  | 522 |  |  | 932 |  |  | 189 |  |  | 2004 |  | 40.0
Charlotte, North Carolina | ENT153 | — |  |  | (1) |  | 402 |  |  | 520 |  |  | (9 | ) |  | 402 |  |  | 511 |  |  | 913 |  |  | 185 |  |  | 2004 |  | 40.0
Durham, North Carolina | ENT154 | — |  |  | (1) |  | 948 |  |  | 1,227 |  |  | (75 | ) |  | 948 |  |  | 1,152 |  |  | 2,100 |  |  | 402 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Goldsboro, North Carolina | ENT155 | — |  |  | (1) |  | 259 |  |  | 336 |  |  | (6 | ) |  | 259 |  |  | 330 |  |  | 589 |  |  | 120 |  |  | 2004 |  | 40.0
Greensboro, North Carolina | ENT156 | — |  |  | (1) |  | 349 |  |  | 452 |  |  | (28 | ) |  | 349 |  |  | 424 |  |  | 773 |  |  | 148 |  |  | 2004 |  | 40.0
Greenville, North Carolina | ENT157 | — |  |  | (1) |  | 640 |  |  | 828 |  |  | (50 | ) |  | 640 |  |  | 778 |  |  | 1,418 |  |  | 271 |  |  | 2004 |  | 40.0
Hickory, North Carolina | ENT158 | — |  |  | (1) |  | 409 |  |  | 531 |  |  | (32 | ) |  | 409 |  |  | 499 |  |  | 908 |  |  | 174 |  |  | 2004 |  | 40.0
Matthews, North Carolina | ENT159 | — |  |  | (1) |  | 965 |  |  | 1,249 |  |  | (21 | ) |  | 965 |  |  | 1,228 |  |  | 2,193 |  |  | 445 |  |  | 2004 |  | 40.0
Raleigh, North Carolina | ENT160 | — |  |  | (1) |  | 475 |  |  | 615 |  |  | (37 | ) |  | 475 |  |  | 578 |  |  | 1,053 |  |  | 201 |  |  | 2004 |  | 40.0
Winston-Salem, North Carolina | ENT161 | — |  |  | (1) |  | 494 |  |  | 638 |  |  | (10 | ) |  | 494 |  |  | 628 |  |  | 1,122 |  |  | 228 |  |  | 2004 |  | 40.0
Canton, Ohio | ENT162 | — |  |  | (1) |  | 434 |  |  | 562 |  |  | (34 | ) |  | 434 |  |  | 528 |  |  | 962 |  |  | 184 |  |  | 2004 |  | 40.0
Columbus, Ohio | ENT163 | — |  |  | (1) |  | 967 |  |  | 1,252 |  |  | (20 | ) |  | 967 |  |  | 1,232 |  |  | 2,199 |  |  | 446 |  |  | 2004 |  | 40.0
Grove City, Ohio | ENT164 | — |  |  | (1) |  | 281 |  |  | 365 |  |  | (6 | ) |  | 281 |  |  | 359 |  |  | 640 |  |  | 130 |  |  | 2004 |  | 40.0
Medina, Ohio | ENT165 | — |  |  | (1) |  | 393 |  |  | 508 |  |  | (30 | ) |  | 393 |  |  | 478 |  |  | 871 |  |  | 167 |  |  | 2004 |  | 40.0
N. Ridgeville, Ohio | ENT166 | 967 |  |  |  |  | 290 |  |  | 1,057 |  |  | — |  |  | 290 |  |  | 1,057 |  |  | 1,347 |  |  | 16 |  |  | 2018 |  | 40.0
Edmond, Oklahoma | ENT167 | — |  |  | (1) |  | 431 |  |  | 557 |  |  | (9 | ) |  | 431 |  |  | 548 |  |  | 979 |  |  | 199 |  |  | 2004 |  | 40.0
Tulsa, Oklahoma | ENT168 | — |  |  | (1) |  | 954 |  |  | 1,235 |  |  | (75 | ) |  | 954 |  |  | 1,160 |  |  | 2,114 |  |  | 405 |  |  | 2004 |  | 40.0
Salem, Oregon | ENT169 | — |  |  | (1) |  | 393 |  |  | 508 |  |  | (8 | ) |  | 393 |  |  | 500 |  |  | 893 |  |  | 181 |  |  | 2004 |  | 40.0
Belle Vernon, Pennsylvania | ENT170 | 840 |  |  |  |  | 410 |  |  | 759 |  |  | — |  |  | 410 |  |  | 759 |  |  | 1,169 |  |  | 23 |  |  | 2018 |  | 40.0
Boothwyn, Pennsylvania | ENT171 | — |  |  | (1) |  | 407 |  |  | 527 |  |  | (32 | ) |  | 407 |  |  | 495 |  |  | 902 |  |  | 173 |  |  | 2004 |  | 40.0
Croydon, Pennsylvania | ENT172 | — |  |  | (1) |  | 421 |  |  | 544 |  |  | (33 | ) |  | 421 |  |  | 511 |  |  | 932 |  |  | 178 |  |  | 2004 |  | 40.0
Feasterville, Pennsylvania | ENT173 | — |  |  | (1) |  | 2,340 |  |  | 2,824 |  |  | 211 |  |  | 2,340 |  |  | 3,035 |  |  | 5,375 |  |  | 1,029 |  |  | 2017 |  | 40.0
Pittsburgh, Pennsylvania | ENT174 | — |  |  | (1) |  | 409 |  |  | 528 |  |  | (8 | ) |  | 409 |  |  | 520 |  |  | 929 |  |  | 189 |  |  | 2004 |  | 40.0
Pittsburgh, Pennsylvania | ENT175 | — |  |  | (1) |  | 407 |  |  | 527 |  |  | (8 | ) |  | 407 |  |  | 519 |  |  | 926 |  |  | 188 |  |  | 2004 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
San Juan, Puerto Rico | ENT176 | — |  |  | (1) |  | 950 |  |  | 1,230 |  |  | (74 | ) |  | 950 |  |  | 1,156 |  |  | 2,106 |  |  | 403 |  |  | 2004 |  | 40.0
Cranston, Rhode Island | ENT177 | — |  |  | (1) |  | 850 |  |  | 1,100 |  |  | (18 | ) |  | 850 |  |  | 1,082 |  |  | 1,932 |  |  | 392 |  |  | 2004 |  | 40.0
Greenville, South Carolina | ENT178 | — |  |  | (1) |  | 332 |  |  | 429 |  |  | (26 | ) |  | 332 |  |  | 403 |  |  | 735 |  |  | 141 |  |  | 2004 |  | 40.0
Addison, Texas | ENT179 | — |  |  | (1) |  | 1,045 |  |  | 1,353 |  |  | (82 | ) |  | 1,045 |  |  | 1,271 |  |  | 2,316 |  |  | 443 |  |  | 2004 |  | 40.0
Arlington, Texas | ENT180 | — |  |  | (1) |  | 593 |  |  | 767 |  |  | (13 | ) |  | 593 |  |  | 754 |  |  | 1,347 |  |  | 273 |  |  | 2004 |  | 40.0
Conroe, Texas | ENT181 | — |  |  | (1) |  | 838 |  |  | 1,083 |  |  | (17 | ) |  | 838 |  |  | 1,066 |  |  | 1,904 |  |  | 387 |  |  | 2004 |  | 40.0
Corpus Christi, Texas | ENT182 | — |  |  | (1) |  | 528 |  |  | 682 |  |  | (11 | ) |  | 528 |  |  | 671 |  |  | 1,199 |  |  | 243 |  |  | 2004 |  | 40.0
Denton, Texas | ENT183 | 1,191 |  |  |  |  | 712 |  |  | 763 |  |  | — |  |  | 712 |  |  | 763 |  |  | 1,475 |  |  | 19 |  |  | 2018 |  | 40.0
Desota, Texas | ENT184 | — |  |  | (1) |  | 480 |  |  | 622 |  |  | (10 | ) |  | 480 |  |  | 612 |  |  | 1,092 |  |  | 222 |  |  | 2004 |  | 40.0
Euless, Texas | ENT185 | — |  |  | (1) |  | 975 |  |  | 1,261 |  |  | (21 | ) |  | 975 |  |  | 1,240 |  |  | 2,215 |  |  | 450 |  |  | 2004 |  | 40.0
Ft. Worth, Texas | ENT186 | 972 |  |  |  |  | 379 |  |  | 266 |  |  | — |  |  | 379 |  |  | 266 |  |  | 645 |  |  | 10 |  |  | 2018 |  | 40.0
Garland, Texas | ENT187 | — |  |  | (1) |  | 1,108 |  |  | 1,433 |  |  | (23 | ) |  | 1,108 |  |  | 1,410 |  |  | 2,518 |  |  | 511 |  |  | 2004 |  | 40.0
Houston, Texas | ENT188 | — |  |  | (1) |  | 425 |  |  | 549 |  |  | (89 | ) |  | 425 |  |  | 460 |  |  | 885 |  |  | 169 |  |  | 2004 |  | 40.0
Houston, Texas | ENT189 | — |  |  | (1) |  | 518 |  |  | 671 |  |  | (40 | ) |  | 518 |  |  | 631 |  |  | 1,149 |  |  | 220 |  |  | 2004 |  | 40.0
Houston, Texas | ENT190 | — |  |  | (1) |  | 758 |  |  | 981 |  |  | (59 | ) |  | 758 |  |  | 922 |  |  | 1,680 |  |  | 322 |  |  | 2004 |  | 40.0
Houston, Texas | ENT191 | — |  |  | (1) |  | 375 |  |  | 485 |  |  | (8 | ) |  | 375 |  |  | 477 |  |  | 852 |  |  | 173 |  |  | 2004 |  | 40.0
Humble, Texas | ENT192 | — |  |  | (1) |  | 438 |  |  | 567 |  |  | (9 | ) |  | 438 |  |  | 558 |  |  | 996 |  |  | 202 |  |  | 2004 |  | 40.0
Lewisville, Texas | ENT193 | — |  |  | (1) |  | 561 |  |  | 726 |  |  | (44 | ) |  | 561 |  |  | 682 |  |  | 1,243 |  |  | 238 |  |  | 2004 |  | 40.0
Midland, Texas | ENT194 | — |  |  | (1) |  | 2,360 |  |  | 1,082 |  |  | 2,023 |  |  | 2,360 |  |  | 3,105 |  |  | 5,465 |  |  | 1,046 |  |  | 2017 |  | 40.0
Richardson, Texas | ENT195 | — |  |  | (1) |  | 753 |  |  | 976 |  |  | (59 | ) |  | 753 |  |  | 917 |  |  | 1,670 |  |  | 320 |  |  | 2004 |  | 40.0
San Antonio, Texas | ENT196 | — |  |  | (1) |  | 521 |  |  | 675 |  |  | (41 | ) |  | 521 |  |  | 634 |  |  | 1,155 |  |  | 221 |  |  | 2004 |  | 40.0
Stafford, Texas | ENT197 | — |  |  | (1) |  | 634 |  |  | 821 |  |  | (13 | ) |  | 634 |  |  | 808 |  |  | 1,442 |  |  | 293 |  |  | 2004 |  | 40.0
Waco, Texas | ENT198 | — |  |  | (1) |  | 379 |  |  | 491 |  |  | (8 | ) |  | 379 |  |  | 483 |  |  | 862 |  |  | 175 |  |  | 2004 |  | 40.0
Watauga, Texas | ENT199 | 2,164 |  |  |  |  | 1,073 |  |  | 2,274 |  |  | — |  |  | 1,073 |  |  | 2,274 |  |  | 3,347 |  |  | 48 |  |  | 2018 |  | 40.0
Webster, Texas | ENT200 | — |  |  | (1) |  | 592 |  |  | 766 |  |  | (46 | ) |  | 592 |  |  | 720 |  |  | 1,312 |  |  | 251 |  |  | 2004 |  | 40.0
Annandale, Virginia | ENT201 | — |  |  | (1) |  | 3,767 |  |  | 7,075 |  |  | — |  |  | 3,767 |  |  | 7,075 |  |  | 10,842 |  |  | 20 |  |  | 2018 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Centreville, Virginia | ENT202 | — |  |  | (1) |  | 1,134 |  |  | 1,467 |  |  | (89 | ) |  | 1,134 |  |  | 1,378 |  |  | 2,512 |  |  | 481 |  |  | 2004 |  | 40.0
Chesapeake, Virginia | ENT203 | — |  |  | (1) |  | 845 |  |  | 1,094 |  |  | (66 | ) |  | 845 |  |  | 1,028 |  |  | 1,873 |  |  | 358 |  |  | 2004 |  | 40.0
Chesapeake, Virginia | ENT204 | — |  |  | (1) |  | 884 |  |  | 1,145 |  |  | (19 | ) |  | 884 |  |  | 1,126 |  |  | 2,010 |  |  | 408 |  |  | 2004 |  | 40.0
Fredericksburg, Virginia | ENT205 | — |  |  | (1) |  | 953 |  |  | 1,233 |  |  | (21 | ) |  | 953 |  |  | 1,212 |  |  | 2,165 |  |  | 440 |  |  | 2004 |  | 40.0
Grafton, Virginia | ENT206 | — |  |  | (1) |  | 487 |  |  | 632 |  |  | (39 | ) |  | 487 |  |  | 593 |  |  | 1,080 |  |  | 207 |  |  | 2004 |  | 40.0
Lynchburg, Virginia | ENT207 | — |  |  | (1) |  | 425 |  |  | 550 |  |  | (9 | ) |  | 425 |  |  | 541 |  |  | 966 |  |  | 196 |  |  | 2004 |  | 40.0
Mechanicsville, Virginia | ENT208 | — |  |  | (1) |  | 1,151 |  |  | 1,490 |  |  | (24 | ) |  | 1,151 |  |  | 1,466 |  |  | 2,617 |  |  | 531 |  |  | 2004 |  | 40.0
Norfolk, Virginia | ENT209 | — |  |  | (1) |  | 546 |  |  | 707 |  |  | (42 | ) |  | 546 |  |  | 665 |  |  | 1,211 |  |  | 232 |  |  | 2004 |  | 40.0
Richmond, Virginia | ENT210 | — |  |  | (1) |  | 819 |  |  | 1,061 |  |  | (64 | ) |  | 819 |  |  | 997 |  |  | 1,816 |  |  | 348 |  |  | 2004 |  | 40.0
Richmond, Virginia | ENT211 | — |  |  | (1) |  | 958 |  |  | 1,240 |  |  | (75 | ) |  | 958 |  |  | 1,165 |  |  | 2,123 |  |  | 406 |  |  | 2004 |  | 40.0
Virginia Beach, Virginia | ENT212 | — |  |  | (1) |  | 788 |  |  | 1,020 |  |  | (17 | ) |  | 788 |  |  | 1,003 |  |  | 1,791 |  |  | 364 |  |  | 2004 |  | 40.0
Williamsburg, Virginia | ENT213 | — |  |  | (1) |  | 554 |  |  | 716 |  |  | (12 | ) |  | 554 |  |  | 704 |  |  | 1,258 |  |  | 255 |  |  | 2004 |  | 40.0
Lynnwood, Washington | ENT214 | 2,173 |  |  |  |  | 1,608 |  |  | 4,010 |  |  | — |  |  | 1,608 |  |  | 4,010 |  |  | 5,618 |  |  | 90 |  |  | 2018 |  | 40.0
Quincy, Washington | ENT215 | — |  |  | (1) |  | 1,500 |  |  | 6,500 |  |  | — |  |  | 1,500 |  |  | 6,500 |  |  | 8,000 |  |  | 2,869 |  |  | 2003 |  | 40.0
Milwaukee, Wisconsin | ENT216 | — |  |  | (1) |  | 521 |  |  | 673 |  |  | (39 | ) |  | 521 |  |  | 634 |  |  | 1,155 |  |  | 221 |  |  | 2004 |  | 40.0
Wauwatosa, Wisconsin | ENT217 | — |  |  | (1) |  | 793 |  |  | 1,025 |  |  | (17 | ) |  | 793 |  |  | 1,008 |  |  | 1,801 |  |  | 366 |  |  | 2004 |  | 40.0
Subtotal |  | $ | 110,854 |  |  |  |  | $ | 195,834 |  |  | $ | 372,225 |  |  | $ | 92,220 |  |  | $ | 193,127 |  |  | $ | 467,152 |  |  | $ | 660,279 |  |  | $ | 119,483 |  |  |  |  |
RETAIL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Scottsdale, Arizona | RET001 | — |  |  |  |  | 2,625 |  |  | 4,875 |  |  | 2,825 |  |  | 2,625 |  |  | 7,700 |  |  | 10,325 |  |  | 2,141 |  |  | 2009 |  | 40.0
Scottsdale, Arizona | RET002 | — |  |  |  |  | 2,657 |  |  | 2,666 |  |  | (106 | ) |  | 2,657 |  |  | 2,560 |  |  | 5,217 |  |  | 657 |  |  | 2011 |  | 40.0

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Colorado Springs, Colorado | RET003 | — |  |  | (1) |  | 2,631 |  |  | 279 |  |  | 5,195 |  |  | 2,607 |  |  | 5,498 |  |  | 8,105 |  |  | 1,582 |  |  | 2006 |  | 40.0
St. Augustine, Florida | RET004 | — |  |  | (1) |  | 3,950 |  |  | — |  |  | 10,285 |  |  | 3,908 |  |  | 10,327 |  |  | 14,235 |  |  | 3,152 |  |  | 2005 |  | 40.0
Honolulu, Hawaii | RET005 | — |  |  |  |  | 3,393 |  |  | 21,155 |  |  | (8,671 | ) |  | 3,393 |  |  | 12,484 |  |  | 15,877 |  |  | 3,726 |  |  | 2009 |  | 40.0
Chicago, Illinois | RET006 | — |  |  |  |  | 14,934 |  |  | 29,675 |  |  | (26,366 | ) |  | 5,126 |  |  | 13,117 |  |  | 18,243 |  |  | — |  |  | 2012 |  | 40.0
Chicago, Illinois | RET007 | — |  |  | (1) |  | — |  |  | 336 |  |  | 1,601 |  |  | — |  |  | 1,937 |  |  | 1,937 |  |  | 1,087 |  |  | 2010 |  | 40.0
Albuquerque, New Mexico | RET008 | — |  |  | (1) |  | 1,733 |  |  | — |  |  | 8,728 |  |  | 1,705 |  |  | 8,756 |  |  | 10,461 |  |  | 2,799 |  |  | 2005 |  | 40.0
Hamburg, New York | RET009 | — |  |  | (1) |  | 731 |  |  | 6,073 |  |  | 699 |  |  | 711 |  |  | 6,792 |  |  | 7,503 |  |  | 2,474 |  |  | 2005 |  | 40.0
Anthony, Texas | RET010 | — |  |  | (1) |  | 3,538 |  |  | 4,215 |  |  | (187 | ) |  | 3,514 |  |  | 4,052 |  |  | 7,566 |  |  | 1,288 |  |  | 2005 |  | 40.0
Draper, Utah | RET011 | — |  |  | (1) |  | 3,502 |  |  | — |  |  | 5,975 |  |  | 3,502 |  |  | 5,975 |  |  | 9,477 |  |  | 1,804 |  |  | 2005 |  | 40.0
Subtotal |  | $ | — |  |  |  |  | $ | 39,694 |  |  | $ | 69,274 |  |  | $ | (22 | ) |  | $ | 29,748 |  |  | $ | 79,198 |  |  | $ | 108,946 |  |  | $ | 20,710 |  |  |  |  |
HOTEL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Honolulu, Hawaii | HOT001 | — |  |  |  |  | 17,996 |  |  | 17,996 |  |  | (31,160 | ) |  | 3,419 |  |  | 1,413 |  |  | 4,832 |  |  | 4,531 |  |  | 2009 |  | 40.0
Asbury Park, New Jersey | HOT002 | — |  |  |  |  | 3,815 |  |  | 40,194 |  |  | 3,459 |  |  | 3,815 |  |  | 43,653 |  |  | 47,468 |  |  | 4,594 |  |  | 2016 |  | 40.0
Subtotal |  | $ | — |  |  |  |  | $ | 21,811 |  |  | $ | 58,190 |  |  | $ | (27,701 | ) |  | $ | 7,234 |  |  | $ | 45,066 |  |  | $ | 52,300 |  |  | $ | 9,125 |  |  |  |  |
APARTMENT/RESIDENTIAL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mammoth, California | APA001 | — |  |  |  |  | 10,078 |  |  | 40,312 |  |  | (50,009 | ) |  | 76 |  |  | 305 |  |  | 381 |  |  | — |  |  | 2007 |  | 0
Atlanta, Georgia | APA002 | — |  |  |  |  | 2,963 |  |  | 11,850 |  |  | (1,728 | ) |  | 2,617 |  |  | 10,468 |  |  | 13,085 |  |  | — |  |  | 2010 |  | 0
Jersey City, New Jersey | APA003 | — |  |  |  |  | 36,405 |  |  | 64,719 |  |  | (100,639 | ) |  | 174 |  |  | 311 |  |  | 485 |  |  | — |  |  | 2009 |  | 0
Philadelphia, Pennsylvania | APA004 | — |  |  |  |  | 15,890 |  |  | 29,510 |  |  | (39,100 | ) |  | 2,205 |  |  | 4,095 |  |  | 6,300 |  |  | — |  |  | 2012 |  | 0
Subtotal |  | $ | — |  |  |  |  | $ | 65,336 |  |  | $ | 146,391 |  |  | $ | (191,476 | ) |  | $ | 5,072 |  |  | $ | 15,179 |  |  | $ | 20,251 |  |  | $ | — |  |  |  |  |
MIXED USE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Riverside, California | MXU001 | — |  |  |  |  | 5,869 |  |  | 629 |  |  | 2 |  |  | 5,869 |  |  | 631 |  |  | 6,500 |  |  | 514 |  |  | 2010 |  | 40.0
Key West, Florida | MXU002 | — |  |  |  |  | 18,229 |  |  | 20,899 |  |  | 2,750 |  |  | 18,229 |  |  | 23,649 |  |  | 41,878 |  |  | 5,388 |  |  | 2014 |  | 40.0
Subtotal |  | $ | — |  |  |  |  | $ | 24,098 |  |  | $ | 21,528 |  |  | $ | 2,752 |  |  | $ | 24,098 |  |  | $ | 24,280 |  |  | $ | 48,378 |  |  | $ | 5,902 |  |  |  |  |

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iStar Inc.
Schedule III—Real Estate and Accumulated Depreciation (Continued)
As of December 31, 2018
($ in thousands)

|  |  |  |  |  | Initial Cost to Company |  | Cost Capitalized Subsequent to Acquisition(2) |  | Gross Amount Carried at Close of Period |  |  |  |  |  |
Location |  | Encumbrances |  |  |  | Land |  | Building and Improvements |  | Land |  | Building and Improvements |  | Total |  | Accumulated Depreciation |  | Date Acquired |  | Depreciable Life (Years)
Total |  | $ | 802,367 |  |  |  |  | $ | 1,039,661 |  |  | $ | 1,611,811 |  |  | $ | 59,040 |  |  | $ | 1,093,068 |  |  | $ | 1,617,444 |  |  | $ | 2,710,512 |  | (4) | $ | 318,724 |  | (5) |  |  |

_______________________________________________________________________________

(1) | Consists of properties pledged as collateral under the Company's secured credit facilities with a carrying value of $472.0 million.

(2) | Includes impairments and unit sales.

(3) | These properties have land improvements which have depreciable lives of 15 to 20 years.

(4) | The aggregate cost for Federal income tax purposes was approximately $3.16 billion at December 31, 2018.

(5) | Includes $8.6 million and $4.8 million relating to accumulated depreciation for land and development assets and real estate assets held for sale, respectively, as of December 31, 2018.

The following table reconciles real estate from January 1, 2016 to December 31, 2018:

|  | 2018 |  | 2017 |  | 2016
Balance at January 1 |  | $ | 2,577,195 |  |  | $ | 2,997,351 |  |  | $ | 3,246,469 |
Improvements and additions |  | 203,124 |  |  | 167,676 |  |  | 169,999 |
Acquisitions through foreclosure |  | 4,600 |  |  | — |  |  | 40,583 |
Other acquisitions |  | 762,207 |  |  | 5,164 |  |  | 30,618 |
Dispositions |  | (656,900 | ) |  | (561,431 | ) |  | (484,810 | )
Other |  | — |  |  | — |  |  | 4,035 |
Impairments |  | (179,714 | ) |  | (31,565 | ) |  | (9,543 | )
Balance at December 31 |  | $ | 2,710,512 |  |  | $ | 2,577,195 |  |  | $ | 2,997,351 |

The following table reconciles accumulated depreciation from January 1, 2016 to December 31, 2018:

|  | 2018 |  | 2017 |  | 2016
Balance at January 1 |  | $ | (366,265 | ) |  | $ | (426,982 | ) |  | $ | (467,616 | )
Additions |  | (48,376 | ) |  | (44,270 | ) |  | (48,761 | )
Dispositions |  | 95,917 |  |  | 104,987 |  |  | 89,395 |
Balance at December 31 |  | $ | (318,724 | ) |  | $ | (366,265 | ) |  | $ | (426,982 | )

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iStar Inc.
Schedule IV—Mortgage Loans on Real Estate
As of December 31, 2018
($ in thousands)

Type of Loan/Borrower |  | Underlying Property Type |  | Contractual Interest Accrual Rates |  | Contractual Interest Payment Rates |  | Effective Maturity Dates |  | Periodic Payment Terms(1) |  | Prior Liens |  | Face Amount of Mortgages |  | Carrying Amount of Mortgages(2)(3)
Senior Mortgages: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrower A |  | Mixed Use/Mixed Collateral |  | LIBOR + 5.15% |  | LIBOR + 5.15% |  | July 2019 |  | IO |  | $ | — |  |  | $ | 107,196 |  |  | $ | 107,427 |
Borrower B |  | Apartment/Residential |  | LIBOR + 5.25% |  | LIBOR + 5.25% |  | December 2019 |  | IO |  | — |  |  | 88,612 |  |  | 88,114 |
Borrower C |  | Hotel |  | LIBOR + 6% |  | LIBOR + 6% |  | July 2019 |  | IO |  | — |  |  | 84,000 |  |  | 84,959 |
Borrower D |  | Land |  | LIBOR + 6% |  | LIBOR + 6% |  | March 2021 |  | IO |  | — |  |  | 71,934 |  |  | 71,120 |
Borrower E |  | Office |  | LIBOR + 4% |  | LIBOR + 4% |  | August 2020 |  | IO |  | — |  |  | 31,039 |  |  | 31,017 |
Borrower F |  | Mixed Use/Mixed Collateral |  | LIBOR + 4.75% |  | LIBOR + 4.75% |  | July 2020 |  | IO |  | — |  |  | 30,833 |  |  | 30,432 |
Borrower G |  | Hotel |  | LIBOR + 6% |  | LIBOR + 6% |  | April 2019 |  | IO |  | — |  |  | 29,252 |  |  | 29,085 |
Borrower H |  | Apartment/Residential |  | LIBOR + 5.75% |  | LIBOR + 5.75% |  | March 2021 |  | IO |  | — |  |  | 27,274 |  |  | 27,019 |
Borrower I |  | Apartment/Residential |  | 7.50% |  | 7.50% |  | January 2024 |  | IO |  | — |  |  | 27,000 |  |  | 26,828 |
Senior mortgages individually <3% |  | Apartment/Residential, Retail, Mixed Use/Mixed Collateral, Office, Hotel, Land, Other |  | Fixed: 5% to 9.68% Variable: LIBOR + 3% to LIBOR + 7.50% |  | Fixed: 6% to 9.68% Variable: LIBOR + 3% to LIBOR + 7.50% |  | 2019 to 2024 |  |  |  |  |  |  | 282,469 |  |  | 224,353 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 779,609 |  |  | 720,354 |
Subordinate Mortgages: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Subordinate mortgages individually <3% |  | Hotel |  | Fixed: 6.8% to 14.0% |  | Fixed: 6.8% to 14% |  | 2019 to 2057 |  |  |  |  |  |  | 10,485 |  |  | 10,161 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,485 |  |  | 10,161 |
Total mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 790,094 |  |  | $ | 730,515 |

_______________________________________________________________________________

(1) | IO = Interest only.

(2) | Amounts are presented net of asset-specific reserves of $40.4 million on impaired loans. Impairment is measured using the estimated fair value of collateral, less costs to sell.

(3) | The carrying amount of mortgages approximated the federal income tax basis.

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iStar Inc.
Schedule IV—Mortgage Loans on Real Estate (Continued)
As of December 31, 2018
($ in thousands)
Reconciliation of Mortgage Loans on Real Estate:
The following table reconciles Mortgage Loans on Real Estate from January 1, 2016 to December 31, 2018(1):

| 2018 |  | 2017 |  | 2016
Balance at January 1 | $ | 752,129 |  |  | $ | 915,905 |  |  | $ | 934,964 |
Additions: |  |  |  |  |
New mortgage loans | 381,133 |  |  | 265,966 |  |  | 25,893 |
Additions under existing mortgage loans | 157,702 |  |  | 132,703 |  |  | 165,275 |
Other(2) | 25,778 |  |  | 23,388 |  |  | 30,694 |
Deductions(3): |  |  |  |  |
Collections of principal | (501,466 | ) |  | (528,321 | ) |  | (247,431 | )
Recovery of (provision for) loan losses | (45 | ) |  | 28 |  |  | 9,747 |
Transfers to real estate and equity investments | (84,684 | ) |  | (57,505 | ) |  | (3,177 | )
Amortization of premium | (32 | ) |  | (35 | ) |  | (60 | )
Balance at December 31 | $ | 730,515 |  |  | $ | 752,129 |  |  | $ | 915,905 |

______________________________________________________________

(1) | Balances represent the carrying value of loans, which are net of asset specific reserves.

(2) | Amount includes amortization of discount, deferred interest capitalized and mark-to-market adjustments resulting from changes in foreign exchange rates.

(3) | Amounts are presented net of charge-offs of $1.2 million and $10.1 million for the years ended December 31, 2017 and 2016, respectively.

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Item 9. Changes and Disagreements with Registered Public Accounting Firm on Accounting and Financial Disclosure
None.
Item 9a. Controls and Procedures
Evaluation of Disclosure Controls and Procedures—The Company has established and maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company has formed a disclosure committee that is responsible for considering the materiality of information and determining the disclosure obligations of the Company on a timely basis. Both the Chief Executive Officer and the Chief Financial Officer are members of the disclosure committee.
Based upon their evaluation as of December 31, 2018, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act")) are effective.
Management's Report on Internal Control Over Financial Reporting—Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of the disclosure committee and other members of management, including the Chief Executive Officer and Chief Financial Officer, management carried out its evaluation of the effectiveness of the Company's internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on management's assessment under the framework in Internal Control—Integrated Framework, management has concluded that its internal control over financial reporting was effective as of December 31, 2018.
The Company's internal control over financial reporting as of December 31, 2018 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm.
Changes in Internal Controls Over Financial Reporting—There have been no changes during the last fiscal quarter in the Company's internal controls identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9b. Other Information
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance of the Registrant
Portions of the Company's definitive proxy statement for the 2019 annual meeting of shareholders to be filed within 120 days after the close of the Company's fiscal year are incorporated herein by reference.
Item 11. Executive Compensation
Portions of the Company's definitive proxy statement for the 2019 annual meeting of shareholders to be filed within 120 days after the close of the Company's fiscal year are incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Portions of the Company's definitive proxy statement for the 2019 annual meeting of shareholders to be filed within 120 days after the close of the Company's fiscal year are incorporated herein by reference.
Item 13. Certain Relationships, Related Transactions and Director Independence
Portions of the Company's definitive proxy statement for the 2019 annual meeting of shareholders to be filed within 120 days after the close of the Company's fiscal year are incorporated herein by reference.
Item 14. Principal Registered Public Accounting Firm Fees and Services
Portions of the Company's definitive proxy statement for the 2019 annual meeting of shareholders to be filed within 120 days after the close of the Company's fiscal year are incorporated herein by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) | and (c) Financial statements and schedules—see Index to Financial Statements and Schedules included in Item 8.

(b) | Exhibits—see index on following page.

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INDEX TO EXHIBITS

Exhibit Number |  | Document Description
3.1 |  | Restated Charter of the Company (including the Articles Supplementary for each Series of the Company's Preferred Stock).(1)
3.2 |  | Amended and Restated Bylaws of the Company.(2)
3.6 |  | Articles Supplementary relating to Series D Preferred Stock.(3)
3.8 |  | Articles Supplementary relating to Series G Preferred Stock.(4)
3.9 |  | Articles Supplementary relating to Series I Preferred Stock.(5)
3.10 |  | Articles Supplementary relating to Series J Preferred Stock.(6)
4.1 |  | Form of 8.00% Series D Cumulative Redeemable Preferred Stock Certificate.(3)
4.3 |  | Form of 7.65% Series G Cumulative Redeemable Preferred Stock Certificate.(4)
4.4 |  | Form of 7.50% Series I Cumulative Redeemable Preferred Stock Certificate.(5)
4.5 |  | Form of 4.50% Series J Cumulative Convertible Perpetual Preferred Stock Certificate.(7)
4.6 |  | Form of Stock Certificate for the Company's Common Stock.(8)
4.13 |  | Form of Global Note, No. 2-A evidencing 5.00% Senior Notes due 2019 issued on June 13, 2014.(9)
4.14 |  | Form of Global Note, No. 2-B evidencing 5.00% Senior Notes due 2019 issued on June 13, 2014.(9)
4.16 |  | Base Indenture, dated as of February 5, 2001, between the Company and State Street Bank and Trust Company.(10)
4.18 |  | Form of Global Note, No. 1 evidencing 6.50% Senior Notes due 2021 issued on March 29, 2016.(11)
4.22 |  | Twenty-Seventh Supplemental Indenture, dated June 13, 2014, governing the 5.00% Senior Notes due 2019.(9)
4.23 |  | Twenty-Eighth Supplemental Indenture, dated March 23, 2016, governing the 6.50% Senior Notes due 2021.(11)
4.24 |  | Twenty-Ninth Supplemental Indenture, dated as of March 13, 2017, governing the 6.00% Senior Notes Due 2022.(12)
4.25 |  | Form of Global Note, No. 1, evidencing 6.00% Senior Notes due 2022.(12)
4.26 |  | Thirtieth Supplemental Indenture, dated as of September 20, 2017, governing the 4.625% Senior Notes due 2020.(13)
4.27 |  | Form of Global Note, No. 1, evidencing 4.625% Senior Notes due 2020.(13)
4.28 |  | Thirty-First Supplemental Indenture, dated as of September 20, 2017, governing the 5.25% Senior Notes due 2022.(13)
4.29 |  | Form of Global Note, No. 1, evidencing 5.25% Senior Notes due 2022.(13)
4.30 |  | Thirty-Second Supplemental Indenture, dated as of September 20, 2017, governing the 3.125% Senior Notes due 2022.(13)
4.31 |  | Form of Global Note, No. 1, evidencing 3.125% Senior Notes due 2022.(13)
10.2 |  | iStar Inc. 2009 Long Term Incentive Compensation Plan.(14)
10.3 |  | iStar Inc. 2013 Performance Incentive Plan.(14)
10.5 |  | Form of Restricted Stock Unit Award Agreement.(15)
10.6 |  | Form of Restricted Stock Unit Award Agreement (Performance-Based Vesting).(16)
10.7 |  | Form of Award Agreement For Investment Pool.(8)
10.8 |  | Amended and Restated Credit Agreement, dated as of June 23, 2016, by the Company, the banks set forth therein and J.P. Morgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Chase Bank, N.A., Bank Of America, N.A. and Barclays Bank PLC as joint lead arrangers.(17)
10.9 |  | Security Agreement, dated as of June 23, 2016, made by the Company, and the other parties thereto in favor of J.P. Morgan Chase Bank, N.A., as administrative agent.(17)
10.11 |  | Amended and Restated Credit Agreement dated as of September 27, 2017, among the Company, the other parties named therein and JPMorgan Chase Bank, N.A. as administrative agent.(18)
10.12 |  | Third Amendment, dated as of June 28, 2018, to the Amended and Restated Credit Agreement referenced at Exhibit 10.8 (19)
10.13 |  | Second Amendment, dated as of June 21, 2018, to the Amended and Restated Credit Agreement referenced at Exhibit 10.11 (19)
14.0 |  | iStar Inc. Code of Conduct.(20)
16.1 |  | Letter from PricewaterhouseCoopers, LLP, dated November 28, 2017. (20)
21.1* |  | Subsidiaries of the Company.
23.1* |  | Consent of Deloitte & Touche LLP.
23.2* |  | Consent of PricewaterhouseCoopers LLP.
31.0* |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
32.0* |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.
100* |  | XBRL-related documents
101 |  | Interactive data file

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________________________________________________________________________
(1) Incorporated by reference from the Company's Current Report on Form 8-K filed on December 15, 2016.
(2) Incorporated by reference from the Company's Current Report on Form 8-K filed on October 25, 2013.
(3) Incorporated by reference from the Company's Current Report on Form 8-A filed on July 8, 2003.
(4) Incorporated by reference from the Company's Current Report on Form 8-A filed on December 10, 2003.
(5) Incorporated by reference from the Company's Current Report on Form 8-A filed on February 27, 2004.
(6) Incorporated by reference from the Company's Current Report on Form 8-K filed on March 18, 2013.
(7) Incorporated by reference from the Company's Current Report on Form 8-A filed on March 18, 2013.
(8) Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 2, 2015.
(9) Incorporated by reference from the Company's Current Report on Form 8-K filed on June 13, 2014.
(10) Incorporated by reference from the Company's Form S-3 Registration Statement filed on February 12, 2001.
(11) Incorporated by reference to the Company's Current Report on Form 8-K filed on March 29, 2016.
(12) Incorporated by reference from the Company's Current Report on Form 8-K filed on March 13, 2017.
(13) Incorporated by reference from the Company's Current Report on Form 8-K filed on September 20, 2017.
(14) Incorporated by reference from the Company's Definitive Proxy Statement filed on April 11, 2014.
(15) Incorporated by reference from the Company's Current Report on Form 8-K filed on January 25, 2007.
(16) Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 filed on May 9, 2008.
(17) Incorporated by reference from the Company's Current Report on Form 8-K filed on June 29, 2016.
(18) Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 2, 2017.
(19) Incorporated by reference from the Company's Current Report on Form 8-K filed on July 5, 2018.
(20) Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 2004 filed on March 16, 2005.
* Filed herewith.
**In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections.
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Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | iStar Inc. Registrant
Date: | February 25, 2019 | /s/ JAY SUGARMAN
|  | Jay Sugarman Chairman of the Board of Directors and Chief Executive Officer (principal executive officer)
|  | iStar Inc. Registrant
Date: | February 25, 2019 | /s/ ANDREW C. RICHARDSON
|  | Andrew C. Richardson Chief Financial Officer (principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: | February 25, 2019 | /s/ JAY SUGARMAN
|  | Jay Sugarman Chairman of the Board of Directors Chief Executive Officer
Date: | February 25, 2019 | /s/ CLIFFORD DE SOUZA
|  | Clifford De Souza Director
Date: | February 25, 2019 | /s/ ROBERT W. HOLMAN, JR.
|  | Robert W. Holman, Jr. Director
Date: | February 25, 2019 | /s/ ROBIN JOSEPHS
|  | Robin Josephs Director
Date: | February 25, 2019 | /s/ DALE ANNE REISS
|  | Dale Anne Reiss Director
Date: | February 25, 2019 | /s/ BARRY W. RIDINGS
|  | Barry W. Ridings Director

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