Net Investment in Leases (Tables)

12 Months Ended

Dec. 31, 2021

The Company’s net investment in leases were comprised of the following as of December 31, 2021 ($ in thousands):


	December 31, 2021
Total undiscounted cash flows	$	524,712
Unguaranteed estimated residual value		42,000
Present value discount		(523,497)
Net investment in leases⁽¹⁾	$	43,215

(1)	As of December 31, 2021 and 2020, the Company’s net investment in lease was current in its payment status and performing in accordance with the terms of the lease. As of December 31, 2021, the risk rating on the Company’s net investment in leases was 1.0.

Schedule of future minimum lease payments to be collected under sales-type leases

Future minimum lease payments to be collected under sales-type leases, excluding lease payments that are not fixed and determinable and lease payments for assets that are classified as discontinued operations, in effect as of December 31, 2021, are as follows by year ($ in thousands):⁽¹⁾


	Amount
2022	$	109
2023		1,417
2024		1,445
2025		1,474
2026		1,504
Thereafter		518,763
Total undiscounted cash flows	$	524,712

Schedule of changes in allowance for losses on net investment in leases

Changes in the Company’s allowance for losses on net investment in leases for the years ended December 31, 2021 and 2020 were as follows ($ in thousands):


	Year Ended
	December 31, 2021		December 31, 2020
Allowance for losses on net investment in leases at beginning of period⁽¹⁾	$	10,871	$	—
Initial allowance recorded upon adoption of new accounting standard⁽²⁾		—		9,111
Provision for (recovery of) losses on net investment in leases included in discontinued operations⁽¹⁾		(10,871)		1,760
Allowance for losses on net investment in leases at end of period⁽¹⁾	$	—	$	10,871

(1)

Refer to Note 3 - Net Lease Sale and Discontinued Operations. During the year ended December 31, 2021, the Company recorded a recovery of losses on net investment in leases of $10.9 million. The recovery of losses on net investment in leases for the year ended December 31, 2021 resulted primarily from the cash flows the Company expects to receive upon disposition of the Company’s net investment in leases included in “Real estate and other assets available and held for sale and classified as discontinued operations” and “Net investment in leases” on the Company’s consolidated balance sheets. During the year ended December 31, 2020, the Company recorded a provision for losses on net investment in leases of $1.8 million resulting primarily from the macroeconomic impact of the COVID-19 pandemic on commercial real estate markets and the adoption of ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13").

(2)	The Company recorded an initial allowance for losses on net investment in leases of $9.1 million upon the adoption of ASU 2016-13 on January 1, 2020.