The following is a summary of the Company’s loans receivable and other lending investments by class ($ in thousands):

(1)	As of March 31, 2022, 100% of gross carrying value of construction loans had completed construction.

Allowance for Loan Losses—Changes in the Company’s allowance for loan losses were as follows for the three months ended March 31, 2022 and 2021 ($ in thousands):


	General Allowance
					Held to
	Construction				Maturity Debt		Specific
Three Months Ended March 31, 2022	Loans		Loans		Securities		Allowance		Total
Allowance for loan losses at beginning of period	$	1,213	$	676	$	2,304	$	576	$	4,769
Provision for (recovery of) loan losses⁽¹⁾		39		(2)		111		15		163
Allowance for loan losses at end of period	$	1,252	$	674	$	2,415	$	591	$	4,932

Three Months Ended March 31, 2021
Allowance for loan losses at beginning of period	$	6,541	$	1,643	$	3,093	$	743	$	12,020
(Recovery of) provision for loan losses⁽¹⁾		(3,648)		172		(408)		(76)		(3,960)
Allowance for loan losses at end of period	$	2,893	$	1,815	$	2,685	$	667	$	8,060

(1)

During the three months ended March 31, 2022 and 2021, the Company recorded a provision for (recovery of) loan losses of $0.1 million and ($3.6) million, respectively, in its consolidated statements of operations. The provision in 2022 was due primarily to accretion on the Company’s held-to-maturity debt security. The recovery in 2021 was due primarily to the repayment of loans during the three months ended March 31, 2021 and an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. Of this amount, $0.3 million related to a provision for loan losses for unfunded loan commitments and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities.”

The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows as of March 31, 2022 and December 31, 2021 ($ in thousands):


	Individually		Collectively
	Evaluated for		Evaluated for
	Impairment⁽¹⁾		Impairment		Total
As of March 31, 2022
Construction loans⁽²⁾	$	59,642	$	126,452	$	186,094
Loans⁽²⁾		—		27,394		27,394
Held-to-maturity debt securities		—		98,419		98,419
Available-for-sale debt securities⁽³⁾		—		24,864		24,864
Less: Allowance for loan losses		(591)		(4,341)		(4,932)
Total	$	59,051	$	272,788	$	331,839
As of December 31, 2021
Construction loans⁽²⁾	$	59,640	$	125,621	$	185,261
Loans⁽²⁾		—		27,422		27,422
Held-to-maturity debt securities		—		96,838		96,838
Available-for-sale debt securities⁽³⁾		—		28,092		28,092
Less: Allowance for loan losses		(576)		(4,193)		(4,769)
Total	$	59,064	$	273,780	$	332,844

(1)

The carrying value of this loan includes an unamortized discount of $0.8 million and $0.8 million as of March 31, 2022 and December 31, 2021, respectively. The Company’s loans individually evaluated for impairment represent loans on non-accrual status and the unamortized amounts associated with these loans are not currently being amortized into income.

(2)	The carrying value of these loans includes unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.2 million and $0.2 million as of March 31, 2022 and December 31, 2021, respectively.

(3)	Available-for-sale debt securities are evaluated for impairment under ASC 326-30 – Financial Instruments-Credit Losses.

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 designates loans as non-performing at such time as: (1) interest payments become 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.

The Company’s amortized cost basis in performing senior mortgages, corporate/partnership loans and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of March 31, 2022 were as follows ($ in thousands):


	Year of Origination
	2022		2021		2020		2019		2018		Prior to 2018		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		11,899		—		11,899
2.5		—		—		—		—		52,336		—		52,336
3.0		—		—		—		—		62,912		2,826		65,738
3.5		—		—		—		—		11,203		—		11,203
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal⁽¹⁾	$	—	$	—	$	—	$	—	$	138,350	$	2,826	$	141,176
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		12,670		12,670
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	12,670	$	12,670
Total	$	—	$	—	$	—	$	—	$	138,350	$	15,496	$	153,846

(1)	As of March 31, 2022, excludes $59.6 million for one loan on non-accrual status.

The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands):


			Less Than		Greater
			or Equal		Than		Total
	Current		to 90 Days		90 Days		Past Due		Total
As of March 31, 2022
Senior mortgages	$	141,176	$	—	$	59,642		59,642	$	200,818
Subordinate mortgages		12,670		—		—		—		12,670
Total	$	153,846	$	—	$	59,642	$	59,642	$	213,488
As of December 31, 2021
Senior mortgages	$	139,968	$	—	$	59,640		59,640	$	199,608
Corporate/Partnership loans		618		—		—		—		618
Subordinate mortgages		12,457		—		—		—		12,457
Total	$	153,043	$	—	$	59,640	$	59,640	$	212,683

Impaired Loans—The Company’s impaired loan was as follows ($ in thousands):


	As of March 31, 2022						As of December 31, 2021
			Unpaid						Unpaid
	Amortized		Principal		Related		Amortized		Principal		Related
	Cost		Balance		Allowance		Cost		Balance		Allowance
With an allowance recorded:
Senior mortgages⁽¹⁾	$	59,642	$	58,892	$	(591)	$	59,640	$	58,888	$	(576)
Total	$	59,642	$	58,892	$	(591)	$	59,640	$	58,888	$	(576)

(1)	The Company has one non-accrual loan as of March 31, 2022 and December 31, 2021 that is considered impaired and included in the table above. The Company did not record any interest income on impaired loans for the three months ended March 31, 2022 and 2021.

Loans receivable held for sale—In March 2021, the Company acquired land and simultaneously structured and entered into with the seller a Ground Lease on which a multi-family project will be constructed. The Company funded $16.1 million at closing and the Ground Lease documents provided for future funding obligations to the Ground Lease tenant of approximately $11.9 million of deferred purchase price and $52.0 million of leasehold improvement allowance upon achievement of certain milestones. At closing, the Company entered into an agreement with SAFE pursuant to which, subject to certain conditions being met, SAFE would acquire the ground lessor entity from the Company. The Company determined that the transaction did not qualify as a sale leaseback transaction and recorded the Ground Lease in “Loans receivable held for sale” on the Company’s consolidated balance sheet. Subsequent to closing, the Company funded approximately $6.0 million of the deferred purchase price to the Ground Lease tenant. The Company sold the ground lessor entity (and SAFE assumed all future funding obligations to the Ground Lease tenant) to SAFE in September 2021 for $22.1 million and recorded no gain or loss on the sale.

In June 2021, the Company acquired a parcel of land for $42.0 million and simultaneously entered into a Ground Lease (refer to Note 5). The Company also concurrently entered into an agreement pursuant to which SAFE would acquire the Ground Lease from the Company. The Ground Lease was entered into with the seller of the land and did not qualify for sale leaseback accounting, and as such, was accounted for as a financing transaction and $42.0 million was recorded in “Loans receivable held for sale” on the Company’s consolidated balance sheet at the time of acquisition. In January 2022, the Company sold its loan receivable held for sale to the Ground Lease Plus Fund (refer to Note 8).

Other lending investments—Other lending investments includes the following securities ($ in thousands):


					Net				Net
			Amortized		Unrealized		Estimated		Carrying
	Face Value		Cost Basis		Gain		Fair Value		Value
As of March 31, 2022
Available-for-Sale Securities
Municipal debt securities	$	23,640	$	23,640	$	1,224	$	24,864	$	24,864
Held-to-Maturity Securities
Debt securities		100,000		98,419		—		98,419		98,419
Total	$	123,640	$	122,059	$	1,224	$	123,283	$	123,283
As of December 31, 2021
Available-for-Sale Securities
Municipal debt securities	$	23,855	$	23,855	$	4,237	$	28,092	$	28,092
Held-to-Maturity Securities
Debt securities		100,000		96,838		—		96,838		96,838
Total	$	123,855	$	120,693	$	4,237	$	124,930	$	124,930

As of March 31, 2022, the contractual maturities of the Company’s securities were as follows ($ in thousands):


	Held-to-Maturity Debt Securities				Available-for-Sale Debt Securities
	Amortized		Estimated		Amortized		Estimated
	Cost Basis		Fair Value		Cost Basis		Fair Value
Maturities
Within one year	$	—	$	—	$	—	$	—
After one year through 5 years		98,419		98,419		—		—
After 5 years through 10 years		—		—		—		—
After 10 years		—		—		23,640		24,864
Total	$	98,419	$	98,419	$	23,640	$	24,864