Loans Receivable and Other Lending Investments, net (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of the company's loans and other lending investments by class

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


	As of
	December 31, 2022		December 31, 2021
Construction loans
Senior mortgages	$	36,249	$	184,643
Corporate/Partnership loans		—		618
Subtotal - gross carrying value of construction loans⁽¹⁾		36,249		185,261
Loans
Senior mortgages		—		14,965
Subordinate mortgages		13,331		12,457
Subtotal - gross carrying value of loans		13,331		27,422
Other lending investments
Held-to-maturity debt securities		—		96,838
Available-for-sale debt securities		—		28,092
Subtotal - other lending investments		—		124,930
Total gross carrying value of loans receivable and other lending investments		49,580		337,613
Allowance for loan losses		(925)		(4,769)
Total loans receivable and other lending investments, net	$	48,655	$	332,844

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

Schedule of changes in the company's allowance for loan losses

Changes in the Company’s allowance for loan losses were as follows for the years ended December 31, 2022, 2021 and 2020 ($ in thousands):


	General Allowance
					Held to
	Construction				Maturity Debt		Specific
Year Ended December 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⁾		(725)		(239)		—		46,034		45,070
Transfers		(396)		—		(2,304)		2,700		—
Charge-offs⁽¹⁾		—		—		—		(48,914)		(48,914)
Allowance for loan losses at end of period	$	92	$	437	$	—	$	396	$	925

Year Ended December 31, 2021
Allowance for loan losses at beginning of period	$	6,541	$	1,643	$	3,093	$	743	$	12,020
Recovery of loan losses⁽¹⁾		(5,328)		(967)		(789)		(167)		(7,251)
Allowance for loan losses at end of period	$	1,213	$	676	$	2,304	$	576	$	4,769

Year Ended December 31, 2020
Allowance for loan losses at beginning of period	$	6,668	$	265	$	—	$	21,701	$	28,634
Adoption of new accounting standard⁽²⁾		(353)		98		20		—		(235)
Provision for loan losses⁽¹⁾		226		1,280		3,073		4,931		9,510
Charge-offs⁽³⁾		—		—		—		(25,889)		(25,889)
Allowance for loan losses at end of period	$	6,541	$	1,643	$	3,093	$	743	$	12,020

(1)

During the year ended December 31, 2022, the Company recorded a provision for (recovery of) loan losses of $45.0 million in its consolidated statements of operations. The provision in 2022 was due primarily to a $22.2 million specific provision on the Company’s held-to-maturity debt security, which was recorded at its repayment proceeds and a provision of $23.8 million on one loan prior to it being transferred to held for sale. During the year ended December 31, 2021, the Company recorded a recovery of loan losses of $8.1 million in its consolidated statement of operations resulting from the repayment of loans during the period and an improving macroeconomic impact of the COVID-19 pandemic on commercial real estate markets, of which $1.0 million related to a provision for credit losses for unfunded loan commitments and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities". During the year ended December 31, 2020, the Company recorded a provision for loan losses of $8.9 million in its consolidated statement of operations resulting from the macroeconomic impact of the COVID-19 pandemic on commercial real estate markets, of which $1.5 million related to a recovery of credit losses for unfunded loan commitments and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities" and $0.9 million related to a provision on a non-performing loan that was recorded as a reduction to "Accrued interest and operating lease income receivable, net."

(2)

On January 1, 2020, the Company recorded an increase to its allowance for loan losses of $2.3 million upon the adoption of ASU 2016-13, of which $2.5 million related to expected credit losses for unfunded loan commitments and was recorded in "Accounts payable, accrued expenses and other liabilities."

(3)	During the year ended December 31, 2020, the Company charged-off $25.9 million from the specific allowance due to the sale of a non-performing loan.

Schedule of recorded investment in loans and associated allowance for loan losses

The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows ($ in thousands):


	Individually		Collectively
	Evaluated for		Evaluated for
	Impairment⁽¹⁾		Impairment		Total
As of December 31, 2022
Construction loans⁽²⁾	$	29,493	$	6,756	$	36,249
Loans⁽²⁾		—		13,331		13,331
Less: Allowance for loan losses		(396)		(529)		(925)
Total	$	29,097	$	19,558	$	48,655
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 these loans includes amortized fees of $0.1 million and $0.8 million as of December 31, 2022 and 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 an unamortized net discount of $0.2 million as of December 31, 2021.

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

Schedule of investment in performing loans, presented by class and by credit quality, as indicated by risk rating

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, was as follows as of December 31, 2022 ($ in thousands):


	Year of Origination
	2022		2021		2020		2019		2018		Prior to 2018		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		—		—
3.5		—		—		—		—		6,756		—		6,756
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal⁽¹⁾	$	—	$	—	$	—	$	—	$	6,756	$	—	$	6,756
Corporate/partnership loans
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		—		—
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		13,331		13,331
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	13,331	$	13,331
Total	$	—	$	—	$	—	$	—	$	6,756	$	13,331	$	20,087

(1)	As of December 31, 2022, excludes $29.5 million for one loan on non-accrual status.


	Year of Origination
	2021		2020		2019		2018		2017		Prior to 2017		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		11,909		—		—		11,909
2.5		—		—		—		52,161		—		—		52,161
3.0		—		—		—		58,522		—		3,056		61,578
3.5		—		—		—		14,320		—		—		14,320
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal⁽¹⁾	$	—	$	—	$	—	$	136,912	$	—	$	3,056	$	139,968
Corporate/partnership loans
Risk rating
1.0	$	—	$	—	$	—	$	618	$	—	$	—	$	618
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		—		—
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	618	$	—	$	—	$	618
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		12,457		12,457
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	12,457	$	12,457
Total	$	—	$	—	$	—	$	137,530	$	—	$	15,513	$	153,043

(1)	As of December 31, 2021, excludes $59.6 million for one loan on non-accrual status.

Schedule of recorded investment in loans, aged by payment status and presented by class

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 December 31, 2022
Senior mortgages	$	6,756	$	29,493	$	—		29,493	$	36,249
Subordinate mortgages		13,331		—		—		—		13,331
Total	$	20,087	$	29,493	$	—	$	29,493	$	49,580
As of December 31, 2021
Senior mortgages⁽¹⁾	$	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

(1)	Loan past due was transferred to held for sale as of December 31, 2022.

Schedule of recorded investment in impaired loans

The Company’s impaired loans, presented by class, were as follows ($ in thousands):


	As of December 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⁾	$	29,493	$	29,358	$	(396)	$	59,640	$	58,888	$	(576)
Total	$	29,493	$	29,358	$	(396)	$	59,640	$	58,888	$	(576)

(1)	The Company has one non-accrual loan as of December 31, 2022 and 2021 that is considered impaired and included in the table above. The Company did not record any interest income on impaired loans for the years ended December 31, 2022, 2021 and 2020.

Schedule of average recorded investment in impaired loans and interest income recognized, presented by class

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


	Years Ended December 31,
	2022				2021				2020
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With an allowance recorded:
Senior mortgages	$	45,032	$	—	$	57,853	$	—	$	50,205	$	2,145
Total	$	45,032	$	—	$	57,853	$	—	$	50,205	$	2,145

Schedule of other lending investments - securities

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 December 31, 2021
Available-for-Sale Securities⁽¹⁾
Municipal debt securities	$	23,855	$	23,855	$	4,237	$	28,092	$	28,092
Held-to-Maturity Securities⁽²⁾
Debt securities		100,000		96,838		—		96,838		96,838
Total	$	123,855	$	120,693	$	4,237	$	124,930	$	124,930

(1)	During the year ended December 31, 2022, the Company sold its available-for-sale securities and recognized a gain of $2.9 million, which is recorded in “Other income” in the Company’s consolidated statements of operations.

(2)	During the year ended December 31, 2022, the Company received $75.0 million of repayments and recorded a $22.2 million provision in ‘Provision for (recovery of) loan losses” in its consolidated statements of operations on its debt security.