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Net Investment in Sales-type Leases, Ground Lease Receivables and Loans Receivable, net - Related Party (Tables) | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Net Investment in Sales Type Leases | The Company’s net investment in sales-type leases were comprised of the following ($ in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, 2023 |  | December 31, 2022
Total undiscounted cash flows(1) | ​ | $ | 29,715,761 | ​ | $ | 29,586,227
Unguaranteed estimated residual value(1) | ​ |  | 2,915,013 | ​ |  | 2,900,218
Present value discount | ​ |  | (29,447,714) | ​ |  | (29,379,846)
Allowance for credit losses | ​ | ​ | (468) | ​ | ​ | —
Net investment in sales-type leases(2) | ​ | $ | 3,182,592 | ​ | $ | 3,106,599
(1) | As of September 30, 2023, total discounted cash flows were approximately $3,153 million and the discounted unguaranteed estimated residual value was $30.1 million. As of December 31, 2022, total discounted cash flows were approximately $3,077 million and the discounted unguaranteed estimated residual value was $29.1 million.
(2) | As of September 30, 2023, $6.5 million was attributable to noncontrolling interests.
Schedule of rollforward of net investment in sales-type leases and Ground Lease receivables | The following table presents a rollforward of the Company’s net investment in sales-type leases and Ground Lease receivables for the nine months ended September 30, 2023 and 2022 ($ in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Net Investment in | ​ | Ground Lease | ​ | ​ | ​
​ |  | Sales-type Leases |  | Receivables |  | Total
Nine Months Ended September 30, 2023 |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 3,106,599 | ​ | $ | 1,374,716 | ​ | $ | 4,481,315
Impact from adoption of new accounting standard (refer to Note 3) | ​ |  | (351) | ​ |  | (199) | ​ |  | (550)
Origination/acquisition/fundings(1) | ​ |  | 33,400 | ​ |  | 170,194 | ​ |  | 203,594
Accretion | ​ |  | 43,061 | ​ |  | 19,078 | ​ |  | 62,139
Provision for credit losses | ​ | ​ | (117) | ​ | ​ | (119) | ​ | ​ | (236)
Ending balance(2) | ​ | $ | 3,182,592 | ​ | $ | 1,563,670 | ​ | $ | 4,746,262
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Net Investment in | ​ | Ground Lease | ​ | ​ | ​
​ |  | Sales-type Leases |  | Receivables |  | Total
Nine Months Ended September 30, 2022 |  | ​ |  |  | ​ |  |  | ​ |
Beginning balance | ​ | $ | 2,412,716 | ​ | $ | 796,252 | ​ | $ | 3,208,968
Sales | ​ | ​ | (76,701) | ​ |  | — | ​ | ​ | (76,701)
Origination/acquisition/fundings(1) | ​ |  | 691,305 | ​ |  | 515,618 | ​ |  | 1,206,923
Accretion | ​ |  | 38,793 | ​ |  | 14,762 | ​ |  | 53,555
Ending balance | ​ | $ | 3,066,113 | ​ | $ | 1,326,632 | ​ | $ | 4,392,745
(1) | The net investment in sales-type leases is initially measured at the present value of the fixed and determinable lease payments, including any guaranteed or unguaranteed estimated residual value of the asset at the end of the lease, discounted at the rate implicit in the lease. For newly originated or acquired Ground Leases, the Company’s estimate of residual value equals the fair value of the land at lease commencement.
(2) | As of September 30, 2023 and December 31, 2022, all of the Company’s net investment in sales-type leases and Ground Lease receivables were current in their payment status. As of September 30, 2023, the Company’s weighted average accrual rate for its net investment in sales-type leases and Ground Lease receivables was 5.1% and 5.4%, respectively. As of September 30, 2023, the weighted average remaining life of the Company’s 35 Ground Lease receivables was 98.3 years.
Schedule of changes in allowance for credit losses on net investment in sales-type leases and Ground Lease receivables | Allowance for Credit Losses—Changes in the Company’s allowance for credit losses on net investment in sales-type leases and Ground Lease receivables for the three and nine months ended September 30, 2023 were as follows ($ in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Net investment in sales-type leases
​ | ​ | Stabilized | ​ | Development | ​ | Unfunded | ​ | ​
Three Months Ended September 30, 2023 | ​ | Properties | ​ | Properties | ​ | Commitments | ​ | Total
Allowance for credit losses at beginning of period | ​ | $ | 259 | ​ | $ | 77 | ​ | $ | 1 | ​ | $ | 337
Provision for credit losses(1) | ​ | ​ | 110 | ​ |  | 22 | ​ |  | — | ​ |  | 132
Allowance for credit losses at end of period(2) | ​ | $ | 369 | ​ | $ | 99 | ​ | $ | 1 | ​ | $ | 469
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Ground Lease receivables
​ | ​ | Stabilized | ​ | Development | ​ | Unfunded | ​ | ​
Three Months Ended September 30, 2023 | ​ | Properties | ​ | Properties | ​ | Commitments | ​ | Total
Allowance for credit losses at beginning of period | ​ | $ | 94 | ​ | $ | 127 | ​ | $ | 60 | ​ | $ | 281
Provision for (recovery of) credit losses(1) | ​ | ​ | 40 | ​ |  | 57 | ​ |  | (3) | ​ |  | 94
Allowance for credit losses at end of period(2) | ​ | $ | 134 | ​ | $ | 184 | ​ | $ | 57 | ​ | $ | 375
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Net investment in sales-type leases
​ | ​ | Stabilized | ​ | Development | ​ | Unfunded | ​ | ​
Nine Months Ended September 30, 2023 | ​ | Properties | ​ | Properties | ​ | Commitments | ​ | Total
Allowance for credit losses at beginning of period | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Impact from adoption of new accounting standard (refer to Note 3)(3) | ​ | ​ | 280 | ​ | ​ | 71 | ​ | ​ | 6 | ​ | ​ | 357
Provision for (recovery of) credit losses(1) | ​ | ​ | 89 | ​ |  | 28 | ​ |  | (5) | ​ |  | 112
Allowance for credit losses at end of period(2) | ​ | $ | 369 | ​ | $ | 99 | ​ | $ | 1 | ​ | $ | 469
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Ground Lease receivables
​ | ​ | Stabilized | ​ | Development | ​ | Unfunded | ​ | ​
Nine Months Ended September 30, 2023 | ​ | Properties | ​ | Properties | ​ | Commitments | ​ | Total
Allowance for credit losses at beginning of period | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Impact from adoption of new accounting standard (refer to Note 3)(3) | ​ | ​ | 102 | ​ | ​ | 97 | ​ | ​ | 84 | ​ | ​ | 283
Provision for (recovery of) credit losses(1) | ​ | ​ | 32 | ​ |  | 87 | ​ |  | (27) | ​ |  | 92
Allowance for credit losses at end of period(2) | ​ | $ | 134 | ​ | $ | 184 | ​ | $ | 57 | ​ | $ | 375
(1) | During the three months ended September 30, 2023, the Company recorded a provision for credit losses on net investment in sales-type leases and Ground Lease receivables of $0.1 million and $0.1 million, respectively. The provision for credit losses was due primarily to a declining macroeconomic forecast since June 30, 2023. During the nine months ended September 30, 2023, the Company recorded a provision for credit losses on net investment in sales-type leases and Ground Lease receivables of $0.1 million and $0.1 million, respectively. The provision for credit losses on net investment in leases and Ground Lease receivables was due primarily to a declining macroeconomic forecast since December 31, 2022.
(2) | Allowance for credit losses on unfunded commitments is recorded in “Accounts payable and accrued expenses” on the Company’s consolidated balance sheets.
(3) | On January 1, 2023, the Company recorded an allowance for credit losses on net investment in sales-type leases of $0.4 million and an allowance for credit losses on Ground Lease receivables of $0.2 million upon the adoption of ASU 2016-13, of which an aggregate of $0.1 million related to expected credit losses for unfunded commitments and was recorded in "Accounts payable, accrued expenses and other liabilities."
Amortized Cost Basis in Ground Lease Receivables | The Company’s amortized cost basis in Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of September 30, 2023 ($ in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Year of Origination |  |  | ​
​ |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior to 2019 |  | Total
Ground Lease receivables | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stabilized properties | ​ | $ | 19,004 | ​ | $ | 295,600 | ​ | $ | 133,296 | ​ | $ | 179,914 | ​ | $ | 447,915 | ​ | $ | — | ​ | $ | 1,075,729
Development properties | ​ |  | 1 | ​ |  | 345,220 | ​ |  | 143,038 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 488,259
Total | ​ | $ | 19,005 | ​ | $ | 640,820 | ​ | $ | 276,334 | ​ | $ | 179,914 | ​ | $ | 447,915 | ​ | $ | — | ​ | $ | 1,563,988
Future Minimum Lease Payments Under Sales-type Leases | Future Minimum Lease Payments under Sales-type Leases—Future minimum lease payments to be collected under sales-type leases accounted for under ASC 842 - Leases, excluding lease payments that are not fixed and determinable, in effect as of September 30, 2023, are as follows by year ($ in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ |  | ​ | ​ |  | Fixed Bumps |  | ​ | ​
​ | ​ | Fixed Bumps | ​ | ​ | ​ | ​ | with | ​ | ​ | ​
​ | ​ | with Inflation | ​ | Fixed | ​ | Percentage | ​ | ​ | ​
​ |  | Adjustments |  | Bumps |  | Rent |  | Total
2023 (remaining three months) | ​ | $ | 24,735 | ​ | $ | 561 | ​ | $ | 146 | ​ | $ | 25,442
2024 | ​ |  | 101,639 | ​ |  | 2,256 | ​ |  | 586 | ​ |  | 104,481
2025 | ​ |  | 103,607 | ​ |  | 2,283 | ​ |  | 586 | ​ |  | 106,476
2026 | ​ |  | 105,567 | ​ |  | 2,311 | ​ |  | 586 | ​ |  | 108,464
2027 | ​ | ​ | 107,475 | ​ | ​ | 2,339 | ​ | ​ | 586 | ​ | ​ | 110,400
Thereafter | ​ |  | 28,577,374 | ​ |  | 583,455 | ​ |  | 99,669 | ​ |  | 29,260,498
Total undiscounted cash flows | ​ | $ | 29,020,397 | ​ | $ | 593,205 | ​ | $ | 102,159 | ​ | $ | 29,715,761
Recognized Interest Income from Sales type Leases | During the three and nine months ended September 30, 2023 and 2022, the Company recognized interest income from sales-type leases in its consolidated statements of operations as follows ($ in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Net Investment | ​ | Ground | ​ | ​ | ​
​ | ​ | in Sales-type | ​ | Lease | ​ | ​ | ​
Three Months Ended September 30, 2023 |  | Leases |  | Receivables |  | Total
Cash | ​ | $ | 25,309 | ​ | $ | 12,767 | ​ | $ | 38,076
Non-cash | ​ |  | 14,482 | ​ |  | 6,572 | ​ |  | 21,054
Total interest income from sales-type leases | ​ | $ | 39,791 | ​ | $ | 19,339 | ​ | $ | 59,130
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Net Investment |  | Ground |  | ​ | ​
​ | ​ | in Sales-type | ​ | Lease | ​ | ​ | ​
Three Months Ended September 30, 2022 | ​ | Leases | ​ | Receivables | ​ | Total
Cash | ​ | $ | 24,256 | ​ | $ | 10,585 | ​ | $ | 34,841
Non-cash | ​ |  | 14,108 | ​ |  | 5,787 | ​ |  | 19,895
Total interest income from sales-type leases | ​ | $ | 38,364 | ​ | $ | 16,372 | ​ | $ | 54,736
​ ​ ​ ​ ​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Net Investment | ​ | Ground | ​ | ​ | ​
​ | ​ | in Sales-type | ​ | Lease | ​ | ​ | ​
Nine Months Ended September 30, 2023 |  | Leases |  | Receivables |  | Total
Cash | ​ | $ | 75,355 | ​ | $ | 36,856 | ​ | $ | 112,211
Non-cash | ​ |  | 43,061 | ​ |  | 19,078 | ​ |  | 62,139
Total interest income from sales-type leases | ​ | $ | 118,416 | ​ | $ | 55,934 | ​ | $ | 174,350
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Net Investment |  | Ground |  | ​ | ​
​ | ​ | in Sales-type | ​ | Lease | ​ | ​ | ​
Nine Months Ended September 30, 2022 | ​ | Leases | ​ | Receivables | ​ | Total
Cash | ​ | $ | 66,017 | ​ | $ | 26,442 | ​ | $ | 92,459
Non-cash | ​ |  | 38,793 | ​ |  | 14,762 | ​ |  | 53,555
Total interest income from sales-type leases | ​ | $ | 104,810 | ​ | $ | 41,204 | ​ | $ | 146,014
​

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