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Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities

Note 8—Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities

Deferred expenses and other assets, net, consist of the following items ($ in thousands):


	As of
	March 31, 2024		December 31, 2023
Operating lease right-of-use asset⁽¹⁾	$	32,929	$	33,964
Interest rate hedge assets		49,036		34,864
Deferred finance costs, net⁽²⁾		4,078		3,692
Other assets⁽³⁾		35,418		13,210
Purchase deposits		2,090		2,090
Leasing costs, net		437		439
Corporate furniture, fixtures and equipment, net		889		979
Deferred expenses and other assets, net	$	124,877	$	89,238

(1)

Operating lease right-of-use asset (and operating lease liability below) relates primarily to a property that is majority-owned by a third party and is ground leased to the Company. The Company is obligated to pay the owner of the property $0.5 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company’s Ground Lease tenant at the property pays this expense directly under the terms of a master lease. Operating lease right-of-use asset is amortized on a straight-line basis over the term of the lease and is recorded in “Real estate expense” in the Company’s consolidated statements of operations. During both the three months ended March 31, 2024 and 2023, the Company recognized $0.1 million in “Real estate expense” and $0.1 million in “Other income” from its operating lease right-of-use asset. The related operating lease liability (see table below) equals the present value of the minimum rental payments due under the lease discounted at the Company’s incremental secured borrowing rate for a similar asset estimated to be 5.5%. The Company also has operating leases for office space that it assumed from iStar in connection with the Merger (refer to Note 10).

(2)	Accumulated amortization of deferred finance costs was $12.3 million and $11.0 million as of March 31, 2024 and December 31, 2023, respectively.

(3)

As of March 31, 2024, includes $19.1 million of cash posted as temporary replacement collateral in a pool that has asset substitution rights related to certain of the Company’s debt obligations. As of March 31, 2024 and December 31, 2023, includes $6.2 million and $6.9 million, respectively, of management fees due from Star Holdings. Through March 31, 2024, the Company has earned $24.9 million of management fees from Star Holdings and as of March 31, 2024, $25.1 million of the transaction price is attributable to performance obligations that remain unsatisfied.

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


	As of
	March 31, 2024		December 31, 2023
Interest payable	$	69,884	$	68,821
Other liabilities		13,714		17,626
Dividends declared and payable		13,149		13,049
Operating lease liability⁽¹⁾		14,437		15,751
Accrued expenses⁽²⁾		7,409		19,271
Accounts payable, accrued expenses and other liabilities	$	118,593	$	134,518

(1)	Refer to Note 10.

(2)	As of March 31, 2024 and December 31, 2023, accrued expenses includes accrued compensation, legal, audit and property expenses.