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Preferred Equity and Mezzanine Loan Investments

9 Months Ended

Sep. 30, 2020

Investments, All Other Investments [Abstract]

Preferred Equity and Mezzanine Loan Investments

Preferred Equity and Mezzanine Loan Investments

As of January 1, 2020, the Company has elected to account for its preferred equity and mezzanine loan investments using the fair value option (see Note 2). Accordingly, balances presented below as of September 30, 2020 are stated at fair value and changes in fair value are presented in unrealized gains (losses), net on the Company’s condensed consolidated statements of operations. Preferred equity and mezzanine loan investments consist of the following as of September 30, 2020 and December 31, 2019, respectively (dollar amounts in thousands):

			September 30, 2020						December 31, 2019 (1)
Investment amount			$	188,654					$	181,409
Deferred loan fees, net			(1,291)						(1,364)
Unrealized losses, net			(4,209)						—
Total			$	183,154					$	180,045

(1)As of December 31, 2019, preferred equity and mezzanine loan investments were reported at amortized cost less impairment, if any.

For the three and nine months ended September 30, 2020, the Company recognized $0.9 million and $6.6 million, respectively, in net unrealized losses on preferred equity and mezzanine loan investments.

The table below presents the fair value and aggregate unpaid principal balance of the Company's preferred equity and mezzanine loan investments in non-accrual status as of September 30, 2020 (dollar amounts in thousands):

Days Late									Fair Value						Unpaid Principal Balance
90 +									$	3,373					$	3,363

There were no delinquent preferred equity or mezzanine loan investments as of December 31, 2019.

The geographic concentrations of credit risk exceeding 5% of the total preferred equity and mezzanine loan investment amounts as of September 30, 2020 and December 31, 2019, respectively, are as follows:

			September 30, 2020						December 31, 2019
Tennessee			12.2		%				12.3		%
Florida			11.9		%				12.0		%
Georgia			11.7		%				11.8		%
Texas			9.9		%				10.6		%
South Carolina			9.1		%				6.3		%
Alabama			8.3		%				10.0		%
New Jersey			5.0		%				5.0		%

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- References

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- Definition

The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-URI http://asc.fasb.org/topic&trid=2197479

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