The Company uses SPEs to facilitate transactions that involve securitizing financial assets or re-securitizing previously securitized financial assets. The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity or refinancing the underlying securitized financial assets on improved terms. Securitization involves transferring assets to an SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business through the SPE’s issuance of debt or equity instruments. Investors in an SPE usually have recourse only to the assets in the SPE and depending on the overall structure of the transaction, may benefit from various forms of credit enhancement, such as over-collateralization in the form of excess assets in the SPE, priority with respect to receipt of cash flows relative to holders of other debt or equity instruments issued by the SPE, or a line of credit or other form of liquidity agreement that is designed with the objective of ensuring that investors receive principal and/or interest cash flow on the investment in accordance with the terms of their investment agreement.

The Company has entered into financing transactions, including residential loan securitizations and re-securitizations, which required the Company to analyze and determine whether the SPEs that were created to facilitate the transactions are VIEs in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation.

As of March 31, 2022 and December 31, 2021, the Company evaluated its residential loan securitizations and concluded that the entities created to facilitate each of the financing transactions are VIEs and that the Company is the primary beneficiary of these VIEs (each a “Financing VIE” and collectively, the “Financing VIEs”). Accordingly, the Company consolidated the then-outstanding Financing VIEs as of March 31, 2022 and December 31, 2021. During the three months ended March 31, 2021, the Company exercised its right to an optional redemption of its non-Agency RMBS re-securitization with an outstanding principal balance of $14.7 million at the time of redemption and returned the assets held by the trust to the Company.

The Company invests in subordinated securities that represent the first loss position of the Freddie Mac-sponsored residential loan securitization from which they were issued, and certain IOs and senior securities issued from the securitization. The Company has evaluated its investments in this securitization trust to determine whether it is a VIE and if so, whether the Company is the primary beneficiary requiring consolidation. The Company has determined that the Freddie Mac-sponsored residential loan securitization trust, which we refer to as Consolidated SLST, is a VIE as of March 31, 2022 and December 31, 2021, and that the Company is the primary beneficiary of the VIE within Consolidated SLST. Accordingly, the Company has consolidated the assets, liabilities, income and expenses of such VIE in the accompanying condensed consolidated financial statements (see Notes 2, 3 and 11). The Company has elected the fair value option on the assets and liabilities held within Consolidated SLST, which requires that changes in valuations in the assets and liabilities of Consolidated SLST be reflected in the Company’s condensed consolidated statements of operations.

The Company does not have any claims to the assets or obligations for the liabilities of Consolidated SLST, other than those securities owned by the Company as of March 31, 2022 and December 31, 2021 with a fair value of $214.1 million and $230.3 million, respectively (see Note 14). The Company’s investments that are included in Consolidated SLST were not included as collateral to any Financing VIE as of March 31, 2022 and December 31, 2021.

The Company invests in joint venture investments that own multi-family apartment communities, which the Company determined to be VIEs and for which the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities, income and expenses of these VIEs in the accompanying condensed consolidated financial statements with non-controlling interests or redeemable non-controlling interests for the third-party ownership of the joint ventures' membership interests. Additionally, during the three months ended March 31, 2022, a Consolidated VIE purchased two multi-family apartment communities. The Company accounted for the initial consolidation of the joint venture investments and the real estate acquisitions by a Consolidated VIE in accordance with asset acquisition provisions of ASC 805, as substantially all of the fair value of the assets within the entities are concentrated in either a single identifiable asset or group of similar identifiable assets.

The following table summarizes the aggregate estimated fair value of the assets, liabilities and non-controlling interests associated with the initial consolidation of the joint venture entities and real estate acquisitions by a Consolidated VIE during the three months ended March 31, 2022 (dollar amounts in thousands):


Cash	$	7,102
Operating real estate (1)	528,768
Lease intangibles (2)	27,461
Other assets	6,130
Total assets	569,461

Mortgages payable on real estate, net	409,756
Other liabilities	3,180
Total liabilities	412,936


Non-controlling interest (3)	10,488
Net assets consolidated	$	146,037

During the year ended December 31, 2020, the Company reconsidered its evaluation of its variable interest in a VIE that owns a multi-family apartment community and in which the Company held a preferred equity investment. The Company determined that it gained the power to direct the activities, and became primary beneficiary, of the VIE and consolidated this VIE into its consolidated financial statements. Subsequently, in July 2021, the VIE redeemed its non-controlling interest which resulted in an equity transaction accounted for by the Company in accordance with ASC 810. In addition, the Company reconsidered its evaluation of its investment in the entity and determined that the entity no longer met the criteria for being characterized as a VIE and is a wholly-owned subsidiary of the Company. In March 2022, the entity completed the sale of its multi-family apartment community and redeemed the Company's preferred equity investment (see Note 8).

In analyzing whether the Company is the primary beneficiary of the Financing VIEs, Consolidated SLST and Consolidated Real Estate VIEs, the Company considered its involvement in each of the VIEs, including the design and purpose of each VIE, and whether its involvement reflected a controlling financial interest that resulted in the Company being deemed the primary beneficiary of the VIEs. In determining whether the Company would be considered the primary beneficiary, the following factors were assessed:

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's residential loan securitizations, Consolidated SLST and Consolidated Real Estate VIEs as of March 31, 2022 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


	Financing VIEs		Other VIEs
	Residential Loan Securitizations			Consolidated SLST		Consolidated Real Estate		Total
Cash and cash equivalents	$	—		$	—	$	33,340	$	33,340
Residential loans, at fair value	1,262,356			969,853		—		2,232,209
Real estate, net held in Consolidated VIEs (1)	—			—		1,451,053		1,451,053
Other assets	87,833			3,437		64,912		156,182
Total assets	$	1,350,189		$	973,290	$	1,549,305	$	3,872,784

Collateralized debt obligations ($1,143,855 at amortized cost, net and $754,264 at fair value)	$	1,143,855		$	754,264	$	—	$	1,898,119
Mortgages payable on real estate, net in Consolidated VIEs (2)	—			—		1,083,371		1,083,371
Other liabilities	32,432			3,482		13,135		49,049
Total liabilities	$	1,176,287		$	757,746	$	1,096,506	$	3,030,539
Redeemable non-controlling interest in Consolidated VIEs (3)	$	—		$	—	$	53,361	$	53,361
Non-controlling interest in Consolidated VIEs (4)	$	—		$	—	$	32,383	$	32,383
Net investment (5)	$	173,902		$	215,544	$	367,055	$	756,501

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's residential loan securitizations, Consolidated SLST and Consolidated Real Estate VIEs as of December 31, 2021 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


	Financing VIEs		Other VIEs
	Residential Loan Securitizations		Consolidated SLST		Consolidated Real Estate		Total
Cash and cash equivalents	$	—	$	—	$	29,606	$	29,606
Residential loans, at fair value	801,429		1,070,882		—		1,872,311
Real estate, net held in Consolidated VIEs (1)	—		—		927,725		927,725
Other assets	36,767		3,547		70,557		110,871
Total assets	$	838,196	$	1,074,429	$	1,027,888	$	2,940,513

Collateralized debt obligations ($682,802 at amortized cost, net and $839,419 at fair value)	$	682,802	$	839,419	$	—	$	1,522,221
Mortgages payable on real estate, net in Consolidated VIEs (2)	—		—		672,568		672,568
Other liabilities	20,156		3,193		17,527		40,876
Total liabilities	$	702,958	$	842,612	$	690,095	$	2,235,665
Redeemable non-controlling interest in Consolidated VIEs (3)	$	—	$	—	$	66,392	$	66,392
Non-controlling interest in Consolidated VIEs (4)	$	—	$	—	$	24,359	$	24,359
Net investment (5)	$	135,238	$	231,817	$	247,042	$	614,097

The following table presents condensed statements of operations for non-Company-sponsored VIEs for the three months ended March 31, 2022 and 2021, respectively (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


	Three Months Ended March 31,
	2022						2021
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	9,380	$	—	$	9,380	$	10,318	$	—	$	10,318
Interest expense	5,978		6,835		12,813		7,104		310		7,414
Total net interest income (expense)	3,402		(6,835)		(3,433)		3,214		(310)		2,904

Unrealized (losses) gains, net	(15,279)		—		(15,279)		9,225		—		9,225
Income from real estate	—		23,637		23,637		—		1,495		1,495

Total non-interest (loss) income	(15,279)		23,637		8,358		9,225		1,495		10,720



Expenses related to real estate (1)	—		46,446		46,446		—		2,924		2,924

Net (loss) income	(11,877)		(29,644)		(41,521)		12,439		(1,739)		10,700
Net loss attributable to non-controlling interest in Consolidated VIEs	—		14,869		14,869		—		1,409		1,409
Net (loss) income attributable to Company	$	(11,877)	$	(14,775)	$	(26,652)	$	12,439	$	(330)	$	12,109

The third-party owners of certain of the non-controlling interests in Consolidated VIEs have the ability to sell their ownership interests to the Company, at their election. The Company has classified these third-party ownership interests as redeemable non-controlling interests in Consolidated VIEs in mezzanine equity on the accompanying condensed consolidated balance sheets. The holders of the redeemable non-controlling interests may elect to sell their ownership interests to the Company at fair value once a year and the sales are subject to minimum and maximum amount limitations.

As of March 31, 2022 and December 31, 2021, the Company evaluated its investment securities available for sale, preferred equity and other equity investments to determine whether they are VIEs and should be consolidated by the Company. Based on a number of factors, the Company determined that, as of March 31, 2022 and December 31, 2021, it does not have a controlling financial interest and is not the primary beneficiary of these VIEs. The following tables present the classification and carrying value of unconsolidated VIEs as of March 31, 2022 and December 31, 2021, respectively (dollar amounts in thousands):


	March 31, 2022
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Total
ABS	$	—	$	38,705	$	—	$	38,705
Non-Agency RMBS	—		28,617		—		28,617
Preferred equity investments in multi-family properties	110,208		—		182,504		292,712
Joint venture equity investments in multi-family properties	—		—		10,690		10,690
Equity investments in entities that invest in residential properties	—		—		2,856		2,856
Maximum exposure	$	110,208	$	67,322	$	196,050	$	373,580


	December 31, 2021
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Total
ABS	$	—	$	39,679	$	—	$	39,679
Non-Agency RMBS	—		30,924		—		30,924
Preferred equity investments in multi-family properties	120,021		—		180,798		300,819
Joint venture equity investments in multi-family properties	—		—		10,440		10,440
Equity investments in entities that invest in residential properties	—		—		19,143		19,143
Maximum exposure	$	120,021	$	70,603	$	210,381	$	401,005