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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022.

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, 2023 and December 31, 2022, 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 13). 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.

As of March 31, 2023 and December 31, 2022, the Consolidated SLST securities owned by the Company had a fair value of $188.5 million and $191.5 million, respectively (see Note 16). The Company’s investments in Consolidated SLST securities were not included as collateral to any Financing VIE as of March 31, 2023 and December 31, 2022.

The Company owns joint venture equity investments in entities 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. The Company accounted for the initial consolidation of the joint venture equity investments and 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.

During the year ended December 31, 2020, the Company reconsidered its evaluation of its variable interest in a VIE that owned 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 condensed 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).

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 (1)	$	7,102
Operating real estate (1) (2)	528,768
Lease intangibles (1) (3)	27,461
Other assets (1)	6,130
Total assets	569,461

Mortgages payable on real estate, net (1)	409,756
Other liabilities (1)	3,180
Total liabilities	412,936


Non-controlling interests (4)	10,488
Net assets consolidated	$	146,037

(1)In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets. Accordingly, the Company determined that certain joint venture equity investments met the criteria to be classified as held for sale and transferred the assets and liabilities of the respective Consolidated VIEs to assets and liabilities of disposal group held for sale in the accompanying condensed consolidated balance sheets. See Note 9 for additional information.

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, 2023 (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	$	—		$	—	$	11,971	$	11,971
Residential loans, at fair value	1,624,703			829,153		—		2,453,856
Real estate, net held in Consolidated VIEs (1)	—			—		543,471		543,471
Assets of disposal group held for sale (2)	—			—		1,140,308		1,140,308
Other assets	96,699			3,122		9,396		109,217
Total assets	$	1,721,402		$	832,275	$	1,705,146	$	4,258,823

Collateralized debt obligations ($1,390,991 at amortized cost, net and $638,513 at fair value)	$	1,390,991		$	638,513	$	—	$	2,029,504
Mortgages payable on real estate, net in Consolidated VIEs (3)	—			—		397,316		397,316
Liabilities of disposal group held for sale (2)	—			—		896,983		896,983
Other liabilities	6,624			3,883		6,149		16,656
Total liabilities	$	1,397,615		$	642,396	$	1,300,448	$	3,340,459
Redeemable non-controlling interest in Consolidated VIEs (4)	$	—		$	—	$	54,352	$	54,352
Non-controlling interest in Consolidated VIEs (5)	$	—		$	—	$	31,309	$	31,309
Net investment (6)	$	323,787		$	189,879	$	319,037	$	832,703

(6)The net investment amount is the maximum amount of the Company's investment that is at risk to loss and represents the difference between the carrying value of total assets and total liabilities held by VIEs, less non-controlling interests, if any.

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, 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	$	—	$	—	$	21,129	$	21,129
Residential loans, at fair value	1,616,114		827,582		—		2,443,696
Real estate, net held in Consolidated VIEs (1)	—		—		543,739		543,739
Assets of disposal group held for sale (2)	—		—		1,142,773		1,142,773
Other assets	92,906		3,168		13,686		109,760
Total assets	$	1,709,020	$	830,750	$	1,721,327	$	4,261,097

Collateralized debt obligations ($1,468,222 at amortized cost, net and $634,495 at fair value)	$	1,468,222	$	634,495	$	—	$	2,102,717
Mortgages payable on real estate, net in Consolidated VIEs (3)	—		—		394,707		394,707
Liabilities of disposal group held for sale (2)	—		—		883,812		883,812
Other liabilities	8,168		3,342		10,511		22,021
Total liabilities	$	1,476,390	$	637,837	$	1,289,030	$	3,403,257
Redeemable non-controlling interest in Consolidated VIEs (4)	$	—	$	—	$	63,803	$	63,803
Non-controlling interest in Consolidated VIEs (5)	$	—	$	—	$	32,967	$	32,967
Net investment (6)	$	232,630	$	192,913	$	335,527	$	761,070

The following table presents condensed statements of operations for non-Company-sponsored VIEs for the three months ended March 31, 2023 and 2022, respectively (dollar amounts in thousands). The following table includes net (loss) income from assets and liabilities of disposal group held for sale and intercompany balances have been eliminated for purposes of this presentation.


	Three Months Ended March 31,
	2023						2022
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	8,733	$	—	$	8,733	$	9,380	$	—	$	9,380
Interest expense	6,315		—		6,315		5,978		—		5,978
Total net interest income	2,418		—		2,418		3,402		—		3,402


Unrealized gains (losses), net	2,299		(1,298)		1,001		(15,279)		—		(15,279)
Income from real estate	—		39,075		39,075		—		23,637		23,637
Other losses	—		(10,259)		(10,259)		—		—		—
Total non-interest income (loss)	2,299		27,518		29,817		(15,279)		23,637		8,358



Expenses related to real estate	—		48,062		48,062		—		53,281		53,281

Net income (loss)	4,717		(20,544)		(15,827)		(11,877)		(29,644)		(41,521)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		6,701		6,701		—		14,869		14,869
Net income (loss) attributable to Company	$	4,717	$	(13,843)	$	(9,126)	$	(11,877)	$	(14,775)	$	(26,652)

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 annual minimum and maximum amount limitations.


	Three Months Ended March 31,
	2023		2022
Beginning balance	$	63,803	$	66,392
Contributions	—		274
Distributions	(3,950)		(677)
Net loss attributable to redeemable non-controlling interest in Consolidated VIEs	(5,501)		(12,628)
Ending balance	$	54,352	$	53,361

As of March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, respectively (dollar amounts in thousands):


	March 31, 2023
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Assets of disposal group held for sale		Total
ABS	$	—	$	492	$	—	$	—	$	492
Non-Agency RMBS	—		28,125		—		—		28,125
Preferred equity investments in multi-family properties	95,309		—		166,148		—		261,457
Joint venture equity investments in multi-family properties	—		—		—		10,070		10,070
Maximum exposure	$	95,309	$	28,617	$	166,148	$	10,070	$	300,144


	December 31, 2022
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Assets of disposal group held for sale		Total
ABS	$	—	$	856	$	—	$	—	$	856
Non-Agency RMBS	—		29,290		—		—		29,290
Preferred equity investments in multi-family properties	87,534		—		152,246		—		239,780
Joint venture equity investments in multi-family properties	—		—		—		9,010		9,010
Maximum exposure	$	87,534	$	30,146	$	152,246	$	9,010	$	278,936