Multi-family Loans, at Fair Value (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Mezzanine Loans and Preferred Equity Investments

Multi-family loans consist of the following as of September 30, 2024 and December 31, 2023, respectively (dollar amounts in thousands):


	September 30, 2024		December 31, 2023
Investment amount	$	91,778	$	95,434
Unrealized (losses) gains, net	(4,164)		358
Total, at Fair Value	$	87,614	$	95,792

During the nine months ended September 30, 2024, the Company invested in subordinated securities issued by a Freddie Mac-sponsored residential loan securitization, resulting in the initial consolidation of the VIE as shown below (dollar amounts in thousands):




Residential loans, at fair value	$	285,057
Collateralized debt obligations, at fair value	(275,200)
Net investment	$	9,857

The following tables present condensed statements of operations for non-Company-sponsored VIEs for the three and nine months ended September 30, 2024 and 2023, respectively (dollar amounts in thousands). The following tables include 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 September 30,
	2024						2023
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	11,002	$	—	$	11,002	$	8,370	$	—	$	8,370
Interest expense	7,375		—		7,375		5,957		—		5,957
Total net interest income	3,627		—		3,627		2,413		—		2,413

Income from real estate	—		29,096		29,096		—		39,287		39,287
Expenses related to real estate	—		36,024		36,024		—		47,367		47,367
Total net loss from real estate	—		(6,928)		(6,928)		—		(8,080)		(8,080)


Unrealized gains (losses), net	6,753		—		6,753		(9,325)		—		(9,325)
(Losses) gains on derivative instruments, net	—		(179)		(179)		—		315		315
Impairment of real estate	—		(8,402)		(8,402)		—		(44,157)		(44,157)

Other income (loss)	—		16,266		16,266		—		(103)		(103)
Total other income (loss)	6,753		7,685		14,438		(9,325)		(43,945)		(53,270)



Net income (loss)	10,380		757		11,137		(6,912)		(52,025)		(58,937)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		2,383		2,383		—		9,364		9,364
Net income (loss) attributable to Company	$	10,380	$	3,140	$	13,520	$	(6,912)	$	(42,661)	$	(49,573)


	Nine Months Ended September 30,
	2024						2023
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	28,284	$	—	$	28,284	$	25,543	$	—	$	25,543
Interest expense	19,928		—		19,928		18,238		—		18,238
Total net interest income	8,356		—		8,356		7,305		—		7,305

Income from real estate	—		97,725		97,725		—		120,247		120,247
Expenses related to real estate	—		134,667		134,667		—		145,310		145,310
Total net loss from real estate	—		(36,942)		(36,942)		—		(25,063)		(25,063)


Unrealized gains (losses), net	7,259		—		7,259		(19,354)		—		(19,354)
Gains on derivative instruments, net	—		2,668		2,668		—		5,572		5,572
Impairment of real estate	—		(44,173)		(44,173)		—		(71,296)		(71,296)
Loss on reclassification of disposal group	—		(14,636)		(14,636)		—		—		—
Other income (loss)	—		16,272		16,272		—		(61)		(61)
Total other income (loss)	7,259		(39,869)		(32,610)		(19,354)		(65,785)		(85,139)



Net income (loss)	15,615		(76,811)		(61,196)		(12,049)		(90,848)		(102,897)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		33,034		33,034		—		19,957		19,957
Net income (loss) attributable to Company	$	15,615	$	(43,777)	$	(28,162)	$	(12,049)	$	(70,891)	$	(82,940)

Schedule of Preferred Equity and Mezzanine Loans, Fair Value Compared to Unpaid Principal

The table below presents the fair value and aggregate unpaid principal balance of the Company's multi-family loan in non-accrual status as of September 30, 2024 and December 31, 2023, respectively (dollar amounts in thousands):


	September 30, 2024				December 31, 2023
Days Late	Fair Value (1)		Unpaid Principal Balance		Fair Value		Unpaid Principal Balance



90 +	$	—	$	3,363	$	4,753	$	3,363

(1)As of September 30, 2024, the Company has reduced the fair value of the multi-family loan to zero as a result of developments with respect to the property, its financing and market conditions.

Schedule of Geographic Concentration of Credit Risk Exceeding 5% of Balances

The geographic concentrations of credit risk exceeding 5% of the unpaid principal balance of residential loans, at fair value as of September 30, 2024 and December 31, 2023, respectively, are as follows:


	September 30, 2024						December 31, 2023
	Residential loans		Consolidated SLST		Residential loans held in securitization trusts		Residential loans		Consolidated SLST		Residential loans held in securitization trusts
California	13.6	%	11.6	%	23.3	%	22.4	%	10.7	%	18.4	%
Florida	10.7	%	9.1	%	13.2	%	15.5	%	10.3	%	11.0	%
New York	7.1	%	10.7	%	6.8	%	7.0	%	10.0	%	8.5	%
Texas	7.0	%	4.4	%	7.9	%	8.1	%	3.9	%	7.1	%
Pennsylvania	5.7	%	3.9	%	2.8	%	2.2	%	4.1	%	4.1	%
New Jersey	5.4	%	6.7	%	5.1	%	4.9	%	7.6	%	6.0	%
Illinois	3.1	%	6.4	%	2.8	%	3.0	%	7.2	%	3.5	%

The geographic concentrations of credit risk exceeding 5% of the total multi-family loan investment amounts as of September 30, 2024 and December 31, 2023, respectively, are as follows:


	September 30, 2024		December 31, 2023
Texas	35.1	%	32.6	%
Tennessee	16.4	%	15.2	%
Florida	11.3	%	10.5	%
Arkansas	10.1	%	9.5	%
Louisiana	8.5	%	7.5	%
North Carolina	6.1	%	5.8	%
Indiana	5.5	%	5.3	%

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details