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Other Investments (Tables)

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Schedule of other investments and proportionate share of earnings from equity method investments

The Company’s other investments and its proportionate share of earnings from equity investments were as follows ($ in thousands):


								Earnings from						Earnings from
		Carrying Value						Equity Method Investments						Equity Method Investments
		as of						For the Three Months Ended						For the Nine Months Ended
		September 30,			December 31,			September 30,						September 30,
		2023			2022			2023			2022			2023			2022
Safehold Inc. ("Safe")⁽¹⁾		$	240,703		$	554,733		$	—		$	16,052		$	1,089		$	27,956
Other real estate and strategic equity investments⁽²⁾			283			32,405			217			12,941			29,344			22,546
Total		$	240,986		$	587,138		$	217		$	28,993		$	30,433		$	50,502

(1)

As of September 30, 2023, the Company owned 13.5 million shares of Safe common stock which, based on the closing price of $17.80 on September 29, 2023, had a market value of $240.7 million. The Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321 – Investments – Equity Securities (“ASC 321”), which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. As such, the Company recognized an “Unrealized loss on equity investment” of $80.2 million and $247.1 million, respectively, in its combined and consolidated statements of operations for the three and nine months ended September 30, 2023. Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 – Investments – Equity Method and Joint Ventures (“ASC 323”) due to its ability to exercise significant influence. Pursuant to ASC 323-10-40-1, an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment. Any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. For the nine months ended September 30, 2022, equity in earnings includes $0.3 million of dilution gains resulting from Safe equity offerings. As of December 31, 2022, the Company was allocated ownership of approximately 15.2 million shares of Safe common stock from iStar. The allocation was adjusted based upon the final terms of the Spin-Off on March 31, 2023, and the Company’s investment basis was reduced by approximately 1.8 million shares with a carrying value of approximately $65.6 million, which was adjusted against additional paid-in capital within equity.

(2)

For the nine months ended September 30, 2023, the Company recorded $29.3 million in earnings from equity method investments primarily from the sale of properties within its equity method investments. For the nine months ended September 30, 2022, the Company recognized earnings from equity method investments of $11.5 million primarily from the sale of a multifamily property at one of our ventures and $5.0 million primarily from the settlement of our interest in a venture.

Schedule of summarized financial information

Summarized investee financial information—The following table presents the investee level summarized financial information for the Company’s equity method investment in Safe that was significant for the periods presented ($ in thousands):


		Revenues			Expenses			Net Income Attributable to Safe⁽¹⁾
For the Three Months Ended March 31, 2023⁽²⁾
Safe		$	78,329		$	75,875		$	4,682

For the Nine Months Ended September 30, 2022
Safe		$	196,943		$	136,517		$	113,628

(1)	Net Income Attributable to Safe also includes gain on sale of net investment in leases and earnings from equity method investments.

(2)

Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 due to its ability to exercise significant influence. Subsequent to the Spin-Off, the Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321, which requires that the Company adjust its investment in Safe to fair value through income at each reporting period.