Debt and Preferred Equity Investments (Tables)

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of debt and preferred equity book balance roll forward

Below is the rollforward analysis of the activity relating to our debt and preferred equity investments as of September 30, 2017 and December 31, 2016 (in thousands):



	September 30, 2017			December 31, 2016
Balance at beginning of period ⁽¹⁾	$	1,640,412		$	1,670,020
Debt Investment Originations/Accretion ⁽²⁾	944,494			1,009,176
Preferred Equity Investment Originations/Accretion ⁽²⁾	144,013			5,698
Redemptions/Sales/Syndications/Amortization ⁽³⁾	(708,180		)	(1,044,482		)
Balance at end of period ⁽¹⁾	$	2,020,739		$	1,640,412


(1)	Net of unamortized fees, discounts, and premiums.


(2)	Accretion includes amortization of fees and discounts and paid-in-kind investment income.


(3)	Certain participations in debt investments that were sold or syndicated did not meet the conditions for sale accounting are included in other assets and other liabilities on the consolidated balance sheets.

Summary of debt investments

As of September 30, 2017 and December 31, 2016, we held the following debt investments with an aggregate weighted average current yield of 9.49%, excluding our investment in Two Herald Square, at September 30, 2017 (in thousands):



Loan Type	September 30, 2017 Future Funding Obligations		September 30, 2017 Senior Financing		September 30, 2017 Carrying Value ⁽¹⁾		December 31, 2016 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Fixed Rate Investments:
Mortgage/Jr. Mortgage Loan⁽³⁾	$	—	$	—	$	250,164	$	—	April 2017
Mortgage Loan⁽⁴⁾	—		—		26,352		26,311		February 2019
Mortgage Loan	—		—		275		380		August 2019
Mezzanine Loan^(5a)	—		1,160,000		201,757		—		March 2020
Mezzanine Loan	—		15,000		3,500		3,500		September 2021
Mezzanine Loan	—		147,000		24,909		—		April 2022
Mezzanine Loan	—		87,595		12,697		12,692		November 2023
Mezzanine Loan^(5b)	—		115,000		12,930		12,925		June 2024
Mezzanine Loan	—		95,000		30,000		30,000		January 2025
Mezzanine Loan	—		340,000		15,000		15,000		November 2026
Mezzanine Loan	—		1,657,500		55,250		—		June 2027
Mezzanine Loan⁽⁶⁾	—		—		—		66,129
Jr. Mortgage Participation/Mezzanine Loan ⁽⁷⁾	—		—		—		193,422
Total fixed rate	$	—	$	3,617,095	$	632,834	$	360,359
Floating Rate Investments:
Mortgage/Mezzanine Loan⁽⁸⁾	622		—		23,372		20,423		October 2017
Mezzanine Loan^(5c)	—		85,000		15,340		15,141		December 2017
Mezzanine Loan^(5d)	—		65,000		14,832		14,656		December 2017
Mezzanine Loan^(5e)	795		—		15,132		15,051		December 2017
Mortgage/Mezzanine Loan⁽⁹⁾	—		125,000		29,966		29,998		January 2018
Mezzanine Loan	—		40,000		19,964		19,913		April 2018
Jr. Mortgage Participation	—		117,808		34,899		34,844		April 2018
Mezzanine Loan	523		20,523		10,916		10,863		August 2018
Mortgage/Mezzanine Loan	—		—		19,914		19,840		August 2018
Mortgage Loan	—		65,000		14,935		14,880		August 2018



Loan Type	September 30, 2017 Future Funding Obligations		September 30, 2017 Senior Financing		September 30, 2017 Carrying Value ⁽¹⁾		December 31, 2016 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Mortgage/Mezzanine Loan⁽¹⁰⁾	—		—		16,957		16,960		September 2018
Mezzanine Loan	—		37,500		14,801		14,648		September 2018
Mezzanine Loan	2,325		45,025		34,782		34,502		October 2018
Mezzanine Loan	—		335,000		74,683		74,476		November 2018
Mezzanine Loan	—		33,000		26,907		26,850		December 2018
Mezzanine Loan	1,050		171,939		58,598		56,114		December 2018
Mezzanine Loan	8,267		289,621		71,067		63,137		December 2018
Mezzanine Loan	5,197		229,084		74,314		64,505		December 2018
Mezzanine Loan	—		45,000		12,156		12,104		January 2019
Mortgage/Mezzanine Loan ^(5f)	30,101		—		158,757		—		January 2019
Mezzanine Loan	6,081		24,086		7,812		5,410		January 2019
Mezzanine Loan	—		38,000		21,927		21,891		March 2019
Mezzanine Loan	279		173,700		36,936		—		April 2019
Mezzanine Loan	—		265,000		24,798		24,707		April 2019
Mortgage/Jr. Mortgage Participation Loan	29,661		194,094		69,705		65,554		August 2019
Mezzanine Loan	2,034		187,500		37,835		37,322		September 2019
Mortgage/Mezzanine Loan	49,933		—		130,350		111,819		September 2019
Mortgage/Mezzanine Loan	30,494		—		38,934		33,682		January 2020
Mezzanine Loan⁽¹¹⁾	6,794		537,748		72,597		125,911		January 2020
Mezzanine Loan	7,164		33,587		10,988		—		July 2020
Jr. Mortgage Participation/Mezzanine Loan	—		60,000		15,627		15,606		July 2021
Mezzanine Loan	—		280,000		34,124		—		August 2022
Mezzanine Loan⁽¹²⁾	—		—		—		15,369
Mortgage/ Mezzanine Loan⁽⁶⁾	—		—		—		32,847
Mortgage/Mezzanine Loan⁽⁶⁾	—		—		—		22,959
Mezzanine Loan⁽¹³⁾	—		—		—		14,957
Mortgage/Mezzanine Loan⁽¹⁴⁾	—		—		—		145,239
Total floating rate	$	181,320	$	3,498,215	$	1,243,925	$	1,232,178
Total	$	181,320	$	7,115,310	$	1,876,759	$	1,592,537


(1)	Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.


(2)	Represents contractual maturity, excluding any unexercised extension options.

(3)

These loans were purchased at par in April and May 2017 and were in maturity default at the time of acquisition. At the time the loans were purchased, the Company expected to collect all contractually required payments, including interest. In August 2017, the Company determined that it was probable that the loans would not be repaid in full and therefore, the loans were put on non-accrual status. No impairment was recorded as the Company believes that the fair value of the property exceeds the carrying amount of the loans. The loans had an outstanding balance including accrued interest of $259.3 million at the time that they were put on non-accrual status.


(4)	In September 2014, we acquired a $26.4 million mortgage loan at a $0.2 million discount and a $5.7 million junior mortgage participation at a $5.7 million discount. The junior mortgage participation was a nonperforming loan at acquisition, is currently on non-accrual status and has no carrying value.


(5)	Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $1.2 million, (b) $12.0 million, (c) $14.6 million, (d) $14.1 million, (e) $5.1 million, and (f) $21.2 million


(6)	This loan was repaid in June 2017.


(7)	This loan was repaid in March 2017.


(8)	This loan was extended in October 2017.


(9)	This loan was extended in January 2017.


(10)	This loan was extended in September 2017.


(11)	$66.1 million of outstanding principal was syndicated in February 2017.


(12)	This loan was repaid in September 2017.


(13)	This loan was contributed to a joint venture in May 2017.


(14)	This loan was repaid in January 2017.

Summary of preferred equity investments

As of September 30, 2017 and December 31, 2016, we held the following preferred equity investments with an aggregate weighted average current yield of 6.98% at September 30, 2017 (in thousands):



Type	September 30, 2017 Future Funding Obligations		September 30, 2017 Senior Financing		September 30, 2017 Carrying Value ⁽¹⁾		December 31, 2016 Carrying Value ⁽¹⁾		Mandatory Redemption ⁽²⁾
Preferred Equity⁽³⁾	$	—	$	272,000	$	143,980	$	—	April 2021
Preferred Equity⁽⁴⁾	—		—		—		9,982
Preferred Equity⁽⁵⁾	—		—		—		37,893
Total	$	—	$	272,000	$	143,980	$	47,875


(1)	Carrying value is net of deferred origination fees.


(2)	Represents contractual maturity, excluding any unexercised extension options.

(3)

In February 2016, we closed on the sale of 885 Third Avenue and retained a preferred equity position in the property. The sale did not meet the criteria for sale accounting under the full accrual method in ASC 360-20, Property, Plant and Equipment - Real Estate Sales. As a result the property remained on our consolidated balance sheet until the criteria was met in April 2017 at which time the property was deconsolidated and the preferred equity investment was recognized.


(4)	This investment was redeemed in May 2017.


(5)	This investment was redeemed in April 2017.