Debt and Preferred Equity Investments (Tables)

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Schedule of debt and preferred equity book balance roll forward

Below is a summary of the activity relating to our debt and preferred equity investments as of December 31, 2018 and 2017 (in thousands):



	December 31, 2018			December 31, 2017
Balance at beginning of period ⁽¹⁾	$	2,114,041		$	1,640,412
Debt investment originations/accretion ⁽²⁾	834,304			1,142,591
Preferred equity investment originations/accretion ⁽²⁾	151,704			144,456
Redemptions/sales/syndications/amortization ⁽³⁾	(994,906		)	(813,418		)
Net change in loan loss reserves	(5,750		)	—
Balance at end of period ⁽¹⁾	$	2,099,393		$	2,114,041


(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 and are included in other assets and other liabilities on the consolidated balance sheets.

Summary of debt investments

As of December 31, 2018 and 2017, we held the following debt investments with an aggregate weighted average current yield of 8.99%, at December 31, 2018 (in thousands):



Loan Type	December 31, 2018 Future Funding Obligations		December 31, 2018 Senior Financing		December 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Fixed Rate Investments:
Mezzanine Loan^(3a)	$	—	$	1,160,000	$	213,185	$	204,005	March 2020
Mezzanine Loan	—		15,000		3,500		3,500		September 2021
Mezzanine Loan	—		147,000		24,932		24,913		April 2022
Mezzanine Loan	—		280,000		36,585		34,600		August 2022
Mezzanine Loan	—		85,097		12,706		12,699		November 2023
Mezzanine Loan	—		180,000		30,000		—		December 2023
Mezzanine Loan^(3b)	—		115,000		12,941		12,932		June 2024
Mezzanine Loan	—		95,000		30,000		30,000		January 2025
Mezzanine Loan	—		340,000		11,000		15,000		November 2026
Mezzanine Loan	—		1,712,750		55,250		55,250		June 2027
Mortgage/Jr. Mortgage Loan⁽⁴⁾	—		—		—		250,464
Mortgage Loan⁽⁵⁾	—		—		—		26,366
Mortgage Loan⁽⁵⁾	—		—		—		239
Total fixed rate	$	—	$	4,129,847	$	430,099	$	669,968
Floating Rate Investments:
Mezzanine Loan⁽⁶⁾	$	—	$	45,025	$	37,499	$	34,879	January 2019
Mezzanine Loan^(3c)(7)	—		85,000		15,333		15,381		March 2019
Mezzanine Loan^(3d)(7)	—		65,000		14,822		14,869		March 2019
Mezzanine Loan⁽⁸⁾	—		38,000		21,990		21,939		March 2019
Mezzanine Loan⁽⁷⁾	—		40,000		19,986		19,982		April 2019
Mezzanine Loan	—		265,000		24,961		24,830		April 2019
Mortgage/Jr. Mortgage Participation Loan	40,530		233,086		84,012		71,832		August 2019
Mezzanine Loan⁽⁷⁾⁽⁸⁾	—		65,000		14,998		14,955		August 2019
Mortgage/Mezzanine Loan⁽⁷⁾	—		—		19,999		19,940		August 2019
Mortgage/Mezzanine Loan	1,027		—		154,070		143,919		September 2019
Mezzanine Loan	—		350,000		34,886		34,737		October 2019
Mortgage/Mezzanine Loan⁽⁹⁾	7,243		—		62,493		43,845		January 2020
Mezzanine Loan⁽⁹⁾	559		575,955		79,164		75,834		January 2020
Mortgage Loan	11,204		—		88,501		—		February 2020
Mezzanine Loan	1,277		322,300		53,402		—		March 2020
Mortgage/Mezzanine Loan	14,860		—		277,694		—		April 2020
Mortgage/Mezzanine Loan⁽⁷⁾	—		—		37,094		—		June 2020
Mezzanine Loan	7,887		38,167		12,627		11,259		July 2020
Mortgage/Mezzanine Loan	—		—		83,449		—		October 2020
Mezzanine Loan	38,575		362,908		88,817		75,428		November 2020
Mortgage/Mezzanine Loan	33,131		—		98,804		88,989		December 2020
Mortgage/Mezzanine Loan	—		—		35,266		35,152		December 2020
Jr. Mortgage Participation/Mezzanine Loan	—		60,000		15,665		15,635		July 2021
Mezzanine Loan⁽⁸⁾	—		38,596		7,305		34,947		December 2021
Mortgage/Mezzanine Loan ⁽⁵⁾	—		—		—		162,553
Mortgage/Mezzanine Loan ⁽⁵⁾	—		—		—		74,755
Mortgage/Mezzanine Loan ⁽¹⁰⁾	—		—		—		23,609



Loan Type	December 31, 2018 Future Funding Obligations		December 31, 2018 Senior Financing		December 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Mortgage/Mezzanine Loan⁽⁵⁾	—		—		—		16,969
Mezzanine Loan⁽⁵⁾	—		—		—		59,723
Mezzanine Loan⁽⁵⁾	—		—		—		37,851
Mezzanine Loan⁽⁵⁾	—		—		—		14,855
Mezzanine Loan⁽¹¹⁾	—		—		—		12,174
Mezzanine Loan⁽¹¹⁾	—		—		—		10,934
Mezzanine Loan⁽⁵⁾	—		—		—		37,250
Mezzanine Loan⁽⁵⁾	—		—		—		15,148
Mezzanine Loan⁽⁵⁾	—		—		—		8,550
Mezzanine Loan⁽¹¹⁾	—		—		—		26,927
Total floating rate	$	156,293	$	2,584,037	$	1,382,837	$	1,299,650
Total	$	156,293	$	6,713,884	$	1,812,936	$	1,969,618


(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)	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) $1.3 million, (b) $12.0 million, (c) $14.6 million, and (d) $14.1 million.

(4)

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 believed that the fair value of the property exceeded the carrying amount of the loans. In May 2018, the Company was the successful bidder at the foreclosure of the asset, at which time the loans were credited to our equity investment in the property.


(5)	This loan was repaid in 2018.


(6)	As of January 2019, this loan is in maturity default. No impairment was recorded as the Company believes that the fair value of the property exceeded the carrying amount of the loans.


(7)	This loan was extended in 2018.


(8)	This loan was repaid in 2019.


(9)	This loan was modified in 2019.


(10)	This loan was sold in 2018.


(11)	In 2018, the Company accepted an assignment of the equity interests in the property in lieu of repayment of the loan, and recorded the assets received and liabilities assumed at fair value.

Summary of preferred equity investments

As of December 31, 2018 and 2017, we held the following preferred equity investments with an aggregate weighted average current yield of 9.12% at December 31, 2018 (in thousands):



Type	December 31, 2018 Future Funding Obligations		December 31, 2018 Senior Financing		December 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Mandatory Redemption ⁽²⁾
Preferred Equity⁽³⁾	$	—	$	272,000	$	143,183	$	144,423	April 2021
Preferred Equity	—		1,768,000		143,274		—		June 2022
	$	—	$	2,040,000	$	286,457	$	144,423


(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.

Rollforward of total allowance for loan loss reserves

The following table is a rollforward of our total loan loss reserves at December 31, 2018, 2017 and 2016 (in thousands):



	December 31,
	2018			2017		2016
Balance at beginning of year	$	—		$	—	$	—
Expensed	6,839			—		—
Recoveries	—			—		—
Charge-offs and reclassifications	(1,089		)	—		—
Balance at end of period	$	5,750		$	—	$	—