Debt and Preferred Equity Investments (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018 (in thousands):



	December 31, 2019			December 31, 2018
Balance at beginning of year ⁽¹⁾	$	2,099,393		$	2,114,041
Debt investment originations/accretion ⁽²⁾	652,866			834,304
Preferred equity investment originations/accretion ⁽²⁾	14,736			151,704
Redemptions/sales/syndications/amortization ⁽³⁾	(1,190,689		)	(994,906		)
Net change in loan loss reserves	4,000			(5,750		)
Balance at end of period ⁽¹⁾	$	1,580,306		$	2,099,393


(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, but did not meet the conditions for sale accounting, are included in other assets and other liabilities on the consolidated balance sheets.

Schedule of Debt

Below is a summary of the balances relating to our debt and preferred equity investments as of December 31, 2019 (dollars in thousands):



	Floating Rate					Fixed Rate					Total Carrying Value		Senior Financing		Maturity
Type	Carrying Value		Face Value		Interest Rate	Carrying Value		Face Value		Interest Rate	Total Carrying Value		Senior Financing		Maturity
Senior Mortgage Debt	$	341,513	$342,861		L + 2.75 - 5.50%	$	1,010	$1,250		3.00%	$	342,523	$	—	2020-2022
Junior Mortgage Debt	31,960		32,000		L + 6.00 - 7.25%	—		—		—	$	31,960	100,000		2020-2021
Mezzanine Debt	245,412		247,385		L + 4.60 - 12.36%	721,175		728,138		2.90 - 10.00%	$	966,587	5,188,939		2020-2029
Preferred Equity	—		—		—	239,236		244,983		7.00 - 11.00%	$	239,236	272,000		2020-2023
Balance at end of period	$	618,885	$	622,246	—	$	961,421	$	974,371	—	$	1,580,306	$	5,560,939	—

Allowance for credit losses on financing receivables

The following table is a rollforward of our total loan loss reserves at December 31, 2019, 2018 and 2017 (in thousands):



	December 31,
	2019			2018			2017
Balance at beginning of year	$	5,750		$	—		$	—
Expensed	—			6,839			—
Recoveries	—			—			—
Charge-offs and reclassifications	(4,000		)	(1,089		)	—
Balance at end of period	$	1,750		$	5,750		$	—

Summary of debt investments

As of December 31, 2019 and 2018, we held the following debt investments with an aggregate weighted average current yield of 8.42%, at December 31, 2019 (in thousands):



Loan Type	December 31, 2019 Future Funding Obligations		December 31, 2019 Senior Financing		December 31, 2019 Carrying Value ⁽¹⁾		December 31, 2018 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Fixed Rate Investments:
Mezzanine Loan^(3a)	$	—	$	1,160,000	$	222,775	$	213,185	March 2020
Mezzanine Loan	—		15,000		3,500		3,500		September 2021
Mezzanine Loan	—		147,000		24,952		24,932		April 2022
Mezzanine Loan	—		280,000		38,734		36,585		August 2022
Mezzanine Loan	—		326,574		215,737		—		June 2023
Mezzanine Loan	—		83,790		12,714		12,706		November 2023
Mezzanine Loan	—		180,000		30,000		30,000		December 2023
Mezzanine Loan^(3b)	—		115,000		12,950		12,941		June 2024
Mezzanine Loan	—		95,000		30,000		30,000		January 2025
Mezzanine Loan	—		1,712,750		55,250		55,250		June 2027
Mezzanine Loan	—		—		—		11,000
Total fixed rate	$	—	$	4,115,114	$	646,612	$	430,099
Floating Rate Investments:
Mortgage/Mezzanine Loan⁽⁴⁾	$	2,509	$	29,420	$	82,696	$	62,493	January 2020
Mortgage/Mezzanine Loan	—		—		69,839		—		March 2020
Junior Mortgage Loan	—		40,000		20,000		19,986		April 2020
Mezzanine Loan	4,831		47,302		15,743		12,627		July 2020
Mortgage/Mezzanine Loan	—		—		19,971		19,999		August 2020
Mortgage Loan	44,737		—		106,473		88,501		September 2020
Mortgage/Mezzanine Loan	—		63,990		55,573		83,449		October 2020
Mezzanine Loan	19,212		421,938		51,387		88,817		December 2021
Mortgage/Mezzanine Loan	—		—		35,386		35,266		December 2020
Mortgage/Mezzanine Loan^(3c)	10,384		—		96,570		277,694		April 2021
Mezzanine Loan	—		275,000		49,809		24,961		April 2021
Junior Mortgage Participation/Mezzanine Loan	—		60,000		15,698		15,665		July 2021
Mezzanine Loan	12,999		151,175		41,395		—		July 2021
Mezzanine Loan	44,000		—		13,918		—		December 2022
Mezzanine Loan	—		85,000		20,000		—		December 2029
Mezzanine Loan	—		—		—		53,402
Mezzanine Loan	—		—		—		79,164
Mezzanine Loan	—		—		—		15,333



Loan Type	December 31, 2019 Future Funding Obligations		December 31, 2019 Senior Financing		December 31, 2019 Carrying Value ⁽¹⁾		December 31, 2018 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Mezzanine Loan	—		—		—		14,822
Mortgage/Mezzanine Loan	—		—		—		154,070
Mezzanine Loan	—		—		—		34,886
Mortgage/Junior Mortgage Participation Loan	—		—		—		84,012
Mortgage/Mezzanine Loan	—		—		—		37,094
Mortgage/Mezzanine Loan	—		—		—		98,804
Mezzanine Loan	—		—		—		7,305
Mezzanine Loan	—		—		—		14,998
Mezzanine Loan	—		—		—		21,990
Mezzanine Loan⁽⁵⁾	—		—		—		37,499
Total floating rate	$	138,672	$	1,173,825	$	694,458	$	1,382,837
Total	$	138,672	$	5,288,939	$	1,341,070	$	1,812,936


(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 and (c) $96.4 million


(4)	This loan was extended in January 2020.

(5)

In 2019, the Company accepted an assignment of the equity interests in the property in-lieu of repayment and marked the assets received and liabilities assumed to fair value.

Summary of preferred equity investments

As of December 31, 2019 and 2018, we held the following preferred equity investments with an aggregate weighted average current yield of 9.63% at December 31, 2019 (in thousands):



Type	December 31, 2019 Future Funding Obligations		December 31, 2019 Senior Financing		December 31, 2019 Carrying Value ⁽¹⁾		December 31, 2018 Carrying Value ⁽¹⁾		Mandatory Redemption ⁽²⁾
Preferred Equity	$	—	$	272,000	$	141,171	$	143,183	April 2021
Preferred Equity	—		1,763,529		98,065		143,274		June 2022
Total	$	—	$	2,035,529	$	239,236	$	286,457


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

(2)

Represents contractual maturity, excluding any unexercised extension options.