Debt and Preferred Equity Investments (Tables)

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of debt and preferred equity book balance roll forward

Below is a summary of the activity in our debt and preferred equity investments for the three months ended March 31, 2020 and the twelve months ended December 31, 2019 (in thousands):



	March 31, 2020			December 31, 2019
Balance at beginning of year ⁽¹⁾	$	1,580,306		$	2,099,393
Debt investment originations/accretion ⁽²⁾	246,075			652,866
Preferred equity investment originations/accretion ⁽²⁾	154,710			14,736
Redemptions/sales/syndications/amortization ⁽³⁾	(161,548		)	(1,190,689		)
Net change in loan loss reserves	(36,207		)	4,000
Balance at end of period ⁽¹⁾	$	1,783,336		$	1,580,306


(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 our debt and preferred equity investments as of March 31, 2020 (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	$	372,547	$374,002		L + 2.00 - 5.50%	$	100,202	$101,250		3.00 - 6.00%	$	472,749	$	—	2020 - 2022
Junior Mortgage Debt	83,004		90,300		L + 6.00 - 7.25%	—		—		—	$	83,004	438,138		2020 - 2023
Mezzanine Debt	368,053		375,098		L + 4.95 - 15.29%	491,838		509,920		2.90 - 9.50%	$	859,891	5,169,422		2020 - 2029
Preferred Equity	—		—		—	367,692		386,953		6.50 - 11.00%	$	367,692	522,000		2020 -2027
Balance at end of period	$	823,604	$	839,400	—	$	959,732	$	998,123	—	$	1,783,336	$	6,129,560	—

Allowance for Credit Losses on Financing Receivables

The following table is a rollforward of our total allowance for loan losses for the three months ended March 31, 2020 and the twelve months ended December 31, 2019 (in thousands):



	March 31, 2020		December 31, 2019
Balance at beginning of year	$	1,750	$	5,750
Cumulative adjustment upon adoption of ASC 326	27,804		—
Current period provision for loan loss	8,403		—
Writeoffs charged against the allowance	—		(4,000		)
Balance at end of period	$	37,957	$	1,750

Summary of debt investments

As of March 31, 2020 and December 31, 2019, we held the following debt investments with an aggregate weighted average current yield of 7.87% at March 31, 2020 (dollars in thousands):



Loan Type	March 31, 2020 Future Funding Obligations		March 31, 2020 Senior Financing		March 31, 2020 Amortized Cost ⁽¹⁾			December 31, 2019 Amortized Cost ⁽¹⁾		Maturity Date ⁽²⁾
Fixed Rate Investments:
Mortgage/Mezzanine Loan	$	—	$	63,908	$	55,798		$	55,573	October 2020
Mezzanine Loan	10,000		—		99,110			—		January 2021
Mezzanine Loan	—		15,000		3,500			3,500		September 2021
Mezzanine Loan	—		147,000		24,957			24,952		April 2022
Mezzanine Loan	—		280,000		39,296			38,734		August 2022
Mezzanine Loan	—		330,204		220,420			215,737		June 2023
Mezzanine Loan	—		83,369		12,716			12,714		November 2023
Mezzanine Loan	—		180,000		30,000			30,000		December 2023
Mezzanine Loan^(3a)(4)	—		115,000		12,952			12,950		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	—		85,000		20,000			20,000		December 2029
Total fixed rate	$	10,000	$	3,107,231	$	603,999		$	499,410
Floating Rate Investments:
Mortgage/Mezzanine Loan⁽⁴⁾	—		—		70,000			69,839		March 2020
Mortgage/Mezzanine Loan⁽⁴⁾	1,618		29,053		71,964			82,696		April 2020
Junior Mortgage⁽⁴⁾	—		40,000		20,000			20,000		April 2020
Mortgage/Mezzanine Loan	—		—		19,983			19,971		August 2020
Mortgage Loan	32,972		—		118,378			106,473		September 2020
Mezzanine Loan	17,376		436,763		53,329			51,387		December 2021
Mortgage/Mezzanine Loan^(3b)	9,429		—		96,880			96,570		April 2021
Mezzanine Loan	—		275,000		49,845			49,809		April 2021
Junior Mortgage Participation/Mezzanine Loan	—		60,000		15,706			15,698		July 2021
Mezzanine Loan	11,459		156,759		42,985			41,395		July 2021
Mezzanine Loan	8,427		49,616		20,595			15,743		July 2021
Mezzanine Loan^(3c)	—		1,115,000		123,419			222,775		March 2022
Mortgage/Mezzanine Loan⁽⁵⁾	7,795		—		59,597			35,386		May 2022
Mezzanine Loan	44,000		—		13,941			13,918		December 2022
Mortgage Loan	41,700		338,138		57,349			—		February 2023
Total floating rate	$	174,776	$	2,500,329	$	833,971		$	841,660
Allowance for loan loss	$	—	$	—	$	(22,326	)	$	—
Total	$	184,776	$	5,607,560	$	1,415,644		$	1,341,070


(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) $12.0 million, (b) $96.4 million and (c) $0.4 million.


(4)	This loan is in default as of the date of this filing. The Company is in discussions with the borrower.

(5)

The original loan was repaid in February 2020 and a new loan was originated to the new owners of the underlying asset.

Summary of preferred equity investments

As of March 31, 2020 and December 31, 2019, we held the following preferred equity investments with an aggregate weighted average current yield of 9.87% at March 31, 2020 (dollars in thousands):



Type	March 31, 2020 Future Funding Obligations		March 31, 2020 Senior Financing		March 31, 2020 Amortized Cost ⁽¹⁾			December 31, 2019 Amortized Cost ⁽¹⁾			Mandatory Redemption ⁽²⁾
Preferred Equity	$	—	$	272,000	$	133,050		$	142,921		April 2021
Preferred Equity	—		1,712,750		150,273			98,065			June 2022
Preferred Equity	—		250,000		100,000			—			February 2027
Total Preferred Equity	$	—	$	2,234,750	$	383,323		$	240,986
Allowance for loan loss	$	—	$	—	$	(15,631	)	$	(1,750	)
Total	$	—	$	2,234,750	$	367,692		$	239,236


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

(2)

Represents contractual maturity, excluding any unexercised extension options.