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Debt and Preferred Equity Investments (Tables)
 9 Months Ended
Sep. 30, 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 nine months ended September 30, 2020 and the twelve months ended December 31, 2019 (in thousands):
September 30, 2020December 31, 2019
Balance at beginning of year (1)
$1,580,306 $2,099,393 
Debt investment originations/accretion (2)
383,365 652,866 
Preferred equity investment originations/accretion (2)
163,821 14,736 
Redemptions/sales/syndications/equity ownership/amortization (3)
(956,869)(1,190,689)
Net change in loan loss reserves(17,260)4,000 
Balance at end of period (1)
$1,153,363 $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 September 30, 2020 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior Financing
Maturity (1)
TypeCarrying ValueFace ValueInterest RateCarrying ValueFace ValueInterest Rate
Senior Mortgage Debt$62,683 $63,425
L + 2.00% - 3.50%
$1,249 $1,2503.00%$63,932 $— 2020 - 2022
Junior Mortgage Debt85,295 96,697
L + 6.00% - 7.25%
32,805 33,0006.00%$118,100 542,241 2020 - 2023
Mezzanine Debt278,726 283,336
L + 4.95% - 14.62%
436,040 447,265
2.90% - 9.30%
$714,766 4,447,803 2020 - 2029
Preferred Equity— ——256,565 259,431
6.50% - 11.00%
$256,565 1,962,750 2022 - 2027
Balance at end of period$426,704 $443,458 —$726,659 $740,946 —$1,153,363 
(1)Excludes available extension options to the extent they have not been exercised as of the date of this filing.
Allowance for Credit Losses on Financing Receivables
The following table is a rollforward of our total allowance for loan losses for the nine months ended September 30, 2020 and the twelve months ended December 31, 2019 (in thousands):
September 30, 2020December 31, 2019
Balance at beginning of year$1,750 $5,750 
Cumulative adjustment upon adoption of ASC 32627,804 — 
Current period provision for loan loss 20,741 — 
Write-offs charged against the allowance(31,285)(4,000)
Balance at end of period$19,010 $1,750 
Summary of debt investments As of September 30, 2020 and December 31, 2019, we held the following debt investments with an aggregate weighted average current yield of 6.26% at September 30, 2020 (dollars in thousands):
Loan TypeSeptember 30, 2020
Future Funding
Obligations		September 30, 2020 Senior
Financing
September 30,
2020
Carrying Value (1)
December 31, 2019
Carrying Value (1)
Maturity
Date (2)
Fixed Rate Investments:
Mortgage/Mezzanine Loan$— $63,750 $56,242 $55,573 
October 2020 (3)
Junior Mortgage(4b)
10,000 67,000 32,805 — January 2021
Loan TypeSeptember 30, 2020
Future Funding
Obligations		September 30, 2020 Senior
Financing
September 30,
2020
Carrying Value (1)
December 31, 2019
Carrying Value (1)
Maturity
Date (2)
Mezzanine Loan— 15,000 3,500 3,500 September 2021
Mezzanine Loan— 280,000 40,458 38,734 August 2022
Mezzanine Loan(5)
— 348,327 225,204 215,737 June 2023
Mezzanine Loan(4a)(6)
— 115,000 13,265 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
Mezzanine Loan— — — 24,952 
Mezzanine Loan— — — 30,000 
Mezzanine Loan— — — 12,714 
Total fixed rate$10,000 $2,781,827 $476,724 $499,410  
Floating Rate Investments:
Junior Mortgage(7)
$— $40,000 $20,000 $20,000 April 2020
Mezzanine Loan— 275,000 49,919 49,809 April 2021
Junior Mortgage Participation/Mezzanine Loan— 60,000 15,724 15,698 July 2021
Mezzanine Loan7,933 169,540 46,613 41,395 July 2021
Mezzanine Loan5,329 54,204 23,753 15,743 July 2021
Mezzanine Loan(4c)
— 1,115,000 126,486 222,775 March 2022
Mortgage/Mezzanine Loan7,425 — 60,116 — May 2022
Mortgage/Mezzanine Loan44,000 — 13,987 13,918 December 2022
Mortgage Loan(8)
35,303 375,241 63,899 — February 2023
Mezzanine Loan55,033 59,232 18,587 69,839 May 2023
Mortgage/Mezzanine Loan— — — 35,386 
Mortgage Loan— — — 19,971 
Mortgage Loan— — — 106,473 
Mezzanine Loan — — — 51,387 
Mortgage/Mezzanine Loan— — — 96,570 
Mortgage/Mezzanine Loan— — — 82,696 
Total floating rate$155,023 $2,148,217 $439,084 $841,660  
Allowance for loan loss $— $— $(19,010)$— 
Total$165,023 $4,930,044 $896,798 $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)In October 2020, this loan was extended one year to October 2021.
(4)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) $66.6 million and (c) $0.4 million.
(5)This loan is on non-accrual at September 30, 2020.
(6)This loan is in default and on non-accrual as of the date of this filing. The Company is in discussions with the borrower.
(7)As of September 30, 2020 this loan was in default and on non-accrual. In October 2020, the Company accepted a purchase in lieu of repayment and marked the assets received and liabilities assumed to fair value.
(8)This loan was sold on October 1, 2020.
Summary of preferred equity investments
As of September 30, 2020 and December 31, 2019, we held the following preferred equity investments with an aggregate weighted average current yield of 9.98% at September 30, 2020 (dollars in thousands):
TypeSeptember 30, 2020
Future Funding
Obligations		September 30, 2020 Senior
Financing
September 30,
2020
Carrying Value (1)
December 31, 2019
Carrying Value (1)
Mandatory Redemption (2)
Preferred Equity$— $1,712,750 $153,196 $98,065 June 2022
Preferred Equity— 250,000 103,369 — February 2027
Preferred Equity(3)
— — — 142,921 
Total Preferred Equity$— $1,962,750 $256,565 $240,986  
Allowance for loan loss $— $— $— $(1,750)
Total$— $1,962,750 $256,565 $239,236 
(1)Carrying value is net of deferred origination fees.
(2)Represents contractual maturity, excluding any unexercised extension options.
(3)In June 2020, we, along with the common member in the investment, amended the partnership documents related to the investment to provide us with more rights over management of the underlying property. This resulted in the investment being accounted for using the equity method. See Note 6, "Investments in Unconsolidated Joint Ventures."