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Debt and Preferred Equity Investments (Tables)
 6 Months Ended
Jun. 30, 2021
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 six months ended June 30, 2021 and the twelve months ended December 31, 2020 (in thousands):
June 30, 2021December 31, 2020
Balance at beginning of year (1)
$1,076,542 $1,580,306 
Debt investment originations/fundings/accretion (2)
89,990 389,300 
Preferred equity investment originations/accretion (2)
6,469 167,042 
Redemptions/sales/syndications/equity ownership/amortization (3)
(100,290)(1,048,643)
Net change in loan loss reserves— (11,463)
Balance at end of period (1)
$1,072,711 $1,076,542 
(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 June 30, 2021 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior FinancingWeighted Average Yield at End of Period
Maturity (1)
TypeCarrying ValueFace ValueInterest RateCarrying ValueFace ValueInterest Rate
Senior Mortgage Debt$13,753 $14,048 
L + 3.50%
$1,250 $1,250 
3.50%
$15,003 $— 5.33%2021 - 2022
Junior Mortgage Debt7,213 12,000 
L + 7.25%
— — —%7,213 60,000 7.54%2021
Mezzanine Debt287,385 290,789 
L + 4.95% - 13.50%
496,855 507,842 
2.90% - 14.30%
784,240 4,737,442 6.51% 2021 - 2029
Preferred Equity— — —266,255 267,916 
6.50% - 11.00%
266,255 1,962,750 9.92% 2022 - 2027
Balance at end of period$308,351 $316,837 $764,360 $777,008 $1,072,711 $6,760,192 
(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 six months ended June 30, 2021 and the twelve months ended December 31, 2020 (in thousands):
June 30, 2021December 31, 2020
Balance at beginning of year$13,213 $1,750 
Cumulative adjustment upon adoption of ASC 326— 27,803 
Current period provision for loan loss — 20,693 
Write-offs charged against the allowance(1)
— (37,033)
Balance at end of period(2)
$13,213 $13,213 
(1)Includes $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2020. These charges are included in loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations for the year ended December 31, 2020.
(2)As of June 30, 2021, all financing receivables on non-accrual had an allowance for loan loss except for one debt investment with a carrying value of $225.4 million.
Schedule of Investment in Financing Receivables and Risk Rating
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of June 30, 2021 and December 31, 2020 (dollars in thousands):
Risk RatingJune 30, 2021December 31, 2020
1 - Low Risk Assets - Low probability of loss
$682,565 $695,035 
2 - Watch List Assets - Higher potential for loss
373,788 365,167 
3 - High Risk Assets - Loss more likely than not16,358 16,340 
$1,072,711 $1,076,542 
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by year of origination and risk rating as of June 30, 2021 (dollars in thousands):
As of June 30, 2021
Risk Rating
2021(1)
2020(1)
2019(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$62,240 $270,254 $57,148 $292,923 $682,565 
2 - Watch List Assets - Higher potential for loss
— — 246,578 127,210 373,788 
3 - High Risk Assets - Loss more likely than not
— — — 16,358 16,358 
$62,240 $270,254 $303,726 $436,491 $1,072,711 
(1) Year in which the investment was originated or acquired by us or in which a material modification occurred.
Summary of debt investments As of June 30, 2021 and December 31, 2020, we held the following debt investments with an aggregate weighted average current yield of 6.51% at June 30, 2021 (dollars in thousands):
Loan TypeJune 30, 2021
Future Funding
Obligations		June 30, 2021 Senior
Financing
June 30, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)
Maturity
Date (2)
Fixed Rate Investments:
Mortgage/Mezzanine Loan$— $— $56,248 $56,244 October 2021
Mezzanine Loan— 280,000 42,263 41,057 August 2022
Mezzanine Loan (4)
— 364,858 225,367 225,204 June 2023
Mezzanine Loan— 270,550 62,240 — June 2023
Mezzanine Loan (3a)(5)
— 105,000 13,367 13,366 June 2024
Mezzanine Loan— 95,000 30,000 30,000 January 2025
Mezzanine Loan— 1,712,750 55,250 55,250 June 2027
Mezzanine Loan— 85,000 20,000 20,000 December 2029
Junior Mortgage— — — 32,888 
Mezzanine Loan— — — 3,500 
Total fixed rate$— $2,913,158 $504,735 $477,509  
Floating Rate Investments:
Junior Mortgage Participation/Mezzanine Loan (6)
$— $60,000 $15,751 $15,733 July 2021
Mezzanine Loan (7)
— 61,744 29,153 29,106 July 2021
Mezzanine Loan— 275,000 49,994 49,956 April 2022
Mezzanine Loan5,287 179,132 37,148 35,318 July 2022
Mezzanine Loan (3b)
— 1,115,000 130,774 127,915 March 2022
Mezzanine Loan4,565 54,000 7,384 6,958 May 2022
Mortgage and Mezzanine Loan36,887 — 21,211 14,011 December 2022
Mezzanine Loan50,448 79,408 23,519 19,889 May 2023
Mortgage Loan— — — 53,574 
Total floating rate$97,187 $1,824,284 $314,934 $352,460  
Allowance for loan loss $— $— $(13,213)$(13,213)
Total$97,187 $4,737,442 $806,456 $816,756 
(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, and (b) $0.4 million.
(4)This loan was put on non-accrual in July 2020 and remains on non-accrual at June 30, 2021. No investment income has been recognized subsequent to it being put on non-accrual.
(5)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual at June 30, 2021. No investment income has been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower. Additionally, we determined the borrower entity to be a VIE which we are not the primary beneficiary.
(6)This loan is in default as of the date of this filing. The Company is in discussions with the borrower.
(7)This loan was repaid in July 2021.
Summary of preferred equity investments
As of June 30, 2021 and December 31, 2020, we held the following preferred equity investments with an aggregate weighted average current yield of 9.92% at June 30, 2021 (dollars in thousands):
TypeJune 30, 2021
Future Funding
Obligations		June 30, 2021 Senior
Financing
June 30, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)
Mandatory Redemption (2)
Preferred Equity$— $1,712,750 $157,678 $154,691 June 2022
Preferred Equity— 250,000 108,577 105,095 February 2027
Total Preferred Equity$— $1,962,750 $266,255 $259,786  
Allowance for loan loss $— $— $— $— 
Total$— $1,962,750 $266,255 $259,786 
(1)Carrying value is net of deferred origination fees.
(2)Represents contractual maturity, excluding any unexercised extension options.