XML 68 R48.htm IDEA: XBRL DOCUMENT v3.22.0.1
Debt and Preferred Equity Investments (Tables)
 12 Months Ended
Dec. 31, 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 years ended December 31, 2021 and 2020 (in thousands):
December 31, 2021December 31, 2020
Balance at beginning of year (1)
$1,076,542 $1,580,306 
Debt investment originations/fundings/accretion (2)
193,824 389,300 
Preferred equity investment originations/accretion (2)
13,220 167,042 
Redemptions/sales/syndications/equity ownership/amortization (3)
(201,446)(1,048,643)
Net change in loan loss reserves6,583 (11,463)
Balance at end of period (1)
$1,088,723 $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 December 31, 2021 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior Financing
Maturity(1)
TypeCarrying ValueFace ValueInterest RateCarrying ValueFace ValueInterest Rate
Senior Mortgage Debt$22,646 $22,841 
L + 3.50 - 3.50%
$73,000 $73,000 3.00%$95,646 $—  2022 - 2023
Mezzanine Debt272,324 273,274 
L + 5.00 - 12.57%
447,747 457,474 
2.90 - 14.30%
720,071 4,664,200  2022 - 2029
Preferred Equity— — —273,006 273,821 
6.50 - 11.00%
273,006 1,962,750  2022 - 2027
Balance at end of period$294,970 $296,115 $793,753 $804,295 $1,088,723 $6,626,950 
(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 years ended December 31, 2021, 2020 and 2019 (in thousands):
December 31,
202120202019
Balance at beginning of year$13,213 $1,750 $5,750 
Cumulative adjustment upon adoption of ASC 326— 27,803 — 
Current period provision for loan loss— 20,693 — 
Write-offs charged against the allowance (1)
(6,583)(37,033)(4,000)
Balance at end of period (2)
$6,630 $13,213 $1,750 
(1)Includes $0.0 million and $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2021 and 2020, respectively. These charges are included in loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations.
(2)As of December 31, 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.
Summary of debt investments
As of December 31, 2021 and 2020, we held the following debt investments with an aggregate weighted average current yield of 6.52%, as of December 31, 2021 (dollars in thousands):
Loan TypeDecember 31, 2021
Future Funding
Obligations		December 31, 2021
Senior
Financing
December 31, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)

Maturity
Date (2)
Fixed Rate Investments:
Mezzanine Loan$— $280,000 $43,521 $41,057 August 2022
Mortgage Loan— — 73,000 — April 2023
Mezzanine Loan (3)
— 376,705 225,367 225,204 June 2023
Mezzanine Loan— 274,976 66,873 — June 2023
Mezzanine Loan (4a)(5)
— 105,000 13,366 13,366 June 2024
Mezzanine Loan— 95,000 30,000 30,000 January 2025
Mezzanine Loan (6)
— 1,712,750 55,250 55,250 June 2027
Mezzanine Loan— 85,000 20,000 20,000 December 2029
Junior Mortgage— — — 32,888 
Mezzanine Loan— — — 3,500 
Mortgage/Mezzanine Loan— — — 56,244 
Total fixed rate$— $2,929,431 $527,377 $477,509  
Floating Rate Investments:
Mezzanine Loan$— $275,000 $49,998 $49,956 April 2022
Mezzanine Loan4,933 180,415 37,511 35,318 July 2022
Mezzanine Loan (4b)
— 1,115,000 133,735 127,915 March 2022
Mezzanine Loan3,932 54,000 8,050 6,858 May 2022
Mortgage and Mezzanine Loan23,360 — 34,874 14,011 December 2022
Mezzanine Loan43,415 110,354 30,802 19,889 May 2023
Junior Mortgage Participation/Mezzanine Loan— — — 15,733 
Mezzanine Loan— — — 29,106 
Mortgage Loan— — — 53,674 
Total floating rate$75,640 $1,734,769 $294,970 $352,460  
Allowance for loan loss$— $— $(6,630)$(13,213)
Total$75,640 $4,664,200 $815,717 $816,756 
(1)Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
(2)Represents contractual maturity, excluding any extension options to the extent they have not been exercised as of the date of this filing.
(3)This loan was put on non-accrual in July 2020 and remains on non-accrual as of December 31, 2021. No investment income has been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower.
(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, and (b) $0.4 million.
(5)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of December 31, 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 in which we are not the primary beneficiary.
(6)The borrower under this mezzanine loan is an entity affiliated with HNA, which owns an equity interest in 245 Park Avenue. The borrower filed for bankruptcy protection on October 31, 2021, which the Company contested.
Summary of preferred equity investments
As of December 31, 2021 and 2020, we held the following preferred equity investments with an aggregate weighted average current yield of 9.87% as of December 31, 2021 (dollars in thousands):
TypeDecember 31, 2021
Future Funding
Obligations		December 31, 2021
Senior
Financing
December 31, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)

Mandatory
Redemption (2)
Preferred Equity (3)
$— $1,712,750 $160,772 $154,691 June 2022
Preferred Equity— 250,000 112,234 105,095 February 2027
Total Preferred Equity$— $1,962,750 $273,006 $259,786  
Allowance for loan loss$— $— $— $— 
Total$— $1,962,750 $273,006 $259,786 
(1)Carrying value is net of deferred origination fees.
(2)Represents contractual redemption, excluding any unexercised extension options.
(3)On October 31, 2021, HNA, through an affiliated entity, filed for Chapter 11 bankruptcy protection on account of its investment in 245 Park Avenue, together with another asset in Chicago. The Company contested the filing, on the basis that the filing was done in bad faith and in violation of HNA's agreements with the Company, and is currently appealing the Bankruptcy court’s ruling upholding the filing by HNA.
Schedule of Investment In Financing Receivables And Risk Rating
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of December 31, 2021 and 2020 ($ in thousands):
Risk RatingDecember 31, 2021December 31, 2020
1 - Low Risk Assets - Low probability of loss
$644,489 $695,035 
2 - Watch List Assets - Higher potential for loss
437,344 365,167 
3 - High Risk Assets - Loss more likely than not
6,890 16,340 
$1,088,723 $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 December 31, 2021 (dollars in thousands):
As of December 31,
Risk Rating
2021(1)
2020(1)
2019(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$139,873 $151,086 $57,511 $296,019 $644,489 
2 - Watch List Assets - Higher potential for loss
— 133,735 260,242 43,367 437,344 
3 - High Risk Assets - Loss more likely than not
— — — 6,890 6,890 
$139,873 $284,821 $317,753 $346,276 $1,088,723 
(1) Year in which the investment was originated or acquired by us or in which a material modification occurred.