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Debt and Preferred Equity Investments (Tables)
 12 Months Ended
Dec. 31, 2022
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, 2022 and 2021 (in thousands):
December 31, 2022December 31, 2021
Balance at beginning of year (1)
$1,088,723 $1,076,542 
Debt investment originations/fundings/accretion (2)
62,992 193,824 
Preferred equity investment originations/accretion (2)
37,505 13,220 
Redemptions/sales/syndications/equity ownership/amortization(565,940)(201,446)
Net change in loan loss reserves— 6,583 
Balance at end of period (1)
$623,280 $1,088,723 
(1)Net of unamortized fees, discounts, and premiums.
(2)Accretion includes amortization of fees and discounts and paid-in-kind investment income.
Schedule of debt
Below is a summary of our debt and preferred equity investments as of December 31, 2022 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior Financing
Maturity(1)
TypeCarrying ValueFace ValueInterest RateCarrying ValueFace ValueInterest Rate
Mezzanine Debt$144,056 $144,402 
L + 4.95 - 12.38%
$359,366 $367,461 
7.00 - 14.30%
$503,422 $1,691,780  2023 - 2029
Preferred Equity— — —119,858 119,858 
  6.50%
119,858 250,000 2027
Balance at end of period$144,056 $144,402 $479,224 $487,319 $623,280 $1,941,780 
(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 roll forward of our total allowance for loan losses for the years ended December 31, 2022, 2021 and 2020 (in thousands):
December 31,
202220212020
Balance at beginning of year$6,630 $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— (6,583)(37,033)
Balance at end of period (1)
$6,630 $6,630 $13,213 
(1)As of December 31, 2022, 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, 2022 and 2021, we held the following debt investments with an aggregate weighted average current yield of 6.46%, as of December 31, 2022 (dollars in thousands):
Loan TypeDecember 31, 2022
Future Funding
Obligations		December 31, 2022
Senior
Financing
December 31, 2022
Carrying Value (1)
December 31, 2021
Carrying Value (1)

Maturity
Date (2)
Fixed Rate Investments:
Mezzanine Loan (3)
$— $401,269 $225,367 $225,367 June 2023
Mezzanine Loan— 283,293 77,109 66,873 June 2023
Mezzanine Loan (4)(5)
— 105,000 13,366 13,366 June 2024
Mezzanine Loan— 95,000 30,000 30,000 January 2025
Mezzanine Loan — 85,000 20,000 20,000 December 2029
Mezzanine Loan— — — 43,521 
Mortgage Loan— — — 73,000 
Mezzanine Loan (6)
— — — 55,250 
Total fixed rate$— $969,562 $365,842 $527,377  
Floating Rate Investments:
Mezzanine Loan$— $275,000 $50,000 $49,998 April 2023
Mezzanine Loan3,761 54,000 8,243 8,050 May 2023
Mezzanine Loan17,924 207,134 46,884 30,802 May 2023
Mezzanine Loan— 186,084 39,083 37,511 July 2023
Mezzanine Loan (7)
— — — 133,735 
Mortgage and Mezzanine Loan— — — 34,874 
Total floating rate$21,685 $722,218 $144,210 $294,970  
Allowance for loan loss$— $— $(6,630)$(6,630)
Total$21,685 $1,691,780 $503,422 $815,717 
(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, 2022. 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 a $12.0 million participation that was sold and did not meet the conditions for sale accounting, which is included in Other assets and Other liabilities on the consolidated balance sheets as a result.
(5)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of December 31, 2022. 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)In September 2022, the Company successfully acquired full ownership and control of the property at 245 Park Avenue. See below table and Note 3, "Property Acquisitions."
(7)In September 2022, the Company converted its mezzanine loan position secured by the equity interest in 5 Times Square to an equity interest in a joint venture partnership with the existing equity holders. See Note 6, " Investments in Unconsolidated Joint Ventures."
Summary of preferred equity investments
As of December 31, 2022 and 2021, we held the following preferred equity investments with an aggregate weighted average current yield of 6.55% as of December 31, 2022 (dollars in thousands):
TypeDecember 31, 2022
Future Funding
Obligations		December 31, 2022
Senior
Financing
December 31, 2022
Carrying Value (1)
December 31, 2021
Carrying Value (1)

Mandatory
Redemption (2)
Preferred Equity $— $250,000 $119,858 $112,234 February 2027
Preferred Equity (3)
— — — 160,772 
Total Preferred Equity$— $250,000 $119,858 $273,006  
Allowance for loan loss$— $— $— $— 
Total$— $250,000 $119,858 $273,006 
(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. On July 8, 2022, certain of the debtors and affiliates of SL Green entered into the Plan, pursuant to which SL Green became the stalking horse bidder for the property. Since the debtors did not receive any qualifying bids for the property and the Plan was confirmed, SL Green acquired full ownership and control of the property in September 2022, at which time our outstanding preferred equity and accrued interest balance were credited to our equity investment in the property. See Note 3, "Property Acquisitions."
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, 2022 and 2021 (dollars in thousands):
Risk RatingDecember 31, 2022December 31, 2021
1 - Low Risk Assets - Low probability of loss
$264,069 $644,489 
2 - Watch List Assets - Higher potential for loss
352,321 437,344 
3 - High Risk Assets - Loss more likely than not
6,890 6,890 
$623,280 $1,088,723 
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, 2022 (dollars in thousands):
As of December 31,
Risk Rating
2022(1)
2021(1)
2020(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$— $— $174,985 $89,084 $264,069 
2 - Watch List Assets - Higher potential for loss
— 77,109 — 275,212 352,321 
3 - High Risk Assets - Loss more likely than not
— — — 6,890 6,890 
$— $77,109 $174,985 $371,186 $623,280 
(1) Year in which the investment was originated or acquired by us or in which a material modification occurred.