XML 37 R22.htm IDEA: XBRL DOCUMENT v3.24.3
Debt and Preferred Equity Investments
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Debt and Preferred Equity Investments Debt and Preferred Equity Investments
Below is a summary of the activity in our consolidated debt and preferred equity investments for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Balance at beginning of year (1)
$346,745 $623,280 
Debt investment originations/fundings/accretion (2)
5,334 72,160 
Preferred equity investment originations/accretion (2) (3)
6,474 8,142 
Redemptions/sales/syndications/equity ownership/amortization(64,629)(349,947)
Net change in loan loss reserves— (6,890)
Balance at end of period (1) (4)
$293,924 $346,745 
(1)Net of unamortized fees, discounts, and premiums.
(2)Accretion includes amortization of fees and discounts and paid-in-kind investment income.
(3)Excludes a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet. See Note 6, "Investments in Unconsolidated Joint Ventures."
(4)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio.
Below is a summary of our consolidated debt and preferred equity investments as of September 30, 2024 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior Financing
Maturity (2)
TypeCarrying ValueFace Value
Interest Rate (1)
Carrying ValueFace ValueInterest Rate
Mezzanine Debt$109,450 $109,604 
S + 5.00% - 12.11%
$50,000 $50,000 
8.00% - 8.40%
$159,450 (3)$804,021 2024 - 2029
Preferred Equity (4)
— — —134,474 134,474 6.5%134,474 250,000 2027
Balance at end of period$109,450 $109,604 $184,474 $184,474 $293,924 $1,054,021 
(1)Floating interest rates are presented with the stated spread over Term SOFR ("S").
(2)Excludes available extension options to the extent they have not been exercised as of the date of this filing.
(3)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio.
(4)Excludes a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet. See Note 6, "Investments in Unconsolidated Joint Ventures."
The following table is a roll forward of our total allowance for loan losses for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Balance at beginning of year$13,520 $6,630 
Current period provision for loan loss— 6,890 
Balance at end of period (1)
$13,520 $13,520 
(1)As of September 30, 2024, all debt and preferred equity investments on non-accrual had an allowance for loan loss except for one debt investment with a carrying value of $49.8 million, which is included in the Company's alternative strategy portfolio.

As of September 30, 2024, two investments that are in the Company's alternative strategy portfolio and have a total carrying value, net of reserves, of $49.8 million were not performing in accordance with their respective terms. As of December 31, 2023, the same two investments with a total carrying value, net of reserves, of $49.8 million were not performing in accordance with their respective terms. This is further discussed in the Debt Investments and Preferred Equity Investments tables below.
No other financing receivables were 90 days past due as of September 30, 2024 and December 31, 2023.
The following table sets forth the carrying value of our consolidated debt and preferred equity investment portfolio by risk rating as of September 30, 2024 and December 31, 2023 (dollars in thousands):
Risk RatingSeptember 30, 2024December 31, 2023
1 - Low Risk Assets - Low probability of loss
$154,474 $210,333 
2 - Watch List Assets - Higher potential for loss (1)
139,450 136,412 
3 - High Risk Assets - Loss more likely than not— — 
$293,924 $346,745 
(1)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio.
The following table sets forth the carrying value of our consolidated debt and preferred equity investment portfolio by year of origination and risk rating as of September 30, 2024 (dollars in thousands):
As of September 30, 2024
Risk Rating
2024 (1)
2023 (1)
2022 (1)
Prior (1)
Total
1 - Low Risk Assets - Low probability of loss
$— $— $— $154,474 $154,474 
2 - Watch List Assets - Higher potential for loss
— — — 139,450 (2)139,450 
3 - High Risk Assets - Loss more likely than not
— — — — — 
$— $— $— $293,924 $293,924 
(1)Year in which the investment was originated or acquired by us or in which a material modification occurred.
(2)Includes two investments with a total carrying value of $49.8 million that are included in the Company's alternative strategy portfolio.
We have determined that we have one portfolio segment of financing receivables as of September 30, 2024 and December 31, 2023 comprised of commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in Other assets is an additional amount of financing receivables representing loans to joint venture partners totaling $10.9 million and $8.8 million as of September 30, 2024 and December 31, 2023, respectively. The Company recorded no provisions for loan losses related to these financing receivables for the nine months ended September 30, 2024 and 2023. All of these loans have a risk rating of 2 and were performing in accordance with their respective terms.
Debt Investments
    As of September 30, 2024 and December 31, 2023, we held the following consolidated debt investments with an aggregate weighted average current yield of 6.32% as of September 30, 2024 (dollars in thousands):
Loan TypeSeptember 30, 2024
Future Funding
Obligations		September 30, 2024 Senior
Financing
September 30, 2024
Carrying Value (1)
December 31, 2023
Carrying Value (1)
Maturity
Date (2)
Fixed Rate Investments:
Mezzanine Loan (3) (4) (6)
$— $105,000 $13,366 $13,366 October 2024
Mezzanine Loan— 95,000 30,000 30,000 January 2025
Mezzanine Loan— 85,000 20,000 20,000 December 2029
Total fixed rate$— $285,000 $63,366 $63,366  
Floating Rate Investments:
Mezzanine Loan (5) (6)
$— $275,000 $50,000 $50,000 April 2023
Mezzanine Loan— 54,000 8,620 8,243 January 2025
Mezzanine Loan8,099 190,021 50,984 48,323 January 2026
Mezzanine Loan— — — 62,333 May 2024
Total floating rate$8,099 $519,021 $109,604 $168,899  
Allowance for loan loss $— $— $(13,520)$(13,520)
Total$8,099 $804,021 $159,450 $218,745 
(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)Carrying value is net of a $12.0 million participation that was sold and did not meet the conditions for sale accounting. That participation is included in Other assets and Other liabilities on the consolidated balance sheets as a result.
(4)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of September 30, 2024. No investment income has been recognized subsequent to it being put on non-accrual. In the first quarter of 2023, the Company fully reserved the balance of the investment. Additionally, we determined the borrower entity to be a VIE, in which we are not the primary beneficiary.
(5)This loan went into default and was put on non-accrual in January 2023 and remains on non-accrual as of September 30, 2024. No investment income has been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower with respect to the loan.
(6)Included in the Company's alternative strategy portfolio.
Preferred Equity Investments
As of September 30, 2024 and December 31, 2023, we held the following consolidated preferred equity investment with an aggregate weighted average current yield of 6.55% as of September 30, 2024 (dollars in thousands), excluding a $209.9 million preferred equity investment that is included in Investment in unconsolidated joint ventures in our consolidated balance sheet:
TypeSeptember 30, 2024
Future Funding
Obligations		September 30, 2024 Senior
Financing
September 30, 2024
Carrying Value (1)
December 31, 2023
Carrying Value (1)
Mandatory Redemption (2)
Preferred Equity$— $250,000 $134,474 $128,000 February 2027
Allowance for loan loss $— $— $— $— 
Total$— $250,000 $134,474 $128,000 
(1)Carrying value is net of deferred origination fees.
(2)Represents contractual redemption, excluding any unexercised extension options.