Loans and Investments (Tables)

9 Months Ended

Sep. 30, 2022

Loans and Investments

Schedule of Structured Business loan and investment portfolio

Our Structured Business loan and investment portfolio consists of ($ in thousands):

								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	September 30, 2022		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)
Bridge loans (4)	$	14,618,526	98	%	693	6.90	%	21.9	0	%	76	%
Mezzanine loans		187,388	1	%	37	7.86	%	60.0	40	%	80	%
Preferred equity investments		147,615	1	%	9	5.51	%	32.4	58	%	87	%
Other loans (5)		36,114	<1	%	3	7.49	%	35.7	0	%	58	%
		14,989,643	100	%	742	6.90	%	22.5	1	%	76	%
Allowance for credit losses		(122,296)
Unearned revenue		(75,921)
Loans and investments, net	$	14,791,426

	December 31, 2021
Bridge loans (4)	$	11,750,710	97	%	528	4.19	%	23.8	0	%	76	%
Mezzanine loans		223,378	2	%	39	7.32	%	56.3	34	%	84	%
Preferred equity investments		155,513	1	%	11	5.57	%	38.0	58	%	87	%
Other loans (5)		29,394	<1	%	2	4.63	%	48.1	0	%	67	%
		12,158,995	100	%	580	4.26	%	24.6	1	%	76	%
Allowance for credit losses		(113,241)
Unearned revenue		(64,706)
Loans and investments, net	$	11,981,048

(1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “accrual rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

(4) At September 30, 2022 and December 31, 2021, bridge loans included 215 and 120, respectively, of SFR loans with a total gross loan commitment of $1.42 billion and $804.6 million, respectively, of which $825.8 million and $408.2 million, respectively, was funded.

(5) At September 30, 2022 and December 31, 2021, other loans included 3 and 2 variable rate SFR permanent loans , respectively.

Summary of the loan portfolio's internal risk ratings and LTV ratios by asset class

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at September 30, 2022 is as follows ($ in thousands):

																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2022		2021		2020		2019		2018		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	278,255	$	302,181	$	5,935	$	38,375	$	—	$	20,300	$	645,046
Pass/Watch		3,208,311		4,006,812		599,665		279,891		41,650		—		8,136,329
Special Mention		1,132,268		3,354,479		197,450		91,917		64,000		7,594		4,847,708
Substandard		—		10,125		52,350		40,325		—		—		102,800
Total Multifamily	$	4,618,834	$	7,673,597	$	855,400	$	450,508	$	105,650	$	27,894	$	13,731,883		1	%	77	%
Single-Family Rental:												Percentage of portfolio		92	%
Pass	$	1,133	$	14,459	$	8,886	$	—	$	—	$	—	$	24,478
Pass/Watch		341,478		325,308		121,458		20,270		—		—		808,514
Special Mention		—		5,336		23,557		—		—		—		28,893
Total Single-Family Rental	$	342,611	$	345,103	$	153,901	$	20,270	$	—	$	—	$	861,885		0	%	63	%
Land:												Percentage of portfolio		6	%
Special Mention	$	—	$	—	$	8,100	$	—	$	—	$	—	$	8,100
Substandard		—		—		—		—		—		127,928		127,928
Total Land	$	—	$	—	$	8,100	$	—	$	—	$	127,928	$	136,028		0	%	97	%
Office:												Percentage of portfolio		1	%
Pass/Watch	$	—	$	—	$	—	$	—	$	44,015	$	—	$	44,015
Special Mention		—		—		35,410		—		—		—		35,410
Total Office	$	—	$	—	$	35,410	$	—	$	44,015	$	—	$	79,425		0	%	87	%
Healthcare:												Percentage of portfolio		1	%
Pass/Watch	$	—	$	—	$	—	$	14,558	$	—	$	—	$	14,558
Special Mention		—		—		—		51,069		—		—		51,069
Total Healthcare	$	—	$	—	$	—	$	65,627	$	—	$	—	$	65,627		0	%	77	%
Student Housing:												Percentage of portfolio		< 1	%
Pass	$	—	$	25,700	$	—	$	—	$	—	$	—	$	25,700
Substandard		—		—		20,500		—		—		—		20,500
Total Student Housing	$	—	$	25,700	$	20,500	$	—	$	—	$	—	$	46,200		33	%	76	%
Hotel:												Percentage of portfolio		< 1	%
Substandard	$	—	$	—	$	—	$	40,850	$	—	$	—	$	40,850
Total Hotel	$	—	$	—	$	—	$	40,850	$	—	$	—	$	40,850		0	%	70	%
Retail:												Percentage of portfolio		< 1	%
Pass	$	—	$	—	$	—	$	4,000	$	—	$	—	$	4,000
Substandard		—		—		—		—		18,600		3,445		22,045
Total Retail	$	—	$	—	$	—	$	4,000	$	18,600	$	3,445	$	26,045		12	%	71	%
Other:												Percentage of portfolio		< 1	%
Doubtful	$	—	$	—	$	—	$	—	$	—	$	1,700	$	1,700
Total Other	$	—	$	—	$	—	$	—	$	—	$	1,700	$	1,700		63	%	63	%
												Percentage of portfolio		< 1	%
Grand Total	$	4,961,445	$	8,044,400	$	1,073,311	$	581,255	$	168,265	$	160,967	$	14,989,643		1	%	76	%

Summary of the changes in the allowance for credit losses

A summary of the changes in the allowance for credit losses is as follows (in thousands):

	Three Months Ended September 30, 2022
	Land		Multifamily		Office		Retail		Student Housing		Hotel		Healthcare		Other		Total
Allowance for credit losses:
Beginning balance	$	77,918	$	27,958	$	7,031	$	5,819	$	161	$	16	$	3	$	2,425	$	121,331
Provision for credit losses (net of recoveries)		(8)		(675)		306		—		14		2		1		1,325		965
Ending balance	$	77,910	$	27,283	$	7,337	$	5,819	$	175	$	18	$	4	$	3,750	$	122,296

	Three Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance	$	78,057	$	30,160	$	7,822	$	13,819	$	2,365	$	225	$	3,866	$	2,133	$	138,447
Provision for credit losses (net of recoveries)		(45)		(2,093)		(95)		—		(542)		(209)		(3,851)		(78)		(6,913)
Ending balance	$	78,012	$	28,067	$	7,727	$	13,819	$	1,823	$	16	$	15	$	2,055	$	131,534

	Nine Months Ended September 30, 2022
Allowance for credit losses:
Beginning balance	$	77,970	$	18,707	$	8,073	$	5,819	$	636	$	8	$	8	$	2,020	$	113,241
Provision for credit losses (net of recoveries)		(60)		8,576		(736)		—		(461)		10		(4)		1,730		9,055
Ending balance	$	77,910	$	27,283	$	7,337	$	5,819	$	175	$	18	$	4	$	3,750	$	122,296

	Nine Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance	$	78,150	$	36,468	$	1,846	$	13,861	$	4,078	$	7,759	$	3,880	$	2,287	$	148,329
Provision for credit losses (net of recoveries)		(138)		(8,401)		5,881		(42)		(2,255)		(7,743)		(3,865)		(232)		(16,795)
Ending balance	$	78,012	$	28,067	$	7,727	$	13,819	$	1,823	$	16	$	15	$	2,055	$	131,534

Summary of our loans considered impaired by asset class

A summary of our specific loans considered impaired by asset class is as follows (in thousands):

	September 30, 2022
							Wtd. Avg. First		Wtd. Avg. Last
			Carrying		Allowance for		Dollar LTV		Dollar LTV
Asset Class	UPB (1)		Value		Credit Losses		Ratio		Ratio
Land	$	134,215	$	127,868	$	77,869	0	%	99	%
Retail		22,045		17,563		5,817	14	%	79	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	157,960	$	147,131	$	85,386	3	%	96	%

	December 31, 2021
Land	$	134,215	$	127,868	$	77,869	0	%	99	%
Retail		22,045		17,291		5,817	14	%	77	%
Office		1,980		1,980		1,500	0	%	51	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	159,940	$	148,839	$	86,886	3	%	95	%

(1) Represents the UPB of seven and eight impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2022 and December 31, 2021, respectively.

Summary of our non-performing loans by asset class

A summary of our non-performing loans by asset class is as follows (in thousands):

	September 30, 2022						December 31, 2021
			Less Than		Greater Than				Less Than		Greater Than
			90 Days		90 Days				90 Days		90 Days
	UPB		Past Due		Past Due		UPB		Past Due		Past Due
Student Housing	$	20,500	$	—	$	20,500	$	21,500	$	—	$	21,500
Retail		3,445		—		3,445		920		—		920
Commercial		1,700		—		1,700		1,700		—		1,700
Total	$	25,645	$	—	$	25,645	$	24,120	$	—	$	24,120