Investment in Unconsolidated Entities

6 Months Ended

Jun. 30, 2019

Investment in Unconsolidated Entities

7. Investment in Unconsolidated Entities

The table below summarizes our investments in unconsolidated entities as of June 30, 2019 and December 31, 2018 (dollars in thousands):


	Participation /	Carrying value as of
	Ownership % (1)	June 30, 2019		December 31, 2018
Equity method:
Retail Fund	33%	$	71,601	$	114,362
Investor entity which owns equity in an online real estate company	50%		9,387		9,372
Equity interests in commercial real estate	50%		2,366		6,294
Equity interest in and advances to a residential mortgage originator (2)	N/A		9,167		9,082
Various	25% - 50%		7,673		6,984
			100,194		146,094
Other:
Equity interest in a servicing and advisory business (3)	4%		—		6,207
Investment funds which own equity in a loan servicer and other real estate assets	4% - 6%		9,225		9,225
Various	0% - 3%		10,457		10,239
			19,682		25,671
		$	119,876	$	171,765

(1)	None of these investments are publicly traded and therefore quoted market prices are not available.

(2)	Includes a $2.0 million subordinated loan the Company funded in June 2018.

(3)	During the three months ended June 30, 2019, we received a capital distribution of $8.4 million and our equity interest was reduced to 4%.

We own a 33% equity interest in a fund that owns four regional shopping malls (the “Retail Fund”), an investment company that measures its assets at fair value on a recurring basis. We report our interest in the Retail Fund on a three-month lag basis at its liquidation value. During the period included in our six months ended June 30, 2019, the Retail Fund reported unrealized decreases in the fair value of its real estate properties, which resulted in a $45.2 million decrease to our investment. This amount was recognized within loss from unconsolidated entities in our condensed consolidated statement of operations during the six months ended June 30, 2019.

As of June 30, 2019, the carrying value of our equity investment in a residential mortgage originator exceeded the underlying equity in net assets of such investee by $1.6 million. This difference is the result of the Company recording its investment in the investee at its acquisition date fair value, which included certain non-amortizing intangible assets not recognized by the investee. Should the Company determine these intangible assets held by the investee are impaired, the Company will recognize such impairment loss through earnings from unconsolidated entities in our consolidated statement of operations, otherwise, such difference between the carrying value of our equity investment in the residential mortgage originator and the underlying equity in the net assets of the residential mortgage originator will continue to exist. Other than our equity interest in the residential mortgage originator, there were no differences between the carrying value of our equity method investments and the underlying equity in the net assets of the investees as of June 30, 2019.

During the three and six months ended June 30, 2019, we did not become aware of any observable price changes in our other investments accounted for under the fair value practicability exception (whereby we measure those investments at cost, less impairment, plus or minus observable price changes) or any indicators of impairment.