Goodwill and Intangibles

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Infrastructure Lending Segment

The Infrastructure Lending Segment’s goodwill of $119.4 million at both December 31, 2023 and 2022 represents the excess of consideration transferred over the fair value of net assets acquired on September 19, 2018 and October 15, 2018. The goodwill recognized is attributable to value embedded in the acquired Infrastructure Lending Segment’s lending platform and is fully tax deductible over 15 years.

As discussed in Note 2, goodwill is tested for impairment at least annually. Based on our quantitative assessment during the fourth quarter of 2023, we determined that the fair value of the Infrastructure Lending Segment reporting unit to which goodwill is attributed exceeded its carrying value including goodwill. Therefore, we concluded that the goodwill attributed to the Infrastructure Lending Segment was not impaired.

LNR Property LLC (“LNR”)

The Investing and Servicing Segment’s goodwill of $140.4 million at both December 31, 2023 and 2022 represents the excess of consideration transferred over the fair value of net assets of LNR acquired on April 19, 2013. The goodwill recognized is attributable to value embedded in LNR’s existing platform, which includes a network of commercial real estate asset managers, work-out specialists, underwriters and administrative support professionals as well as proprietary historical performance data on commercial real estate assets. The tax deductible component of this goodwill as of April 19, 2013 was $149.9 million and is deductible over 15 years.

Based on our qualitative assessment during the fourth quarter of 2023, we determined that it is not more likely than not that the fair value of the Investing and Servicing Segment reporting unit to which goodwill is attributed is less than its carrying value including goodwill. Therefore, we concluded that the goodwill attributed to the Investing and Servicing Segment was not impaired.

Intangible Assets

Servicing Rights Intangibles

In connection with the LNR acquisition, we identified domestic servicing rights that existed at the purchase date, based upon the expected future cash flows of the associated servicing contracts. As of December 31, 2023 and 2022, the balance of the domestic servicing intangible was net of $37.9 million and $39.1 million, respectively, which was eliminated in consolidation pursuant to ASC 810 against VIE assets in connection with our consolidation of securitization VIEs. Before VIE consolidation, as of December 31, 2023 and 2022, the domestic servicing intangible had a balance of $57.2 million and $56.8 million, respectively, which represents our economic interest in this asset.

Lease Intangibles

In connection with our acquisitions of commercial real estate, we recognized in-place lease intangible assets and favorable lease intangible assets associated with certain non-cancelable operating leases of the acquired properties.

The following table summarizes our intangible assets, which are comprised of servicing rights intangibles and lease intangibles, as of December 31, 2023 and 2022 (amounts in thousands):


	As of December 31, 2023						As of December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Domestic servicing rights, at fair value	$	19,384	$	—	$	19,384	$	17,790	$	—	$	17,790
In-place lease intangible assets	96,158		(67,420)		28,738		98,622		(64,246)		34,376
Favorable lease intangible assets	27,928		(11,083)		16,845		26,649		(10,042)		16,607
Total net intangible assets	$	143,470	$	(78,503)	$	64,967	$	143,061	$	(74,288)	$	68,773

The following table summarizes the activity within intangible assets for the years ended December 31, 2023 and 2022 (amounts in thousands):


	Domestic Servicing Rights		In-place Lease Intangible Assets		Favorable Lease Intangible Assets		Total
Balance as of January 1, 2022	$	16,780	$	31,991	$	14,793	$	63,564
Acquisition (1)	—		10,083		3,520		13,603
Amortization	—		(7,132)		(1,664)		(8,796)
Impairment (2)	—		(43)		(4)		(47)
Sales	—		(523)		(38)		(561)
Changes in fair value due to changes in inputs and assumptions	1,010		—		—		1,010
Balance as of December 31, 2022	$	17,790	$	34,376	$	16,607	$	68,773
Acquisition (3)	—		2,061		2,280		4,341
Amortization	—		(6,789)		(1,945)		(8,734)

Sales	—		(910)		(97)		(1,007)
Changes in fair value due to changes in inputs and assumptions	1,594		—		—		1,594
Balance as of December 31, 2023	$	19,384	$	28,738	$	16,845	$	64,967

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(1) Represents lease intangibles related to an office building in Texas that were consolidated upon exercising control over a mezzanine loan borrower’s pledged equity interests in May 2022.

(2) Impairment of intangible lease assets is recognized within other expense in our consolidated statement of operations.

(3) Represents lease intangibles related to a deed in lieu of foreclosure on a mortgage loan on the retail portion of a hotel located in Chicago in May 2023 (see Note 5).

The following table sets forth the estimated aggregate amortization of our in-place lease intangible assets and favorable lease intangible assets for the next five years and thereafter (amounts in thousands):


2024	$	7,195
2025	6,099
2026	4,573
2027	4,089
2028	3,943
Thereafter	19,684
Total	$	45,583