
	December 31, 2021			December 31, 2020
Number of loans	11			20
Number of underlying properties in development	10			14
(In thousands)
Drawn amount	$	206,270		$	290,156
Deferred loan origination fees	(1,755)			(1,194)
Allowances for expected credit losses	(8,095)			(9,067)
Carrying value	$	196,420		$	279,895

Unfunded loan commitments	$	61,952		$	44,403
Weighted average current interest, per annum (paid monthly)	8.58		%	8.50		%
Weighted average accrued interest, per annum	3.53		%	3.91		%


(In thousands)	Principal balance		Deferred loan origination fees		Allowances and CECL Reserves		Carrying value
Balances as of December 31, 2020	$	290,156	$	(1,194)	$	(9,067)	$	279,895
Loan fundings	68,943		—		—		68,943
Loan repayments	(140,094)		—		—		(140,094)
Loans and accrued interest settled through sale	(12,735)		—		202		(12,533)
Loan origination fees collected	—		(2,381)		—		(2,381)
Amortization of loan origination fees	—		1,820		—		1,820
Reserve increases due to loan originations	—		—		(1,471)		(1,471)
Net changes in reserves on existing loans or loans repaid	—		—		2,241		2,241
Balances as of December 31, 2021	$	206,270	$	(1,755)	$	(8,095)	$	196,420

Effective June 30, 2019, the Company amended and sold its senior construction loan on the 8West office development to a third party and collected a gross fee of $1.55 million from the buyer. On July 29, 2021, we sold our 8West real estate loan investment along with seven of our office properties for total consideration of $725 million.

Project/Property

Location

Maturity date

Optional extension date

Total loan commitments (in thousands)

Current / deferred interest % per annum

Hudson at Metro West

Orlando, FL

9/1/2024

3/1/2026

16,791

8.5 / 4.5

Populus at Pooler

Savannah, GA

5/27/2025

5/27/2026

15,907

8.5 / 4.25

Populus at Pooler Capital

Savannah, GA

5/27/2025

5/27/2026

1,169

8.5 / 4.25

Oxford Club Drive

Atlanta, GA

2/11/2025

2/11/2027

23,150

8.5 / 4.5

Menlo II

Jacksonville, FL

4/14/2025

4/14/2027

16,610

8.5 / 3.5

Beaver Ruin

Atlanta, GA

5/3/2025

11/3/2026

9,133

8.5 / 4.5

One Nexton

Charleston, SC

12/16/2022

n/a

6,265

11.0 / -

89,025

The Company's real estate loan investments are primarily collateralized by 100% of the membership interests of the underlying project entity, and, where considered necessary, by unconditional joint and several repayment guaranties and performance guaranties by the principal(s) of the borrowers. These guaranties generally remain in effect until the receipt of a final certificate of occupancy. All of the guaranties are subject to the rights held by the senior lender pursuant to a standard intercreditor agreement. Prepayment of the real estate loans are permitted in whole, but not in part, without the Company's consent.

The Company established total expected credit losses against its existing portfolio of real estate loan investments on January 1, 2020. In doing so, it recorded a cumulative effect reduction adjustment to retained earnings of approximately $7.4 million. For the year ended December 31, 2021, the Company recorded an aggregate net decrease in its provision for expected credit losses of approximately $1.0 million, primarily related to the repayment or sale of multiple loans, partially offset by the origination of seven new loans. The Company's total allowance for expected credit losses for the years ended December 31, 2021 and December 31, 2020 were as follows:


	For the year ended December 31,
(In thousands)	2021		2020
Allowances recorded for interest receivable:
Haven Campus Communities, LLC line of credit	$	1,644	$	1,649
Starkville real estate loan	—		652
Net increases (decreases) in current expected loss reserves on existing loans	(770)		3,802

Total allowance for expected credit losses	$	874	$	6,103

The COVID-19 pandemic has, and will continue to have, impacts upon the development activity underlying our real estate loan investments, including the availability of labor, the supply and availability of construction materials and the ability to achieve leased stabilization. The Company's Berryessa real estate loan investment carried a 4.0% final reserve ratio at December 31, 2021. The project experienced a temporary construction delay due to effects of the COVID-19 pandemic but has received its final certificates of occupancy in 2020 and was 93% leased at December 31, 2021. The Company assesses its real estate loan investment portfolio for impacts from COVID-19 at each quarter end.

Management monitors the credit quality of the obligors under each of the Company's real estate loans by tracking the timeliness of scheduled interest and principal payments relative to the due dates as specified in the loan documents, as well as draw requests on the loans relative to the project budgets. In addition, management monitors the actual progress of development and construction relative to the construction plan, as well as local, regional and national economic conditions that may bear on our current and target markets.

The Company's Starkville loan had been in default since August 20, 2019 under the terms of the underlying mezzanine loan agreement. The Company recorded a loan loss reserve related to this loan totaling $1.4 million, reducing its net investment in the Starkville loan from $7.3 million, including accrued interest of $1.2 million, to a carrying amount of $5.9 million as of December 31, 2019 and an additional $2.1 million on January 1, 2020 with the Company's adoption of ASU 2016-13. This loan was included in the sale of the Company's eight student properties that closed on November 3, 2020.

As described in note 2, the Company assesses the credit quality of its real estate loan investments by a calculated loss reserve ratio, which is an internally-developed credit quality indicator. Loss reserve ratios reflect the amount of protection afforded by the amount of equity and debt financing subordinate to the Company's position in the project; higher reserve ratios reflect a lower amount of invested dollars junior to the Company's position.


Borrower	Date of loan	Maturity date	Total loan commitments		Outstanding balance as of:				Interest rate
					December 31, 2021		December 31, 2020
			(in thousands)
Haven Campus Communities, LLC (1,2)	6/11/2014	12/31/2018	$	11,660	$	9,011	$	9,011	8	%
Oxford Capital Partners, LLC (3,4)	10/5/2015	3/15/2022	1,250		—		1,256		10	%
Oxford Capital Partners II, LLC (3,4)	3/30/2021	3/15/2022	5,300		—		—		10	%
Mulberry Development Group, LLC (5)	3/31/2016	6/30/2022	500		—		607		12	%
Unamortized loan fees					—		—

			$	18,710	$	9,011	$	10,874

(1) See related party disclosure in Note 6.
(2) The amount payable under the note is collateralized by one of the principals of the borrower's 49.49% interest in an unrelated shopping center located in Atlanta, Georgia and a personal guaranty of repayment by the principals of the borrower.
(3) The amounts payable under the terms of this revolving credit line, up to the lesser of 25% of the loan balance or $2.0 million, are collateralized by a personal guaranty of repayment by the principals of the borrower.
(4) The overall decrease in the Oxford line of credit balance is a function of an approximate $5.0 million paydown on July 31, 2020, that was required as part of the line of credit agreement whenever there is a defined Capital Transaction, generally triggered by the sale of a development property.
(5) The amounts payable under the terms of these revolving credit lines are collateralized by a personal guaranty of repayment by the principals of the borrower.

On November 20, 2018, the borrower on the Haven Campus Communities, LLC line of credit defaulted on the loan, triggering the accrual of an additional 10% default interest rate, which is incremental to the original 8% current interest rate. The amount of default interest recorded from the default date through December 31, 2021 was approximately $2.9 million. Under the terms of the loan, amounts collected are applied first to any legal costs incurred by the Company to collect amounts due on the loan; second, to pay any accrued default and current interest on the loan; and third, to repay the principal amount owed.

Based on the negotiated agreement between the Company and the borrowers, on March 27, 2019, the Company received the membership interests of the Rush student housing project in exchange for the complete settlement of the related Rush loans, which include the Haven Campus Communities Charlotte Member, LLC line of credit, the Rush mezzanine loan and the Rush member loan. Additionally, under the same agreement, the Company received payouts and credits totaling approximately $3.75 million towards the Haven Campus Communities, LLC line of credit. These amounts were applied in accordance with the terms of the line of credit. The Company retains a pledge of a 49.49% interest in an unrelated shopping center located in Atlanta, Georgia as collateral on the Haven Campus Communities, LLC line of credit, as well as personal guaranties of repayment from the principals of the borrower.

In January 2019, the Company filed a lawsuit to collect the amounts owed under the line of credit it provided to Haven Campus Communities, LLC. In September 2019, Haven Campus Communities, LLC answered the lawsuit and filed counterclaims against the Company and its affiliates. At this time, the case is in discovery, so the Company is unable to make any estimates on timing or amounts that may be collected by the Company on its Haven Campus Communities, LLC line of credit.

Additionally, in November 2020, the Company filed two lawsuits to collect past due rent owed to the Former Manager of the Company, as sub-landlord pursuant to (i) an office sublease agreement dated May 1, 2017 by and between the Former Manager and Elevation Development Group, LLC and (ii) an office sublease agreement dated October 1, 2014 by and among the Former Manager, as sub-landlord, and Haven Campus Communities, LLC and Madison Retail, LLC as sub-tenants. The Company retains partial personal guaranties of repayment from the principals of Haven Campus Communities, LLC and Madison Retail, LLC. In December 2020, the defendants answered the lawsuit and filed counterclaims against the Company and its affiliates. At this time, the case is in discovery, so the Company is unable to make any estimates on timing or amounts that may be collected by the Company on its subleases.


Interest income (in thousands)	Years ended December 31,
	2021		2020		2019
Real estate loans:
Current interest	$	23,248	$	29,557	$	34,906
Additional accrued interest	9,769		12,372		13,829
Loan origination fee amortization	1,819		1,214		1,545
Purchase option termination fee amortization	9,712		6,536		9,111
Default interest	913		1,126		1,315

Total real estate loan revenue	45,461		50,805		60,706
Bank and money market accounts	2		40		687
Agency mortgage-backed securities	—		—		95

Interest income on loans and notes receivable	$	45,463	$	50,845	$	61,488

The Company extends loans for purposes such as to partially finance the development of multifamily residential communities, to acquire land in anticipation of developing and constructing multifamily residential communities, and for other real estate or real estate related projects. Certain of these loans include characteristics such as exclusive options to purchase the project within a specific time window following project completion and stabilization, the sufficiency of the borrowers' investment at risk and the existence of payment and performance guaranties provided by the borrowers, any of which can cause the loans to create variable interests to the Company and require further evaluation as to whether the variable interest creates a VIE, which would necessitate consolidation of the project.

The Company considers the facts and circumstances pertinent to each entity borrowing under the loan, including the relative amount of financing the Company is contributing to the overall project cost, decision making rights or control held by the Company, guarantees provided by third parties, and rights to expected residual gains or obligations to absorb expected residual losses that could be significant from the project. If the Company is deemed to be the primary beneficiary of a VIE, consolidation treatment would be required.

The Company has no decision making authority or power to direct activity, except normal lender rights, which are subordinate to the rights of the senior lenders on the projects. The Company has concluded that it is not the primary beneficiary of the borrowing entities and therefore it has not consolidated these entities in its consolidated financial statements. The Company's maximum exposure to loss from these loans is their drawn amount as of December 31, 2021 of approximately $206.3 million. The maximum aggregate amount of loans to be funded as of December 31, 2021 was approximately $268.2 million, which includes approximately $62.0 million of loan committed amounts not yet funded.

The Company has evaluated its real estate loans, where appropriate, for accounting treatment as loans versus real estate development projects, as required by ASC 310. The Company evaluates the expected residual profit it expects to collect under the terms of the loan versus the expected residual profit expected to be collected by the developer (in conjunction with any equity investors, if applicable), along with the "loan versus investment" characteristics as set forth by ASC 310-25. For each loan, the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate in cases where (i) the

The Company is also subject to a geographic concentration of risk that could be considered significant with regard to the Beaver Ruin, Solis Cumming Town Center, and Oxford Club Drive real estate loan investments, all of which are partially supporting various real estate projects in or near Atlanta, Georgia. The drawn amount and outstanding accrued interest for these loans as of December 31, 2021 totaled approximately $24.6 million (with a total commitment amount of approximately $53.0 million). The event of a total failure to perform by the borrowers and guarantors would subject the Company to a total possible loss of the drawn amount and all outstanding accrued interest.

The Company is also subject to a geographic concentration of risk that could be considered significant with regard to the Vintage Horizon West, Hudson at Metro West, and Menlo II real estate loan investments, all of which are partially supporting various real estate projects in Florida. The drawn amount and outstanding accrued interest for these loans as of December 31, 2021 totaled approximately $29.5 million (with a total commitment amount of approximately $44.3 million). The event of a total failure to perform by the borrowers and guarantors would subject the Company to a total possible loss of the drawn amount and all outstanding accrued interest.

On May 23, 2018, the Company purchased a subordinate tranche of Series 2018-ML04, a pool of 20 multifamily mortgages with a total pool size of approximately $276.3 million, from Freddie Mac. The purchase price of the subordinate tranche was approximately $4.7 million. On December 10, 2019, the Company sold its investment in Series 2018-ML04 for $6.2 million.

On March 28, 2019, the Company purchased a subordinate tranche of Series 2019-ML05, a pool of 21 multifamily mortgages with a total pool size of approximately $295.7 million, from Freddie Mac. The Company's tranche of the 2019-ML05 pool paid monthly interest of approximately $103,000. The purchase price of the subordinate tranche was approximately $18.4 million. On December 17, 2019, the Company sold its investment in Series 2019-ML05 for $20.4 million.