XML 42 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Receivable and Current Expected Credit Losses (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Summary of Mezzanine Loans
The Company had the following notes receivable outstanding as of September 30, 2020 and December 31, 2019 ($ in thousands):
 
 
Outstanding loan amount
 
 
 
 
 
Interest compounding
Development Project
 
September 30,
2020
 
December 31,
2019
 
Maximum loan commitment
 
Interest rate
The Residences at Annapolis Junction
 
$
42,767

 
$
40,049

 
$
48,105

 
10.0
%
(a) 
Monthly
Delray Plaza
 
15,493

 
12,995

 
17,000

 
15.0
%
(a)(b)(c) 
Annually
Nexton Square
 
—

 
15,097

 
17,000

 
10.0
%
 
Monthly
Interlock Commercial
 
82,351

 
59,224

 
103,000

 
15.0
%
(c) 
None
Solis Apartments at Interlock
 
28,109

 
25,588

 
41,100

 
13.0
%
 
Annually
Total mezzanine
 
168,720

 
152,953

 
$
226,205

 
 
 
 
Other notes receivable
 
14

 
1,147

 
 
 
 
 
 
Notes receivable guarantee premium
 
3,034

 
5,271

 
 
 
 
 
 
Allowance for credit losses
 
(3,052
)

—

 
 
 
 
 
 
Total notes receivable
 
$
168,716

 
$
159,371

 
 
 
 
 
 

________________________________________
(a) Loan was placed on nonaccrual status effective April 1, 2020.
(b) $2.0 million of this loan is subject to an interest rate of 6%.
(c) This loan was modified on October 2, 2020. See Note 15.
Summary of Interest Income The Company recognized interest income for the three and nine months ended September 30, 2020 and 2019 as follows (in thousands):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
Development Project
 
2020
 
2019
 
2020
 
2019
 
1405 Point
 
$
—

 
$
—

 
$
—

 
$
783

 
North Decatur Square
 
—

 
178

 
—

 
1,509

 
The Residences at Annapolis Junction
 
—

(a) 
2,340

(b) 
2,468

(a)(c) 
6,536

(b) 
Delray Plaza
 
—

(a) 
429

 
489

(a) 
1,153

 
Nexton Square
 
380

 
550

 
1,177

 
1,584

 
Interlock Commercial
 
3,189

(c) 
1,595

 
9,364

(c) 
3,425

 
Solis Apartments at Interlock
 
847

 
596

 
2,522

 
1,567

 
Total mezzanine
 
4,416

 
5,688

 
16,020

 
16,557

 
Other interest income
 
1

 
22

 
35

 
65

 
Total interest income
 
$
4,417

 
$
5,710

 
$
16,055

 
$
16,622

 
________________________________________
(a) Loan was placed on nonaccrual status effective April 1, 2020.
(b) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018.
(c) Includes partial recognition of interest income related to an exit fee that is due upon repayment of the loan.
Financing Receivable Credit Quality Indicators
The following table presents amortized cost basis of the portfolio by year of origination and risk rating as of September 30, 2020 (in thousands):

 
 
Year of Origination
Risk Ratings
 
2020
 
2019
 
2018
 
2017
 
2016
 
Total
Pass
 
$
—

 
$
—

 
$
111,611

 
$
—

 
$
—

 
$
111,611

Special Mention
 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
—

 
—

 
14,723

 
42,368

 
57,091

Total amortized cost basis
 
$
—

 
$
—

 
$
111,611

 
$
14,723

 
$
42,368

 
$
168,702
Allowance for Credit Losses on Financing Receivables Changes in the allowance for the nine months ended September 30, 2020 were as follows (in thousands):
 
 
Nine Months Ended 
September 30, 2020
Beginning balance (December 31, 2019)
 
$
—

Cumulative effect of accounting change
 
2,825

Unrealized credit loss provision
 
227

Ending balance
 
$
3,052