XML 39 R26.htm IDEA: XBRL DOCUMENT v3.21.2
Loans Held for Investment and the Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
Schedule of Overall Statistics for Loan Portfolio

The following table details overall statistics for the Company’s loan portfolio as of June 30, 2021 and December 31, 2020 (dollars in thousands):

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

Balance Sheet

Portfolio

 

 

Total Loan Portfolio

 

 

Balance Sheet

Portfolio

 

 

Total Loan Portfolio

 

Number of loans

 

 

62

 

 

 

63

 

 

 

57

 

 

 

58

 

Floating rate loans

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Total loan commitment(1)

 

$

5,318,297

 

 

$

5,450,297

 

 

$

4,943,511

 

 

$

5,075,511

 

Unpaid principal balance(2)

 

$

4,833,535

 

 

$

4,833,535

 

 

$

4,524,725

 

 

$

4,524,725

 

Unfunded loan commitments(3)

 

$

488,916

 

 

$

488,916

 

 

$

423,487

 

 

$

423,487

 

Amortized cost

 

$

4,825,890

 

 

$

4,825,890

 

 

$

4,516,400

 

 

$

4,516,400

 

Weighted average credit spread(4)

 

 

3.2

%

 

 

3.2

%

 

 

3.2

%

 

 

3.2

%

Weighted average all-in yield(4)

 

 

5.0

%

 

 

5.0

%

 

 

5.3

%

 

 

5.3

%

Weighted average term to extended maturity

   (in years)(5)

 

 

2.9

 

 

 

2.9

 

 

 

3.1

 

 

 

3.1

 

 

(1)

In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on the Company’s balance sheet. When the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, the Company retains on its balance sheet a mezzanine loan. Total loan commitment encompasses the entire loan portfolio the Company originated, acquired and financed. As of June 30, 2021 and December 31, 2020, the Company had one non-consolidated senior interest outstanding of $132.0 million.

(2)

Unpaid principal balance includes PIK interest of $4.2 million and $4.7 million as of June 30, 2021 and December 31, 2020, respectively.

(3)

Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by the Company’s borrowers, to finance operating deficits during renovation and lease-up, and in limited instances to finance construction.

(4)

As of June 30, 2021, all of the Company’s loans were floating rate and were indexed to LIBOR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, loan origination costs and accrual of both extension and exit fees. Credit spread and all-in yield for the total portfolio assumes the applicable floating benchmark rate as of June 30, 2021 for weighted average calculations.

(5)

Extended maturity assumes all extension options are exercised by the borrower; provided, however, that the Company’s loans may be repaid prior to such date. As of June 30, 2021, based on the unpaid principal balance of the Company’s total loan exposure, 20.6% of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 79.4% were open to repayment by the borrower without penalty.

Schedule of Mortgage Loan Investment Portfolio by Loan Seniority The following tables present an overview of the mortgage loan investment portfolio by loan seniority as of June 30, 2021 and December 31, 2020 (dollars in thousands):

 

 

 

June 30, 2021

 

Loans Held for Investment, Net

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination Fees, net

 

 

Amortized Cost

 

Senior loans

 

$

4,799,273

 

 

$

(7,543

)

 

$

4,791,730

 

Subordinated and Mezzanine loans

 

 

34,262

 

 

 

(102

)

 

 

34,160

 

Total

 

$

4,833,535

 

 

$

(7,645

)

 

$

4,825,890

 

Allowance for credit losses

 

 

 

 

 

 

 

 

 

 

(51,941

)

Loans Held for Investment, Net

 

 

 

 

 

 

 

 

 

$

4,773,949

 

 

 

 

December 31, 2020

 

Loans Held for Investment, Net

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination Fees, net

 

 

Amortized Cost

 

Senior loans

 

$

4,492,209

 

 

$

(8,161

)

 

$

4,484,048

 

Subordinated and Mezzanine loans

 

 

32,516

 

 

 

(164

)

 

 

32,352

 

Total

 

$

4,524,725

 

 

$

(8,325

)

 

$

4,516,400

 

Allowance for credit losses

 

 

 

 

 

 

 

 

 

 

(59,940

)

Loans Held for Investment, Net

 

 

 

 

 

 

 

 

 

$

4,456,460

 
Summary of Loan Portfolio Activity

For the six months ended June 30, 2021, loan portfolio activity was as follows (dollars in thousands):

 

 

 

Carrying Value

 

Balance as of December 31, 2020

 

$

4,456,460

 

Additions during the period:

 

 

 

 

Loans originated and acquired

 

 

631,408

 

Additional fundings

 

 

74,312

 

Amortization of origination fees

 

 

3,775

 

Deductions during the period:

 

 

 

 

Collection of principal

 

 

(339,315

)

Loan sale

 

 

(60,690

)

Change in allowance for credit losses

 

 

7,999

 

Balance as of June 30, 2021

 

$

4,773,949

 

 
Summary of Amortized Cost by Origination Year Grouped by Risk Rating

The following tables present amortized cost basis by origination year, grouped by risk rating, as of June 30, 2021 and December 31, 2020 (dollars in thousands):

 

 

 

June 30, 2021

 

 

 

Amortized Cost by Origination Year

 

 

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

Prior

 

 

Total

 

Senior loans by internal risk

   ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

2

 

 

33,345

 

 

 

—

 

 

 

—

 

 

 

308,404

 

 

 

—

 

 

 

—

 

 

 

341,749

 

3

 

 

598,526

 

 

 

253,369

 

 

 

1,536,789

 

 

 

1,089,536

 

 

 

337,139

 

 

 

23,009

 

 

 

3,838,368

 

4

 

 

—

 

 

 

—

 

 

 

316,794

 

 

 

46,937

 

 

 

216,682

 

 

 

—

 

 

 

580,413

 

5

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31,200

 

 

 

—

 

 

 

—

 

 

 

31,200

 

Total mortgage loans

 

$

631,871

 

 

$

253,369

 

 

$

1,853,583

 

 

$

1,476,077

 

 

$

553,821

 

 

$

23,009

 

 

$

4,791,730

 

Subordinated and mezzanine loans

   by internal risk ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

2

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

3

 

 

—

 

 

 

—

 

 

 

34,160

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

34,160

 

4

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

5

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total subordinated and

   mezzanine loans

 

 

—

 

 

 

—

 

 

 

34,160

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

34,160

 

Total

 

$

631,871

 

 

$

253,369

 

 

$

1,887,743

 

 

$

1,476,077

 

 

$

553,821

 

 

$

23,009

 

 

$

4,825,890

 

 

 

 

December 31, 2020

 

 

 

Amortized Cost by Origination Year

 

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

 

Total

 

Senior loans by internal risk ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

2

 

 

—

 

 

 

—

 

 

 

337,738

 

 

 

—

 

 

 

—

 

 

 

337,738

 

3

 

 

247,770

 

 

 

1,705,783

 

 

 

1,099,503

 

 

 

255,255

 

 

 

—

 

 

 

3,308,311

 

4

 

 

—

 

 

 

433,334

 

 

 

46,882

 

 

 

301,628

 

 

 

25,049

 

 

 

806,893

 

5

 

 

—

 

 

 

—

 

 

 

31,106

 

 

 

—

 

 

 

—

 

 

 

31,106

 

Total mortgage loans

 

$

247,770

 

 

$

2,139,117

 

 

$

1,515,229

 

 

$

556,883

 

 

$

25,049

 

 

$

4,484,048

 

Subordinated and mezzanine loans by

   internal risk ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

2

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

3

 

 

—

 

 

 

32,352

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

32,352

 

4

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

5

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total subordinated and mezzanine

   loans

 

 

—

 

 

 

32,352

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

32,352

 

Total

 

$

247,770

 

 

$

2,171,469

 

 

$

1,515,229

 

 

$

556,883

 

 

$

25,049

 

 

$

4,516,400

 
Summary of Amortized Cost and Results of Internal Risk Rating Review Performed

The table below summarizes the amortized cost, and results of the Company’s internal risk rating review performed as of June 30, 2021 and December 31, 2020 (dollars in thousands):

 

Rating

 

June 30, 2021

 

 

December 31, 2020

 

1

 

$

—

 

 

$

—

 

2

 

 

341,749

 

 

 

337,738

 

3

 

 

3,872,528

 

 

 

3,340,663

 

4

 

 

580,413

 

 

 

806,893

 

5

 

 

31,200

 

 

 

31,106

 

Total

 

$

4,825,890

 

 

$

4,516,400

 

Allowance for Credit Losses

 

 

(51,941

)

 

 

(59,940

)

Carrying Value

 

$

4,773,949

 

 

$

4,456,460

 

Weighted Average Risk Rating(1)

 

 

3.1

 

 

 

3.1

 

 

(1)

Weighted Average Risk Rating calculated based on amortized cost balance at period end.
Summary of Activity in Allowance for Credit Losses for Mortgage Loan Investment Portfolio by Class of Financing Receivable

The following tables present activity in the allowance for credit losses for the mortgage loan investment portfolio by class of finance receivable for the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

 

 

 

For the Three Months Ended June 30, 2021

 

 

 

Senior Loans

 

 

Subordinated and

Mezzanine Loans

 

 

Total

 

Allowance for credit losses for loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of April 1, 2021

 

$

55,155

 

 

$

1,486

 

 

$

56,641

 

Credit Loss Expense (Benefit)

 

 

(3,724

)

 

 

(976

)

 

 

(4,700

)

Subtotal

 

 

51,431

 

 

 

510

 

 

 

51,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on unfunded loan commitments:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of April 1, 2021

 

 

2,084

 

 

 

65

 

 

 

2,149

 

Credit Loss Expense (Benefit)

 

 

1,276

 

 

 

(54

)

 

 

1,222

 

Subtotal

 

 

3,360

 

 

 

11

 

 

 

3,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total allowance for credit losses

 

$

54,791

 

 

$

521

 

 

$

55,312

 

 

 

 

 

 

For the Three Months Ended June 30, 2020

 

 

 

Senior Loans

 

 

Subordinated and

Mezzanine Loans

 

 

Total

 

Allowance for credit losses for loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of April 1, 2020

 

$

73,620

 

 

$

2,038

 

 

$

75,658

 

Credit Loss Expense (Benefit)

 

 

(22,063

)

 

 

(38

)

 

 

(22,101

)

Subtotal

 

 

51,557

 

 

 

2,000

 

 

 

53,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on unfunded loan commitments:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of April 1, 2020

 

 

5,807

 

 

 

1,528

 

 

 

7,335

 

Credit Loss Expense (Benefit)

 

 

(2,189

)

 

 

(28

)

 

 

(2,217

)

Subtotal

 

 

3,618

 

 

 

1,500

 

 

 

5,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total allowance for credit losses

 

$

55,175

 

 

$

3,500

 

 

$

58,675

 

 

 

 

 

For the Six Months Ended June 30, 2021

 

 

 

Senior Loans

 

 

Subordinated and

Mezzanine Loans

 

 

Total

 

Allowance for credit losses for loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of December 31, 2020

 

$

58,210

 

 

$

1,730

 

 

$

59,940

 

Credit Loss Expense (Benefit)

 

 

(6,779

)

 

 

(1,220

)

 

 

(7,999

)

Subtotal

 

 

51,431

 

 

 

510

 

 

 

51,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on unfunded loan commitments:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of December 31, 2020

 

 

2,756

 

 

 

132

 

 

 

2,888

 

Credit Loss Expense (Benefit)

 

 

604

 

 

 

(121

)

 

 

483

 

Subtotal

 

 

3,360

 

 

 

11

 

 

 

3,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total allowance for credit losses

 

$

54,791

 

 

$

521

 

 

$

55,312

 

 

 

 

For the Six Months Ended June 30, 2020

 

 

 

Senior Loans

 

 

Subordinated and

Mezzanine Loans

 

 

Total

 

Allowance for credit losses for loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of December 31, 2019

 

$

—

 

 

$

—

 

 

$

—

 

Cumulative-effect adjustment upon adoption of ASU 2016-13

 

 

16,903

 

 

 

880

 

 

 

17,783

 

Credit Loss Expense (Benefit)

 

 

34,654

 

 

 

1,120

 

 

 

35,774

 

Subtotal

 

 

51,557

 

 

 

2,000

 

 

 

53,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on unfunded loan commitments:

 

 

 

 

 

 

 

 

 

 

 

 

CECL reserve as of December 31, 2019

 

 

—

 

 

 

—

 

 

 

—

 

Cumulative-effect adjustment upon adoption of ASU 2016-13

 

 

1,862

 

 

 

—

 

 

 

1,862

 

Credit Loss Expense (Benefit)

 

 

1,756

 

 

 

1,500

 

 

 

3,256

 

Subtotal

 

 

3,618

 

 

 

1,500

 

 

 

5,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total allowance for credit losses

 

$

55,175

 

 

$

3,500

 

 

$

58,675

 

 
Schedule of Paid-in-Kind Interest

The following table presents the activity in the PIK balance during the six months ended June 30, 2021 (dollars in thousands):

 

 

 

 

 

 

Balance as of December 31, 2020

 

$

4,701

 

PIK accrued

 

 

816

 

PIK repayments and write-off

 

 

—

 

Balance as of March 31, 2021

 

 

5,517

 

PIK accrued

 

 

360

 

PIK repayments

 

 

(1,034

)

PIK write-off

 

 

(690

)

Balance as of June 30, 2021

 

$

4,153

 
Schedule of Collections of Scheduled Interest

The following table presents collections of scheduled interest during the three and six months ended June 30, 2021 and 2020 and the three months ended March 31, 2021:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Scheduled interest, including PIK

 

99.3

%

 

 

99.4

%

 

 

100.0

%

 

 

99.3

%

 

 

100.0

%

PIK interest as a percentage of

scheduled interest

 

1.1

%

 

 

1.2

%

 

 

1.0

%

 

 

1.1

%

 

 

0.4

%

 
Summary of Aging Analysis on Amortized Cost Basis of Mortgage Loans by Class of Loans

The following table presents the aging analysis on an amortized cost basis of mortgage loans by class of loans as of June 30, 2021 (dollars in thousands):

 

 

 

Days Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days

or More

 

 

Total

Loans

Past Due

 

 

Current

 

 

Total

Loans

 

 

90 Days or

More Past

Due and

Accruing

 

Loans Receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior loans

 

$

—

 

 

$

—

 

 

$

31,200

 

 

$

31,200

 

 

$

4,760,530

 

 

$

4,791,730

 

 

$

—

 

Subordinated and mezzanine loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

34,160

 

 

 

34,160

 

 

 

—

 

Total

 

$

—

 

 

$

—

 

 

$

31,200

 

 

$

31,200

 

 

$

4,794,690

 

 

$

4,825,890

 

 

$

—