XML 48 R44.htm IDEA: XBRL DOCUMENT v3.20.1
Fair Value (Tables)
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The table below presents a summary of financial assets and financial liabilities carried at fair value on a recurring basis, including financial instruments for which the fair value option was elected, but excluding financial assets under the NAV practical expedient, categorized into the three tier fair value hierarchy that is prioritized based upon the level of transparency in inputs used in the valuation techniques, as follows:
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in non-active markets, or valuation techniques utilizing inputs that are derived principally from or corroborated by observable data directly or indirectly for substantially the full term of the financial instrument.
Level 3—At least one assumption or input is unobservable and it is significant to the fair value measurement, requiring significant management judgment or estimate.
 
 
Fair Value Measurements
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Marketable equity securities
 
$
102,399

 
$
—

 
$
—

 
$
102,399

Debt securities available for sale—N-Star CDO bonds
 
—

 
—

 
54,474

 
54,474

CMBS of consolidated fund
 
—

 
2,224

 
—

 
2,224

Other assets—derivative assets
 
—

 
26,919

 
—

 
26,919

Fair Value Option:
 
 
 
 
 
 
 
 
Loans receivable
 
—

 
—

 
1,588,427

 
1,588,427

Equity method investments
 
—

 
—

 
218,340

 
218,340

Liabilities
 
 
 
 
 
 
 
 
Other liabilities—derivative liabilities
 
—

 
84,271

 
—

 
84,271

Other liabilities—contingent consideration for THL Hotel Portfolio
 
—

 
—

 
6,630

 
6,630

Other liabilities—settlement liability
 
—

 
—

 
4,910

 
4,910

December 31, 2019
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Marketable equity securities
 
$
138,586

 
$
—

 
$
—

 
$
138,586

Debt securities available for sale—N-Star CDO bonds
 
—

 
—

 
54,859

 
54,859

CMBS of consolidated fund
 
—

 
2,732

 
—

 
2,732

Other assets—derivative assets
 
—

 
21,386

 
—

 
21,386

Fair Value Option:
 
 
 
 
 
 
 
 
Equity method investments
 
—

 
—

 
222,875

 
222,875

Liabilities
 
 
 
 
 
 
 
 
Other liabilities—derivative liabilities
 
—

 
127,531

 
—

 
127,531

Other liabilities—contingent consideration for THL Hotel Portfolio
 
—

 
—

 
9,330

 
9,330
Schedule of Fair Value Assumptions Related to Contingent Consideration
Quantitative information about recurring Level 3 fair value assets, for which information about unobservable inputs is reasonably available to the Company, are as follows.
 
 
 
 
Valuation Technique
 
Key Unobservable Inputs
 
Input Value
 
Effect on Fair Value from Increase in Input Value (2)
Financial Instrument 
 
Fair Value
(In thousands)
 
 
 
Weighted Average(1)
(Range)
 
March 31, 2020
 
 
 
 
 
 
 
 
 
 
N-Star CDO bonds
 
$
54,474

 
Discounted cash flows
 
Discount rate
 
24.9%
(18.2% - 65.0%)
 
Decrease
Fair Value Option:
 
 
 
 
 
 
 
 
 
 
Loans receivable
 
1,568,302

 
Discounted cash flows
 
Discount rate
 
12.7%
(7.2% - 25.5%)
 
Decrease
Loans receivable
 
20,125

 
Transaction price(5)
 
N/A
 
N/A
 
N/A
Equity method investments—third party private equity funds
 
4,616

 
NAV(3)
 
N/A
 
N/A
 
N/A
Equity method investments—other
 
17,870

 
Discounted cash flows
 
Discount rate
 
12.0%
(5.1% - 16.5%)
 
Decrease
Equity method investments—other
 
25,000

 
Multiple
 
Revenue multiple
 
4.1x
 
(4) 
Equity method investments—other
 
170,854

 
Transaction price(5)
 
N/A
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
 
N-Star CDO bonds
 
$
54,859

 
Discounted cash flows
 
Discount rate
 
22.3%
(16.8% - 65.0%)
 
Decrease
Fair Value Option:
 
 
 
 
 
 
 
 
 
 
Equity method investments—third party private equity funds
 
5,391

 
NAV(3)
 
N/A
 
N/A
 
N/A
Equity method investments—other
 
18,574

 
Discounted cash flows
 
Discount rate
 
10.1%
(5.1% - 15.8%)
 
Decrease
Equity method investments—other
 
25,000

 
Multiple
 
Revenue multiple
 
3.7x
 
(4) 
Equity method investments—other
 
173,910

 
Transaction price(5)
 
N/A
 
N/A
 
N/A
__________
(1) 
Weighted average discount rates are calculated based upon undiscounted cash flows.
(2) 
Represents the directional change in fair value that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the reverse effect. Significant increases or decreases in these inputs in isolation could result in significantly higher or lower fair value measures.
(3) 
Fair value was estimated based on underlying NAV of the respective funds on a quarter lag, adjusted as deemed appropriate by management
(4) 
Fair value is affected by change in revenue multiple relative to change in rate of revenue growth.
(5) 
Valued based upon transaction price of investments recently acquired or offer prices on loans, investments or underlying assets of investee pending sales. Transaction price approximates fair value for investee engaged in real estate development during the development stage.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents changes in recurring Level 3 fair value assets, including realized and unrealized gains (losses) included in other gain (loss) on the consolidated statement of operations and in AOCI.
 
 
 
 
Fair Value Option
(In thousands)
 
Securities
 
Loans Receivable
 
Equity Method Investments
Fair value at December 31, 2018
 
$
64,127

 
$
—

 
$
81,085

Purchases, contributions and accretion
 
1,769

 
—

 
101,195

Paydowns, distributions and sales
 
(2,882
)
 
—

 
(6,341
)
Realized and unrealized gains (losses) in earnings, net
 
(667
)
 
—

 
2,192

Other comprehensive income
 
2,063

 
—

 
—

Fair value at March 31, 2019
 
$
64,410

 
$
—

 
$
178,131

 
 
 
 
 
 
 
Net unrealized gains (losses) in earnings on instruments held at March 31, 2019
 
$
—

 
$
—

 
$
1,437

 
 
 
 
 
 
 
Fair value at December 31, 2019
 
$
54,859

 
$
—

 
$
222,875

Election of fair value option on January 1, 2020
 
—

 
1,556,131

 
—

Reclassification of accrued interest on January 1, 2020
 
—

 
13,504

 
—

Purchases, drawdowns, contributions and accretion
 
594

 
74,236

 
762

Paydowns, distributions and sales
 
(1,651
)
 
(49,133
)
 
(781
)
Interest accrual, including capitalization of paid-in-kind interest
 
—

 
11,849

 
—

Allowance for credit losses
 
(816
)
 
—

 
—

Realized and unrealized gains (losses) in earnings, net
 
—

 
3,105

 
(179
)
Other comprehensive income (loss) (1)
 
1,488

 
(21,265
)
 
(4,337
)
Fair value at March 31, 2020
 
$
54,474

 
$
1,588,427

 
$
218,340

 
 
 
 
 
 
 
Net unrealized gains (losses) on instruments held at March 31, 2020:
 
 
 
 
 
 
In earnings
 
$
—

 
$
3,105

 
$
(179
)
In other comprehensive income (loss)
 
$
1,488

 
$
—

 
$
—


__________
(1) 
Amounts recorded in OCI for loans receivable and equity investments represent
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents changes in recurring Level 3 fair value assets, including realized and unrealized gains (losses) included in other gain (loss) on the consolidated statement of operations and in AOCI.
 
 
 
 
Fair Value Option
(In thousands)
 
Securities
 
Loans Receivable
 
Equity Method Investments
Fair value at December 31, 2018
 
$
64,127

 
$
—

 
$
81,085

Purchases, contributions and accretion
 
1,769

 
—

 
101,195

Paydowns, distributions and sales
 
(2,882
)
 
—

 
(6,341
)
Realized and unrealized gains (losses) in earnings, net
 
(667
)
 
—

 
2,192

Other comprehensive income
 
2,063

 
—

 
—

Fair value at March 31, 2019
 
$
64,410

 
$
—

 
$
178,131

 
 
 
 
 
 
 
Net unrealized gains (losses) in earnings on instruments held at March 31, 2019
 
$
—

 
$
—

 
$
1,437

 
 
 
 
 
 
 
Fair value at December 31, 2019
 
$
54,859

 
$
—

 
$
222,875

Election of fair value option on January 1, 2020
 
—

 
1,556,131

 
—

Reclassification of accrued interest on January 1, 2020
 
—

 
13,504

 
—

Purchases, drawdowns, contributions and accretion
 
594

 
74,236

 
762

Paydowns, distributions and sales
 
(1,651
)
 
(49,133
)
 
(781
)
Interest accrual, including capitalization of paid-in-kind interest
 
—

 
11,849

 
—

Allowance for credit losses
 
(816
)
 
—

 
—

Realized and unrealized gains (losses) in earnings, net
 
—

 
3,105

 
(179
)
Other comprehensive income (loss) (1)
 
1,488

 
(21,265
)
 
(4,337
)
Fair value at March 31, 2020
 
$
54,474

 
$
1,588,427

 
$
218,340

 
 
 
 
 
 
 
Net unrealized gains (losses) on instruments held at March 31, 2020:
 
 
 
 
 
 
In earnings
 
$
—

 
$
3,105

 
$
(179
)
In other comprehensive income (loss)
 
$
1,488

 
$
—

 
$
—


__________
(1) 
Amounts recorded in OCI for loans receivable and equity investments represent foreign currency translation differences on the Company's foreign subsidiaries that hold the respective foreign currency denominated investments.
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Investments in a Company-sponsored private fund and a non-traded REIT, and limited partnership interest in a third party private fund are valued using NAV of the respective vehicles.
 
 
March 31, 2020
 
December 31, 2019
(In thousands)
 
Fair Value
 
Unfunded Commitments
 
Fair Value
 
Unfunded Commitments
Private fund—real estate
 
$
17,271

 
$
9,137

 
$
16,271

 
$
11,058

Non-traded REIT—real estate
 
21,858

 
—

 
19,358

 
—

Private fund—emerging market private equity
 
2,264

 
—

 
3,012

 
—
Fair and Carrying Values of Assets and Liabilities by the Level in the Fair Value Hierarchy by Balance Sheet Grouping
Carrying amounts and estimated fair values of financial instruments reported at amortized cost are presented below. The carrying values of cash, accounts receivable, due from and to affiliates, interest payable and accounts payable approximate fair value due to their short term nature and credit risk, if any, are negligible. There are no loans receivable carried at amortized cost in 2020 as the Company elected the fair value option for all loans receivable effective January 1, 2020.
 
 
Fair Value Measurements
 
Carrying Value
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
March 31, 2020
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Debt at amortized cost
 
 
 
 
 
 
 
 
 
 
Corporate credit facility
 
—

 
600,000

 
—

 
600,000

 
600,000

Convertible and exchangeable senior notes
 
493,926

 
13,095

 
—

 
507,021

 
614,542

Secured debt
 
—

 
—

 
7,941,079

 
7,941,079

 
8,037,052

Secured debt related to assets held for sale
 
—

 
—

 
235,000

 
235,000

 
233,166

Junior subordinated debt
 
—

 
—

 
92,701

 
92,701

 
201,744

December 31, 2019
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
Loans at amortized cost
 
$
—

 
$
—

 
$
1,557,850

 
$
1,557,850

 
$
1,552,824

Liabilities
 
 
 
 
 
 
 
 
 
 
Debt at amortized cost
 
 
 
 
 
 
 
 
 
 
Convertible and exchangeable senior notes
 
602,000

 
13,095

 
—

 
615,095

 
614,052

Secured debt
 
—

 
—

 
8,213,550

 
8,213,550

 
8,168,666

Secured debt related to assets held for sale
 
—

 
—

 
235,000

 
235,000

 
232,944

Junior subordinated debt
 
—

 
—

 
225,835

 
225,835

 
201,190