Fair Value (Tables)

6 Months Ended

Jun. 30, 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
June 30, 2020
Assets
Marketable equity securities	$	116,911	$	—	$	—	$	116,911
AFS debt securities	—		—		32,271		32,271
CMBS of consolidated fund	—		1,678		—		1,678
Other assets—derivative assets	—		4,933		—		4,933
Fair Value Option:
Loans receivable	—		—		1,398,087		1,398,087
Equity method investments	—		—		209,263		209,263
Liabilities
Other liabilities—settlement liability	—		—		9,148		9,148
December 31, 2019
Assets
Marketable equity securities	$	138,586	$	—	$	—	$	138,586
AFS debt securities	—		—		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)
June 30, 2020
AFS debt securities	$	32,271	Discounted cash flows	Discount rate	28.4% (18.3% - 57.8%)	Decrease
Fair Value Option:
Loans receivable	1,368,087		Discounted cash flows	Discount rate	12.9% (7.3% - 25.7%)	Decrease
Loans receivable	30,000		Transaction price(5)	N/A	N/A	N/A
Equity method investments—third party private equity funds	3,144		NAV(3)	N/A	N/A	N/A
Equity method investments—other	17,816		Discounted cash flows	Discount rate	13.8% (7.0% - 17.2%)	Decrease
Equity method investments—other	25,000		Multiple	Revenue multiple	4.1x	(4)
Equity method investments—other	163,303		Transaction price(5)	N/A	N/A	N/A
December 31, 2019
AFS debt securities	$	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)	AFS Debt Securities			Loans Receivable			Equity Method Investments
Fair value at December 31, 2018	$	64,127		$	—		$	81,085
Purchases, contributions and accretion	3,267			—			102,273
Paydowns, distributions and sales	(5,582		)	—			(8,005		)
Realized and unrealized gains (losses) in earnings, net	(667		)	—			1,946
Other comprehensive income	1,297			—			—
Fair value at June 30, 2019	$	62,442		$	—		$	177,299
Net unrealized gains (losses) in earnings on instruments held at June 30, 2019	$	—		$	—		$	1,194
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	1,849			153,418			771
Paydowns, distributions and sales	(3,229		)	(62,302		)	(836		)
Interest accrual, including capitalization of paid-in-kind interest	—			25,116			—
Allowance for credit losses	(22,229		)	—			—
Realized and unrealized gains (losses) in earnings, net	—			(281,266		)	(12,139		)
Other comprehensive income (loss) (1)	1,021			(6,514		)	(1,408		)
Fair value at June 30, 2020	$	32,271		$	1,398,087		$	209,263
Net unrealized gains (losses) on instruments held at June 30, 2020:
In earnings	$	—		$	(281,266	)	$	(12,139	)
In other comprehensive income (loss)	$	1,021		$	—		$	—

__________

⁽¹⁾ 

Amounts recorded in OCI for loans receivable and equity method investments represent foreign currency translation differences on the Company's foreign subsidiaries that hold the respective foreign currency denominated investments.

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)	AFS Debt Securities			Loans Receivable			Equity Method Investments
Fair value at December 31, 2018	$	64,127		$	—		$	81,085
Purchases, contributions and accretion	3,267			—			102,273
Paydowns, distributions and sales	(5,582		)	—			(8,005		)
Realized and unrealized gains (losses) in earnings, net	(667		)	—			1,946
Other comprehensive income	1,297			—			—
Fair value at June 30, 2019	$	62,442		$	—		$	177,299
Net unrealized gains (losses) in earnings on instruments held at June 30, 2019	$	—		$	—		$	1,194
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	1,849			153,418			771
Paydowns, distributions and sales	(3,229		)	(62,302		)	(836		)
Interest accrual, including capitalization of paid-in-kind interest	—			25,116			—
Allowance for credit losses	(22,229		)	—			—
Realized and unrealized gains (losses) in earnings, net	—			(281,266		)	(12,139		)
Other comprehensive income (loss) (1)	1,021			(6,514		)	(1,408		)
Fair value at June 30, 2020	$	32,271		$	1,398,087		$	209,263
Net unrealized gains (losses) on instruments held at June 30, 2020:
In earnings	$	—		$	(281,266	)	$	(12,139	)
In other comprehensive income (loss)	$	1,021		$	—		$	—

__________

⁽¹⁾ 

Amounts recorded in OCI for loans receivable and equity method 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.

	June 30, 2020				December 31, 2019
(In thousands)	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private fund—real estate	$	14,963	$	9,137	$	16,271	$	11,058
Non-traded REIT—real estate	24,358		—		19,358		—
Private fund—emerging market private equity	2,723		—		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
June 30, 2020
Liabilities
Debt at amortized cost
Corporate credit facility	$	—	$	400,000	$	—	$	400,000	$	400,000
Convertible and exchangeable senior notes	549,344		13,095		—		562,439		615,038
Secured debt	—		—		7,674,887		7,674,887		7,993,754
Secured debt related to assets held for sale	—		—		235,000		235,000		233,394
Junior subordinated debt	—		—		142,103		142,103		202,322
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