XML 50 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Loans and Preferred Equity Held for Investment, net (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans and Preferred Equity Held for Investment, net
The following table provides a summary of the Company’s loans and preferred equity held for investment, net (dollars in thousands):
September 30, 2020December 31, 2019
Unpaid Principal Balance
Carrying
Value
Weighted Average Coupon(1)
Weighted Average Maturity in YearsUnpaid Principal Balance
Carrying
Value
Weighted Average Coupon(1)
Weighted Average Maturity in Years
Fixed rate
Mezzanine loans$150,335 $149,678 12.8 %4.2$223,395 $222,503 12.8 %4.2
Preferred equity interests18,350 18,350 15.0 %2.9115,384 115,313 12.5 %6.9
Other loans(2)
13,692 13,607 15.0 %3.712,572 12,448 15.0 %4.4
182,377 181,635 351,351 350,264 
Variable rate
Senior loans974,207 971,963 5.5 %3.41,462,467 1,457,738 6.0 %3.8
Securitized loans(3)
972,687 970,473 5.1 %3.61,006,495 1,002,696 5.2 %4.2
Mezzanine loans18,178 18,298 9.4 %2.238,110 38,258 11.4 %2.0
Preferred equity interests1,569 1,569 5.3 %0.3— — — — 
1,966,641 1,962,303 2,507,072 2,498,692 
Loans and preferred equity held for investment2,149,018 2,143,938 2,858,423 2,848,956 
Allowance for loan lossesNA(40,524)NA(272,624)
Loans and preferred equity held for investment, net$2,149,018 $2,103,414 $2,858,423 $2,576,332 
_________________________________________
(1)Calculated based on contractual interest rate.
(2)Includes one corporate term loan secured by the borrower’s limited partnership interests in a fund at September 30, 2020 and December 31, 2019.
(3)Represents loans transferred into securitization trusts that are consolidated by the Company.
Schedule of Mortgage Loans on Real Estate
Activity relating to the Company’s loans and preferred equity held for investment, net was as follows (dollars in thousands):
Carrying Value
Balance at January 1, 2020$2,576,332 
Acquisitions/originations/additional funding121,309 
Loan maturities/principal repayments(373,285)
Transfer to loans held for sale(154,370)
Discount accretion/premium amortization6,047 
Capitalized interest(3,856)
Provision for loan losses(1)
(86,329)
Effect of CECL adoption(2)
(21,093)
Charge-off38,659 
Balance at September 30, 2020$2,103,414 
_________________________________________
(1)Provision for loan losses includes $5.2 million for a loan that was subsequently transferred to held for sale during the second quarter of 2020 and the net provision recorded upon loan repayment totaling $1.8 million during the nine months ended September 30, 2020. Additionally, provision for loan losses excludes $1.0 million determined by the Company’s PD/LGD model for unfunded commitments reported on the consolidated statement of operations, with a corresponding offset to other liabilities recorded on the Company’s consolidated balance sheets.
(2)Calculated by the Company’s PD/LGD model upon CECL adoption on January 1, 2020. See Note 2, “Summary of Significant Accounting Polices” for further details.
Aging Summary of Loans
The following table provides an aging summary of loans and preferred equity held for investment at carrying values before allowance for loan losses, if any (dollars in thousands):
Current or Less Than 30 Days Past Due
30-59 Days Past Due(1)
60-89 Days Past Due
90 Days or More Past Due(2)
Total Loans
September 30, 2020$2,143,938 $— $— $— $2,143,938 
December 31, 20192,558,505 32,322 — 258,129 2,848,956 
_________________________________________
(1)At December 31, 2019, 30-59 days past due includes one loan (Midwest Hospitality) that was placed on nonaccrual status during the fourth quarter of 2019 following a borrower default. During the three months ended September 30, 2020, Midwest Hospitality was repaid in a discounted payoff at which time the Company provided a bridge loan totaling $19.5 million to a new borrower.
(2)At December 31, 2019, 90 days or more past due loans includes four NY hospitality loans to the same borrower and secured by the same collateral with combined carrying value before allowance for loan losses of $258.1 million on nonaccrual status. All other loans in this table remain current on interest payments. The Company completed a discounted payoff of the four NY hospitality loans in April 2020.
Impaired Loans The following table presents impaired loans at December 31, 2019 (dollars in thousands):
Unpaid Principal Balance(1)
Gross Carrying Value
With Allowance for Loan Losses(2)
Without Allowance for Loan Losses
Total(2)
Allowance for Loan Losses
December 31, 2019$408,058 $377,421 $32,322 $409,743 $272,624 
_________________________________________
(1)Includes four NY hospitality loans to the same borrower and secured by the same collateral with combined unpaid principal balance of $257.2 million and gross carrying value of $258.1 million on nonaccrual status. All other loans included in this table remain current on interest payments. The Company completed a discounted payoff of the four NY hospitality loans in April 2020.
(2)Includes unpaid principal balance plus any applicable exit fees less net deferred loan fees.
Upon adoption of ASU 2016-13 the incurred loss model has been replaced with a lifetime current expected credit loss model for the Company’s loans carried at amortized cost, and as such all loans in the Company’s portfolio maintain an allowance for loan losses at September 30, 2020. See Note 2 “Summary of Significant Accounting Policies—Accounting Standards Adopted in 2020—Credit Losses” for further details.
The average carrying value and interest income recognized on impaired loans for the three and nine months ended September 30, 2019 were as follows (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
20192019
Average carrying value before allowance for loan losses$356,753 $426,195 
Interest income2,737 8,282 
Allowance for Loan Losses
Changes in allowance for loan losses on loans are presented below (dollars in thousands):
Nine Months Ended September 30,
20202019
Allowance for loan losses at beginning of period$272,624 $109,328 
Effect of CECL adoption(1)
21,093 — 
Provision for loan losses(2)
86,329 220,572 
Charge-off(38,659)(46,692)
Transfer to loans held for sale(300,863)— 
Allowance for loan losses at end of period(3)
$40,524 $283,208 
_________________________________________
(1)Calculated by the Company’s PD/LGD model upon CECL adoption on January 1, 2020. See Note 2, “Summary of Significant Accounting Policies” for further details.
(2)Provision for loan losses includes $5.2 million for a loan that was subsequently transferred to held for sale during the second quarter of 2020 and net provision recorded upon loan repayment totaling $1.8 million during the nine months ended September 30, 2020. Additionally, provision for loan losses excludes $1.0 million determined by the Company’s PD/LGD model for unfunded commitments reported on the consolidated statement of operations, with a corresponding offset to other liabilities recorded on the Company’s consolidated balance sheets.
(3)At September 30, 2020, includes $38.9 million related to the Company’s PD/LGD model and $1.6 million related to the corporate term loan, which was evaluated individually. See further discussion in “Nonaccrual and Past Due Loans and Preferred Equity.”
Schedule of Assets Held for Sale Related to Loans and Preferred Equity
The following table summarizes the Company’s assets held for sale related to loans and preferred equity (dollars in thousands):
September 30, 2020December 31, 2019
Assets
Loans and preferred equity held for investment, net$— $5,016 
Total assets held for sale$— $5,016 
Summary of Loans and Preferred Equity Held for Investment by Year of Origination and Credit Quality Risk Ranking
The following table provides a summary by carrying values before any allowance for loan losses of the Company’s loans and preferred equity held for investment by year of origination and credit quality risk ranking (dollars in thousands). Refer to Note 2, “Summary of Significant Accounting Policies—Accounting Standards Adopted in 2020—Credit Losses” for loans risk ranking definitions.
20202019201820172016PriorTotal
Senior loans
  Risk Rankings:
3$19,500 $371,654 $279,223 $33,660 $— $— $704,037 
4— 835,205 403,194 — — — 1,238,399 
Total Senior loans19,500 1,206,859 682,417 33,660 — — 1,942,436 
Mezzanine loans
Risk Rankings:
4— 95,848 55,484 12,120 — 4,524 167,976 
Total Mezzanine loans— 95,848 55,484 12,120 — 4,524 167,976 
Preferred equity interests and other
Risk Rankings:
41,569 — 18,350 — — — 19,919 
5— 13,607 — — — — 13,607 
Total Preferred equity interests and other1,569 13,607 18,350 — — — 33,526 
Total Loans and preferred equity held for investment$21,069 $1,316,314 $756,251 $45,780 $— $4,524 $2,143,938