Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2020

The following tables present segment reporting for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):


	Core
	Senior and Mezzanine Loans and Preferred Equity		CRE Debt Securities		Net Leased Real Estate		Corporate(1)		Total Core Portfolio		Legacy, Non-Strategic Portfolio		Total
Three Months Ended September 30, 2020
Net interest income (expense)	$	24,677	$	2,338	$	6	$	(1,460)	$	25,561	$	(338)	$	25,223
Property and other income	(14)		—		21,121		76		21,183		20,525		41,708
Management fee expense	—		—		—		(6,445)		(6,445)		(638)		(7,083)
Property operating expense	—		—		(2,480)		—		(2,480)		(12,797)		(15,277)
Transaction, investment and servicing expense	(210)		(2)		(364)		(827)		(1,403)		(224)		(1,627)
Interest expense on real estate	—		—		(8,067)		—		(8,067)		(4,138)		(12,205)
Depreciation and amortization	—		—		(10,946)		—		(10,946)		(3,824)		(14,770)
Provision for loan losses	(11,229)		—		—		—		(11,229)		825		(10,404)
Impairment of operating real estate	—		—		—		—		—		(3,451)		(3,451)
Administrative expense	(66)		(281)		(28)		(4,163)		(4,538)		(1,242)		(5,780)
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net	—		(13,750)		—		588		(13,162)		—		(13,162)
Other gain (loss), net	(1,457)		1,790		9,563		—		9,896		(216)		9,680
Income (loss) before equity in earnings of unconsolidated ventures and income taxes	11,701		(9,905)		8,805		(12,231)		(1,630)		(5,518)		(7,148)
Equity in earnings (loss) of unconsolidated ventures	(1,652)		—		—		—		(1,652)		(127)		(1,779)
Income tax benefit	1,915		—		34		—		1,949		13,408		15,357
Net income (loss)	$	11,964	$	(9,905)	$	8,839	$	(12,231)	$	(1,333)	$	7,763	$	6,430


	Core
	Senior and Mezzanine Loans and Preferred Equity		CRE Debt Securities		Net Leased Real Estate		Corporate(1)		Total Core Portfolio		Legacy, Non-Strategic Portfolio		Total
Three Months Ended September 30, 2019
Net interest income (expense)	$	21,295	$	5,102	$	—	$	(2,363)	$	24,034	$	2,077	$	26,111
Property and other income	209		200		28,316		369		29,094		35,218		64,312
Management fee expense	—		—		—		(9,084)		(9,084)		(2,271)		(11,355)
Property operating expense	—		—		(8,340)		—		(8,340)		(21,416)		(29,756)
Transaction, investment and servicing expense	(512)		(3)		(103)		(245)		(863)		(570)		(1,433)
Interest expense on real estate	—		—		(8,695)		—		(8,695)		(5,586)		(14,281)
Depreciation and amortization	—		—		(11,673)		—		(11,673)		(14,261)		(25,934)
Provision for loan losses	—		—		—		—		—		(110,314)		(110,314)
Impairment of operating real estate	—		—		(23,911)		—		(23,911)		(248,811)		(272,722)
Administrative expense	(312)		(244)		(78)		(3,537)		(4,171)		(3,561)		(7,732)
Unrealized gain on mortgage loans and obligations held in securitization trusts, net	—		215		—		(2,191)		(1,976)		—		(1,976)
Realized gain on mortgage loans and obligations held in securitization trusts, net	—		—		—		2,724		2,724		—		2,724
Other gain (loss), net	(15)		(4,683)		2,019		(3)		(2,682)		(6)		(2,688)
Income (loss) before equity in earnings of unconsolidated ventures and income taxes	20,665		587		(22,465)		(14,330)		(15,543)		(369,501)		(385,044)
Equity in earnings (loss) of unconsolidated ventures	2,736		—		—		—		2,736		(18,641)		(15,905)
Income tax benefit (expense)	—		—		(201)		—		(201)		(845)		(1,046)
Net income (loss)	$	23,401	$	587	$	(22,666)	$	(14,330)	$	(13,008)	$	(388,987)	$	(401,995)

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(1)Includes income earned from the CRE securities purchased at a discount, recognized using the effective interest method had the transaction been recorded as an available for sale security, at amortized cost. During the three months ended September 30, 2020 and September 30, 2019, $0.6 million and $2.2 million, respectively, was attributable to discount accretion income and was eliminated in consolidation in the corporate segment. The corresponding interest expense is recorded in net interest income in the Corporate column.


	Core
	Senior and Mezzanine Loans and Preferred Equity		CRE Debt Securities		Net Leased Real Estate		Corporate(1)		Total Core Portfolio		Legacy, Non-Strategic Portfolio		Total
Nine Months Ended September 30, 2020
Net interest income (expense)	$	75,309	$	8,929	$	15	$	(6,086)	$	78,167	$	(150)	$	78,017
Property and other income	91		73		66,290		198		66,652		72,340		138,992
Management fee expense	—		—		—		(19,446)		(19,446)		(2,789)		(22,235)
Property operating expense	(1)		—		(9,437)		—		(9,438)		(44,681)		(54,119)
Transaction, investment and servicing expense	(1,737)		(39)		(511)		(2,770)		(5,057)		(2,611)		(7,668)
Interest expense on real estate	—		—		(24,613)		—		(24,613)		(12,488)		(37,101)
Depreciation and amortization	—		—		(31,396)		—		(31,396)		(15,370)		(46,766)
Provision for loan losses	(42,642)		—		—		—		(42,642)		(37,643)		(80,285)
Impairment of operating real estate	—		—		—		—		—		(33,512)		(33,512)
Administrative expense	(802)		(1,017)		(231)		(11,033)		(13,083)		(6,486)		(19,569)
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net	—		(43,154)		—		1,565		(41,589)		—		(41,589)
Other gain (loss), net	(49,567)		(101,552)		14,035		(94)		(137,178)		7,063		(130,115)
Income (loss) before equity in earnings of unconsolidated ventures and income taxes	(19,349)		(136,760)		14,152		(37,666)		(179,623)		(76,327)		(255,950)
Equity in earnings (loss) of unconsolidated ventures	(72,906)		—		—		—		(72,906)		3,017		(69,889)
Income tax benefit (expense)	(646)		—		330		—		(316)		11,860		11,544
Net income (loss)	$	(92,901)	$	(136,760)	$	14,482	$	(37,666)	$	(252,845)	$	(61,450)	$	(314,295)


	Core
	Senior and Mezzanine Loans and Preferred Equity		CRE Debt Securities		Net Leased Real Estate		Corporate(1)		Total Core Portfolio		Legacy, Non-Strategic Portfolio		Total
Nine Months Ended September 30, 2019
Net interest income (expense)	$	55,077	$	15,856	$	2	$	(7,674)	$	63,261	$	8,735	$	71,996
Property and other income	450		341		88,067		371		89,229		103,595		192,824
Management fee expense	—		—		—		(27,256)		(27,256)		(6,814)		(34,070)
Property operating expense	—		—		(25,187)		—		(25,187)		(60,889)		(86,076)
Transaction, investment and servicing expense	(1,325)		(4)		(208)		301		(1,236)		(1,777)		(3,013)
Interest expense on real estate	—		—		(26,078)		—		(26,078)		(15,708)		(41,786)
Depreciation and amortization	—		—		(37,645)		—		(37,645)		(45,208)		(82,853)
Provision for loan losses	—		—		—		—		—		(220,572)		(220,572)
Impairment of operating real estate	—		—		(23,911)		—		(23,911)		(258,935)		(282,846)
Administrative expense	(614)		(979)		(178)		(10,206)		(11,977)		(10,418)		(22,395)
Unrealized gain on mortgage loans and obligations held in securitization trusts, net	—		6,035		—		(1,433)		4,602		—		4,602
Realized gain on mortgage loans and obligations held in securitization trusts, net	—		48		—		2,724		2,772		—		2,772
Other gain (loss), net	(15)		(14,909)		2,399		1		(12,524)		(1,305)		(13,829)
Income (loss) before equity in earnings of unconsolidated ventures and income taxes	53,573		6,388		(22,739)		(43,172)		(5,950)		(509,296)		(515,246)
Equity in earnings (losses) of unconsolidated ventures	39,020		—		—		—		39,020		(21,058)		17,962
Income tax benefit (expense)	(12)		—		1,822		(382)		1,428		(1,972)		(544)
Net income (loss)	$	92,581	$	6,388	$	(20,917)	$	(43,554)	$	34,498	$	(532,326)	$	(497,828)

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(1)Includes income earned from the CRE securities purchased at a discount, recognized using the effective interest method had the transaction been recorded as an available for sale security, at amortized cost. During the nine months ended September 30, 2020 and September 30, 2019, $1.6 million and $1.4 million, respectively, was attributable to discount accretion income and was eliminated in consolidation in the corporate segment. The corresponding interest expense is recorded in net interest income in the Corporate column.

Summary of Total Assets by Segment

The following table presents total assets by segment as of September 30, 2020 and December 31, 2019 (dollars in thousands):


	Core
Total Assets	Senior and Mezzanine Loans and Preferred Equity(1)		CRE Debt Securities		Net Leased Real Estate		Corporate(2)		Total Core Portfolio		Legacy, Non-Strategic Portfolio(3)		Total
September 30, 2020	$	1,831,043	$	1,805,418	$	1,022,527	$	1,200,207	$	5,859,195	$	652,462	$	6,511,657
December 31, 2019	2,464,963		2,226,448		1,181,609		496,714		6,369,734		1,044,572		7,414,306

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(1)Includes investments in unconsolidated ventures totaling $417.5 million and $585.0 million as of September 30, 2020 and December 31, 2019, respectively.

(2)Includes cash, unallocated receivables, deferred costs and other assets, net and the elimination of the subordinate tranches of the securitization trusts in consolidation.

(3)Includes PE Investments totaling $7.1 million and $10.3 million as of September 30, 2020 and December 31, 2019, respectively.

Schedule of Revenue by Geographic Areas

Geography information on total income and long lived assets are presented as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total income by geography:
United States	$	90,814	$	105,826	$	222,547	$	400,864
Europe	5,968		12,161		30,115		37,080
Other	—		(3)		—		32
Total(1)	$	96,782	$	117,984	$	252,662	$	437,976

Schedule of Long-lived Assets by Geographic Areas


	September 30, 2020		December 31, 2019
Long-lived assets by geography:
United States	$	931,300	$	1,282,189
Europe	287,899		315,369
Total(2)	$	1,219,199	$	1,597,558

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(1)Includes interest income, interest income on mortgage loans held in securitization trusts, property and other income and equity in earnings of unconsolidated ventures.

(2)Long-lived assets are comprised of real estate and real estate related intangible assets, and excludes financial instruments and assets held for sale.