We own interests in the Managed Programs and certain unconsolidated real estate investments with third parties. We account for our interests in these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences) or at fair value by electing the equity method fair value option available under GAAP.

We classify distributions received from equity method investments using the cumulative earnings approach. In general, distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, we do not exert control over, but we do have the ability to exercise significant influence over, the Managed Programs. Operating results of the Managed Programs are included in the Investment Management segment.


	% of Outstanding Shares Owned at				Carrying Amount of Investment at
	December 31,				December 31,
Fund	2022		2021		2022		2021
CPA:18 – Global (a)	100.000	%	5.578	%	$	—	$	60,836
CPA:18 – Global operating partnership	100.000	%	0.034	%	—		209
CESH (b)	2.430	%	2.430	%	2,225		3,689
					$	2,225	$	64,734

CPA:18 – Global — We received distributions from this investment during the years ended December 31, 2022, 2021, and 2020 of $1.6 million, $3.5 million, and $2.6 million, respectively. We received distributions from our investment in the CPA:18 – Global operating partnership during the years ended December 31, 2022, 2021, and 2020 of $8.7 million, $7.3 million, and $7.2 million, respectively (Note 4).

CESH — We have elected to account for our investment in CESH at fair value by selecting the equity method fair value option available under GAAP. We record our investment in CESH on a one quarter lag; therefore, the balance of our equity method investment in CESH recorded as of December 31, 2022 is based on the estimated fair value of our investment as of September 30, 2022. We received distributions from this investment during the years ended December 31, 2022 and 2021 of $1.2 million and $1.3 million, respectively. We did not receive distributions from this investment during the year ended December 31, 2020.

At December 31, 2021, the aggregate unamortized basis differences on our equity method investments in the Managed Programs were $23.3 million. During the third quarter of 2022, we recognized a gain on change in control of interests of approximately $22.5 million, which was the difference between the carrying value and the fair value of our previously held equity interest in shares of CPA:18 – Global’s common stock (Note 3). Following the close of the CPA:18 Merger, there are no such unamortized basis differences on our equity method investments in the Managed Programs.

We own equity interests in properties that are generally leased to companies through noncontrolling interests in partnerships and limited liability companies that we do not control but over which we exercise significant influence. The underlying investments are jointly owned with affiliates or third parties. We account for these investments under the equity method of accounting. In addition, we owned shares of WLT common stock, which we accounted for under the equity method of accounting as of December 31, 2021, but was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022, as described in Note 9. Operating results of our unconsolidated real estate investments are included in the Real Estate segment.

The following table sets forth our ownership interests in our equity method investments in real estate, excluding the Managed Programs, and their respective carrying values (dollars in thousands):


		Ownership Interest at	Carrying Value at December 31,
Lessee/Fund/Description	Co-owner	December 31, 2022	2022		2021
Existing Equity Method Investments
Las Vegas Retail Complex (a)	Third Party	N/A	$	196,352	$	104,114
Johnson Self Storage	Third Party	90%	65,707		67,573
Kesko Senukai (b)	Third Party	70%	38,569		41,955
Harmon Retail Corner (c)	Third Party	15%	24,649		24,435
WLT (d)	WLT	N/A	—		33,392

Equity Method Investments Consolidated After the CPA:18 Merger (e)
State Farm Mutual Automobile Insurance Co.	CPA:18 – Global	100%	—		7,129
Apply Sørco AS (f)	CPA:18 – Global	N/A	—		5,909
Bank Pekao (b) (g)	CPA:18 – Global	100%	—		4,460
Fortenova Grupa d.d. (b)	CPA:18 – Global	100%	—		2,936
			$	325,277	$	291,903

(c)This investment is reported using the hypothetical liquidation at book value model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement.

(d)At December 31, 2021, we owned 12,208,243 shares of common stock of WLT, which we accounted for as an equity method investment in real estate, but was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022 (Note 9). WLT completed its previously announced sale to private real estate funds in October 2022 (Note 9).

(e)We acquired the remaining interests in these investments from CPA:18 – Global in the CPA:18 Merger, subsequent to which we consolidated these wholly owned investments (Note 3).

(f)The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone. We sold this investment in December 2022, which was consolidated and wholly owned at the time of disposition.

(g)We recognized our $4.6 million proportionate share of an impairment charge recorded on this investment during the year ended December 31, 2022, which was reflected within Earnings (losses) from equity method investments in our consolidated statements of income. The estimated fair value of the investment is based on the estimated selling price of the international office facility owned by the investment, and the fair value of the non-recourse mortgage encumbering the property also approximates the fair value of the property.

We received aggregate distributions of $27.8 million, $18.6 million, and $17.8 million from our other unconsolidated real estate investments for the years ended December 31, 2022, 2021, and 2020, respectively. At December 31, 2022 and 2021, the aggregate unamortized basis differences on our unconsolidated real estate investments were $19.1 million and $7.9 million, respectively. During the third quarter of 2022, we recorded a gain on change in control of interests of approximately $11.4 million, which was the difference between our carrying values and the fair values of our previously held equity method investments in real estate consolidated after the CPA:18 Merger (Note 3).

On June 10, 2021, we entered into an agreement to fund a construction loan of approximately $261.9 million for a retail complex in Las Vegas, Nevada, at an interest rate of 6.0% and term of 36 months. Through December 31, 2022, we funded $193.2 million, with the remaining amount expected to be funded in 2023. We hold a purchase option for two net-leased units at the complex upon its completion, as well as an equity purchase option to acquire a 47.5% equity interest in the partnership that owns the borrower. As of the agreement date, we did not deem the exercise of the purchase options to be reasonably certain.

In accordance with ASC 810, Consolidation, we determined that this loan will not be consolidated, but due to the characteristics of the arrangement (including our participation in expected residual profits), the risks and rewards of the agreement are similar to those associated with an investment in real estate rather than a loan. Therefore, the loan will be treated as an implied investment in real estate (i.e., an equity method investment in real estate) for accounting purposes in accordance with the acquisition, development and construction arrangement sub-section of ASC 310, Receivables. Equity income from this investment was $10.1 million and $3.0 million for the years ended December 31, 2022 and 2021, respectively, which was recognized within Earnings (losses) from equity method investments in our consolidated statements of income.