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(1)	For purposes of this Annual Report only, includes all outstanding common stock other than common stock held directly by the registrant's directors and executive officers.

1.	Portions of the registrant's definitive proxy statement for the registrant's 2020 Annual Meeting, to be filed within 120 days after the close of the registrant's fiscal year, are incorporated by reference into Part III of this Annual Report on Form 10-K.

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•	Targeting custom-tailored opportunities where customers require flexible financial solutions and "one-call" responsiveness, such as a joint offering of a SAFE Ground Lease and an iStar leasehold loan;

•	Acquiring a fee simple interest in a commercial property that we intend to bifurcate into a SAFE Ground Lease to be acquired by SAFE and a leasehold interest which we may sell or hold for investment;

•	Avoiding commodity businesses where there is significant direct competition from other providers of capital;

•	Developing direct relationships with borrowers and corporate customers in addition to sourcing transactions through intermediaries;

•	Adding value beyond simply providing capital by offering borrowers and corporate customers specific lending and Ground Lease expertise, flexibility, certainty of closing and continuing relationships beyond the closing of a particular transaction;

•	Taking advantage of market anomalies in the real estate capital markets when, in the Company's view, credit is mispriced by other providers of capital; and

•	Evaluating relative risk adjusted returns across multiple investment markets.

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•	the size of the market for Ground Leases may not meet our estimates. Potential tenants may prefer to own both the land and the improvements they intend to develop, rehabilitate or own. Negative publicity about the experience of tenants with non-Safehold Ground Leases may also discourage potential tenants;

•	as and when interest rates increase, there may be less activity generally in real estate transactions, including leasing, development and financing, and less financing available for SAFE to refinance its debt obligations or for potential tenants to finance their leasehold interests;

•	if SAFE suffers adverse business developments, the market value of our investment in SAFE will likely decline and may decline materially, the management fees we receive from SAFE may not grow as anticipated and/or SAFE may reduce its distributions to stockholders, including us, all of which may adversely affect our stock price and our ability to pay distributions;

•	there are potential conflicts of interests in our relationship with SAFE, as discussed further below under "There are various conflicts of interest in our relationship with SAFE, including our executive officers and/or directors who are also officers and/or directors of SAFE, which could result in decisions that are not in the best interests of our stockholders";

•	we have waived or elected not to seek reimbursement in full for certain expenses that we have incurred on SAFE's behalf while it is in its growth stage, and will likely continue to do so while we foster SAFE's growth; and

•	if we terminate our management agreement with SAFE for convenience, we will be prohibited from competing with SAFE for one year after such termination.

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•	adverse changes in international, regional or local economic and demographic conditions;

•	tenant vacancies and market pressures to offer tenant incentives to sign or renew leases;

•	adverse changes in the financial position or liquidity of tenants;

•	the inability to collect rent from tenants;

•	tenant bankruptcies;

•	higher costs resulting from capital expenditures and property operating expenses;

•	civil disturbances, hurricanes and other natural disasters, or terrorist acts or acts of war, which may result in uninsured or underinsured losses;

•	liabilities under environmental laws;

•	risks of loss from casualty or condemnation;

•	changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws; and

•	the other risks described under "We are subject to additional risks associated with owning and developing property."

•	We must incur costs to carry these assets and in some cases make repairs to defects in construction, make improvements to, or complete the assets, which requires additional liquidity and results in additional expenses that could exceed our original estimates and impact our operating results.

•	Real estate projects are not liquid and, to the extent we need to raise liquidity through asset sales, we may be limited in our ability to sell these assets in a short-time frame.

•	Uncertainty associated with economic conditions, rezoning, obtaining governmental permits and approvals, concerns of community associations, reliance on third party contractors, increasing commodity costs and threatened or pending litigation may materially delay our completion of rehabilitation and development activities and materially increase their cost to us.

•	The values of our real estate investments are subject to a number of factors outside of our control, including changes in the general economic climate, changes in interest rates and the availability of attractive financing, over-building or decreasing demand in the markets where we own assets, and changes in law and governmental regulations.

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•

Reduced Tax Rates. The highest individual U.S. federal income tax rate on ordinary income is reduced from 39.6% to 37% (through taxable years ending in 2025), and the maximum corporate income tax rate is reduced from 35% to 21%. In addition, individuals, trust, and estates that own our stock are permitted to deduct up to 20% of dividends received from us (other than dividends that are designated as capital gain dividends or qualified dividend income), generally resulting in an effective maximum U.S. federal income tax rate of 29.6% on such dividends (through taxable years ending in 2025). Further, the amount that we are required to withhold on distributions to non-U.S. stockholders that are treated as attributable to gains from our sale or exchange of U.S. real property interests is reduced from 35% to 21%.

•	Net Operating Losses. We and our TRSs may not use net operating losses generated beginning in 2018 to offset more than 80% of our taxable income (determined without regard to the dividends paid deduction). Net operating losses generated beginning in 2018 can be carried forward indefinitely but can no longer be carried back.

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Limitation on Interest Deductions. The amount of net interest expense that certain taxpayers, including us and our TRSs, may deduct for a taxable year is limited to the sum of: (i) the taxpayer's business interest income for the taxable year; and (ii) 30% of the taxpayer's "adjusted taxable income" for the taxable year. For taxable years beginning before January 1, 2022, adjusted taxable income means earnings before interest, taxes, depreciation, and amortization ("EBITDA"); for taxable years beginning on or after January 1, 2022, adjusted taxable income is limited to earnings before interest and taxes ("EBIT"). Certain electing businesses, including electing real estate businesses, may elect out of the foregoing limitation.

•	Alternative Minimum Tax. The corporate alternative minimum tax is eliminated.

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(1)	We may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans.

(1)

Restricted Stock—The amount shown in column (a) includes 598,729 unvested restricted stock units which may vest in the future based on the employees' continued service to the Company (see Item 8—"Financial Statements and Supplemental Data—Note 15" for a more detailed description of the Company's restricted stock grants). Substantially all of the restricted stock units included in column (a) are required to be settled on a net, after-tax basis (after deducting shares for minimum required statutory withholdings); therefore, the actual number of shares issued will be less than the gross amount of the awards. The amount shown in column (a) also includes 244,360 of common stock equivalents and restricted stock awarded to our non-employee directors in consideration of their service to the Company as directors. Common stock equivalents represent rights to receive shares of common stock at the date the common stock equivalents are settled. Common stock equivalents have dividend equivalent rights beginning on the date of grant. The amount in column (c) represents the aggregate amount of stock options, shares of restricted stock units or other performance awards that could be granted under compensation plans approved by the Company's security holders after giving effect to previously issued awards of stock options, shares of restricted stock units and other performance awards (see Item 8—"Financial Statements and Supplemental Data—Note 15" for a more detailed description of the Company's Long-Term Incentive Plans).

(2)

The amount shown in column (a) does not include a currently indeterminable number of shares that may be issued upon the satisfaction of performance and vesting conditions of awards made under the Company's Performance Incentive Plan ("iPIP") approved by shareholders. In no event may the number of shares issued exceed the amount available in column (c) unless shareholders authorize additional shares (see Item 8—"Financial Statements and Supplemental Data—Note 15" for a more detailed description of iPIP.)

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(1)	Refer to Note 3 and Note 5 for more information on "Interest income from sales-type leases" and "Selling profit from sales-type leases." Refer to Note 8 for more information on "Gain on consolidation of equity method investment."

(2)	All of the Company's outstanding HPUs were repurchased and retired on August 13, 2015. Participating Security holders were non-employee directors who held unvested common stock equivalents and restricted stock awards granted under the Company's Long Term Incentive Plans that were eligible to participate in dividends (see Item 8—"Financial Statements and Supplemental Data—Note 15 and 16).

(3)	See Item 8—"Financial Statements and Supplemental Data—Note 16."

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(1)	Refer to Note 5.

(2)	Total equity includes $197.5 million and $201.1 million, respectively, of noncontrolling interests as of December 31, 2019 and 2018.

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Improved Credit Profile: In 2019, we refinanced or repaid an aggregate $1.5 billion of indebtedness, primarily using net proceeds from issuances of $1.325 billion in aggregate principal amount of new unsecured notes in capital markets transactions and proceeds from asset sales. In addition, a purchaser of a portfolio of net lease assets assumed $228.0 million of indebtedness collateralized by those assets (refer to Note 4). Through these transactions we reduced our interest costs and improved our debt maturity. We have no corporate debt maturities through September 2022. We also enhanced our equity base with the issuance of approximately 16.5 million shares of common stock upon conversions of our Series J preferred stock by the holders thereof. Our efforts to improve our credit profile have resulted in one or more ratings upgrades from each of the three principal national ratings agencies since the third quarter of 2017.

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Simplifying Our Business: During 2019, we further reduced the size of our legacy asset portfolio by 10% based on gross book value. As of December 31, 2019, the aggregate gross book value of our legacy asset portfolio was $901 million. We intend to continue to reduce the size of the legacy portfolio. We have used the net proceeds from these sales to make additional investments in our Ground Lease business, to pay down debt and for other working capital purposes and we expect these trends to continue.

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Scaling Our Ground Lease Business: In early 2019, we announced that we would focus our new business activities on scaling our Ground Lease business. In January 2019, we made an additional $250.0 million equity investment in SAFE at a price of $20.00 per share, amended and restated our management agreement with SAFE and entered into certain governance arrangements with SAFE. Since that January 2019 transaction, we participated alongside public investors in two equity offerings by SAFE in which we invested an aggregate $298.0 million. SAFE invested the net proceeds of these equity offerings in additional Ground Leases and increased its portfolio from $947 million as of December 31, 2018 to $2.7 billion as of December 31, 2019. As of December 31, 2019, we owned 65.2% of SAFE's outstanding common stock and the market value of our shares of SAFE was $1.3 billion. We believe that our Ground Lease strategy is consistent with our history of innovation in the commercial real estate finance and net lease sectors.

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(1)	Non-performing loans are presented net of asset-specific loan loss reserves of $21.7 million and $40.4 million, respectively, as of December 31, 2019 and 2018.

(2)	As of December 31, 2019, includes a $44.3 million financing receivable related to the acquisition of bowling centers from one of our lessees (refer to Note 5).

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(1)	As of December 31, 2019 and 2018, includes $400.4 million and $461.3 million, respectively, of loans with a weighted average LIBOR floor of 1.3% and 1.1%, respectively.

(2)	Non-performing loans are presented net of asset-specific loan loss reserves of $21.7 million and $40.4 million, respectively, as of December 31, 2019 and 2018.

(1)	Year of maturity represents the initial maturity and does not include any extension options. As of December 31, 2019, our real estate finance portfolio had a weighted average remaining term, exclusive of any borrower extension options, of 2.3 years.

(2)	Non-performing loans are presented net of asset-specific loan loss reserves of $21.7 million.

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•	limits our discretionary voting power to 41.9% of the outstanding voting power of SAFE's Common Stock until our aggregate ownership of SAFE common stock is less than 41.9%;

•	requires us to cast all of our voting power in favor of three director nominees to SAFE's board who are independent of each of us and SAFE for three years;

•	subjects us to certain standstill provisions for two years;

•	restricts our ability to transfer shares of SAFE common stock issued in exchange for Investor Units, or "Exchange Shares," for one year after their issuance;

•	prohibits us from transferring shares of SAFE common stock representing more than 20% of the outstanding SAFE common stock in one transaction or a series of related transactions to any person or group, other than

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•	provides us certain preemptive rights.

(2)	Gross book value represents the acquisition cost of real estate and any additional capital invested into the property by us. For SAFE, includes its 54.8% pro rata share of its unconsolidated equity method investment.

(3)	Weighted average lease term is calculated using GAAP rent and the initial maturity and does not include extension options. For SAFE, includes its 54.8% pro rata share of its unconsolidated equity method investment.

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(1)	Reflects the percentage of annualized operating lease income and interest income from sales-type leases for leases in-place as a percentage of annualized total revenue.

(2)	Represents the initial maturity and does not include extension options.

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(1)	Reflects the percentage of annualized operating lease income for leases in-place as a percentage of annualized total revenue.

(2)	Includes office leases expiring in commercial properties as well as month-to-month and short term license agreements within our retail properties.

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(2)	Represents gross book value of the assets sold, rather than proceeds received.

(3)	For Asbury Ocean Club and Asbury Park Waterfront, other represents assets transferred to the operating properties segment. For All Others, includes the acquisition of a land and development asset from an unconsolidated entity in which we owned a noncontrolling 50% equity interest (refer to Note 6).

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(1)	Change primarily due to a $42.6 million increase from the consolidation of the Net Lease Venture on June 30, 2018, an increase of $17.0 million from acquiring new assets in 2019, partially offset by a decrease of $15.8 million from the reclassification of certain operating leases as sales-type leases in May 2019 (refer to Note 5) and $18.1 million from asset sales and lease amendments.

(2)	Change primarily due to asset sales in 2019 and 2018.

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(1)	Occupancy as of December 31, 2019 and 2018.

(1)	Change primarily due to a sale of assets, partially offset by new assets beginning operations in 2019.

(2)	Change primarily due to asset sales, a decrease in legal costs at certain properties and other properties being moved to operating properties after beginning operations, partially offset by new land and development assets and an increase in marketing costs at certain of our properties.

(3)	Change primarily due to acquiring new assets in 2019 and the consolidation of the Net Lease Venture on June 30, 2018, partially offset by asset sales.

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(1)	For the years ended December 31, 2019 and 2018, includes performance based compensation related to our Performance Incentive Plans and Annual Incentive Plan. Please refer to Note 15 - Stock-Based Compensation Plans and Employee Benefits for a description of the Performance Incentive Plans.

(2)	Represents costs associated with terminated employees.

(1)	During the year ended December 31, 2019, we sold a portfolio of net lease assets with an aggregate carrying value of $220.4 million and recognized gains of $219.7 million in "Income from sales of real estate" in our consolidated statements of operations.

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(1)	Depreciation and amortization also includes our proportionate share of depreciation and amortization expense for equity method investments and excludes the portion of depreciation and amortization expense allocable to noncontrolling interests.

(2)	Impairment of assets also includes impairments on equity method investments recorded in "Earnings from equity method investments" in our consolidated statements of operations.

(3)

Adjusted Income for the year ended December 31, 2018, as previously reported, included a $75.9 million add-back attributable to aggregate deferred gains on our retained interests in entities to which we sold or contributed properties prior to 2018 and a $3.3 million add-back for depreciation related to such properties. We recognized those gains in our GAAP retained earnings as of January 1, 2018 when we adopted a new accounting standard that mandated such recognition. We retrospectively modified our presentation of Adjusted Income for 2018 and 2017, as shown in the table above, to reflect the effects of the dispositions in the periods in which they occurred. Adjusted Income for the year ended December 31, 2017 shown in the table above includes $55.5 million of the aggregate deferred gain, which resulted from the sale of our Ground Lease business to SAFE in the second quarter of 2017. The remaining $23.7 million of the aggregate deferred gains are not shown in the table above because the disposition transactions occurred prior to 2017. Adjusted Income as previously reported (i.e., prior to the retrospective modification) for the years ended December 31, 2018 and 2017 was $222.3 million and $214.6 million, respectively.

(4)	Represents the impact of charge-offs and dispositions realized during the period. These charge-offs and dispositions were on assets that were previously impaired for GAAP and reflected in net income but not in Adjusted Income.

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(1)	We repaid the remaining $110.5 million aggregate principal amount of the 6.00% senior unsecured notes due 2022 in January 2020 (refer to 11).

(2)	Variable-rate debt assumes one-month LIBOR of 1.76% and three-month LIBOR of 1.91% that were in effect as of December 31, 2019.

(3)	Refer to Note 10 to the consolidated financial statements.

(4)	We are obligated to pay ground rent under certain operating leases; however, our tenants at the properties pay this expense directly under the terms of various subleases and these amounts are excluded from lease obligations.

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(1)

The Senior Term Loan and the Revolving Credit Facility are secured only by pledges of equity of certain of our subsidiaries and not by pledges of the assets held by such subsidiaries. Such subsidiaries are subject to contractual restrictions under the terms of such credit facilities, including restrictions on incurring new debt (subject to certain exceptions). As of December 31, 2019, Collateral Assets includes $438.7 million carrying value of assets held by entities whose equity interests are pledged as collateral for the Revolving Credit Facility that is undrawn as of December 31, 2019.

(2)	As of December 31, 2019 and 2018, the amounts presented exclude general reserves for loan losses of $6.9 million and $13.0 million, respectively.

(3)	As of December 31, 2019 and 2018, the amounts presented exclude loan participations of $35.6 million and $22.5 million, respectively.

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(1)	Excludes $14.3 million of commitments on loan participations sold that are not our obligation.

(2)	Includes a commitment to invest up to $55.0 million in additional bowling centers over the next several years (refer to Note 5).

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(1)	We have an overall net variable-rate asset position, which results in an increase in net income when rates increase and a decrease in net income when rates decrease. As of December 31, 2019, $400.4 million of our floating rate loans have a cumulative weighted average LIBOR floor of 1.3% and $35.7 million of our floating rate debt has a cumulative weighted average interest rate floor of 0.4%.

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•	We tested the effectiveness of controls over management’s identification of events or changes in circumstances that would lead to an impairment, estimate of future cashflows used to determine fair value, including controls over management selection of the hold period, discount rates, growth rates, and capitalization rates.

•	We evaluated management’s assessment of events or changes in circumstances that would lead to an impairment, such as identifying when an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life by:

–	Discussing with management and Company personnel responsible for real estate investment strategy to determine if management’s intent regarding the hold period had changed;

–	Read meeting minutes to identify any evidence that may contradict management’s estimate of the hold period for indicators that it is likely a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life; and

–	Compared the recorded value for those long-lived assets which are being marketed for sale to any current purchase offers and identified those properties where potential sale proceeds may be less than the recorded value.

•	We evaluated management’s ability to forecast future cashflows by comparing actual results to management’s historical forecasts.

•	We evaluated the reasonableness of management’s future cashflows by comparing the forecasts to:

–	Historical revenues, expenses, and capital expenditures;

–	Internal communications to management and the Board of Directors; and

–	Recently executed agreements, market rent comparables, and expense growth expectations in the industry.

•	With the assistance of our fair value specialists, we evaluated the reasonableness of the fair value of the impaired asset and consistency with external data from other sources.

•	We tested the effectiveness of controls over the asset-specific reserves for loan losses, including management’s controls over the identification of impairment indicators, determination of risk ratings, present value of payments to be received, and the fair value of collateral.

•	With the assistance of our fair value specialists, we evaluated loans for potential impairment by:

–	Evaluating the accuracy and determining the relevance of the factors utilized during the Company’s evaluation;

–	Analyzing period over period changes on items, such as net operating income, debt service coverage ratio, occupancy, cash flow volatility, leasing and tenant profile, loan structure, exit plan, and project sponsorship, to determine impact on loan performance;

–	Evaluating the financial performance of the collateral associated with each loan; and

–	Evaluating the impact of macroeconomic and microeconomic events on the borrower, sponsor, or asset type.

•	We reviewed remittance for loans in the Company’s portfolio to corroborate that the borrowers had the ability to pay their obligations in accordance with the loan agreements.

•	With the assistance of our fair value specialists, we evaluated the reasonableness and financial performance of the collateral values and consistency with external data from other sources.

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•	We tested the effectiveness of controls over the net investment in leases, including management’s controls over the modification of leases, the identification of separate lease components, and the valuation methodology for estimating the fair value of assets and liabilities.

•	We assessed the reasonableness of the lease modification and management’s classification analysis by comparing the extension term, remaining economic life, present value of the lease payments, and projected cash flows associated with the modified lease to in-place lease agreements.

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With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, (3) cost to replace certain assets, and (4) assumptions used in the discounted cash flows, including testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing our estimates to those used by management.

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(1)	Amounts were reclassified to "Earnings (losses) from equity method investments" in the Company's consolidated statements of operations.

(2)	Reclassified to "Interest expense" in the Company's consolidated statements of operations are $1,861, $388 and $64 for the years ended December 31, 2019, 2018 and 2017, respectively. Amount reclassified to "Gain on consolidation of equity method investment" in the Company's consolidated

statements of operations is $1,876 for the year ended December 31, 2018. Reclassified to "Earnings (losses) from equity method investments" in the Company's consolidated statements of operations are $184, $(20) and $304, respectively, for the years ended December 31, 2019, 2018 and 2017. Amount reclassified to "Other expense" in the Company's consolidated statements of operations is $11,673 for the year ended December 31, 2019 resulting from hedged forecasted transactions becoming not probable to occur. Amount reclassified to "Income from sales of real estate" in the Company's consolidated statements of operations is $806 for the year ended December 31, 2019.

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(1)	Refer to Note 14 for details on the Company's Preferred Stock.

(2)	Net of payments for withholding taxes upon vesting of stock-based compensation.

(3)	For the year ended December 31, 2017, net income shown above excludes $1,327 of net loss attributable to redeemable noncontrolling interests.

(4)	Represents the amount paid in excess of its carrying value to acquire a redeemable noncontrolling interest.

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Business—iStar Inc. (the "Company") finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. The Company also manages entities focused on ground lease and net lease investments (refer to Note 8). The Company has invested over $40 billion of capital over the past two decades and is structured as a real estate investment trust ("REIT") with a diversified portfolio focused on larger assets located in major metropolitan markets. The Company's primary reportable business segments are real estate finance, net lease, operating properties and land and development (refer to Note 18).

Organization—The Company began its business in 1993 through the management of private investment funds and became publicly traded in 1998. Since that time, the Company has grown through the origination of new investments and corporate acquisitions.

Basis of Presentation—The accompanying audited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation—The consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, controlled partnerships and VIEs for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The Company's involvement with VIEs affects its financial performance and cash flows primarily through amounts recorded in "Operating lease income," "Interest income," "Earnings from equity method investments," "Real estate expense" and "Interest expense" in the Company's consolidated statements of operations. The Company has provided no financial support to those VIEs that it was not previously contractually required to provide.    

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Consolidated VIEs—The Company consolidates VIEs for which it is considered the primary beneficiary. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE's respective assets. The Company did not have any unfunded commitments related to consolidated VIEs as of December 31, 2019. The following table presents the assets and liabilities of the Company's consolidated VIEs as of December 31, 2019 and 2018 ($ in thousands):

	As of
	December 31, 2019				December 31, 2018
ASSETS
Real estate
Real estate, at cost	$	891,000			$	848,052
Less: accumulated depreciation	(37,542		)		(15,365		)
Real estate, net	853,458				832,687
Land and development, net	273,617				279,031
Other investments	45				72
Cash and cash equivalents	19,112				25,219
Accrued interest and operating lease income receivable, net	1,208				1,302
Deferred operating lease income receivable, net	19,547				8,972
Deferred expenses and other assets, net	134,117				167,324
Total assets	$	1,301,104			$	1,314,607
LIABILITIES
Accounts payable, accrued expenses and other liabilities	$	107,455			$	106,907
Debt obligations, net	482,918				485,000
Total liabilities	590,373				591,907

The following paragraphs describe the impact on the Company's consolidated financial statements from the adoption of Accounting Standards Updates ("ASUs") on January 1, 2019.

ASU 2016-02 and ASU 2018-11—Accounting Standards Update ("ASU") 2016-02, Leases ("ASU 2016-02") required the recognition of right-of-use lease assets and lease liabilities by the Company as lessee for those leases classified as operating or finance leases, both measured at the present value of the lease payments, on its consolidated balance sheets. For operating lease arrangements as of December 31, 2018 for which the Company was the lessee, primarily under leases of office space and certain ground leases, the Company recorded operating lease right-of-use assets of $31.6 million in "Deferred expenses and other assets, net" and operating lease liabilities of $31.6 million in "Accounts payable, accrued expenses and other liabilities" on its consolidated balance sheets. In addition, the Company entered into finance leases in 2019, and as of December 31, 2019, recorded finance lease right-of-use assets of $145.2 million in "Deferred expenses and other assets, net" and finance lease liabilities of $147.7 million in "Accounts payable, accrued expenses and other liabilities" on its consolidated balance sheets (refer to Significant Accounting Policies below).

The Company, as lessor, classifies certain of its leases on net lease properties as sales-type leases and records the leases as "Net investment in leases" on the Company's consolidated balance sheets (refer to Note 5). For the Company's leases which qualify as sales-type leases, the Company records "Interest income from sales-type leases" in the Company's consolidated statements of operations. The amount recorded as interest income from sales-type leases in any given period will likely be different than the straight-line lease income that would have been recorded under the superseded guidance.

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Management elected the practical expedient package that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019; and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. In addition, the Company elected to not record on its consolidated balance sheets leases whose term is less than 12 months at lease inception.

ASU 2018-11, Leases amended ASU 2016-02 so that: (i) entities could elect to not recast the comparative periods presented when transitioning to ASC 842 by allowing entities to change their initial application to the beginning of the period of adoption; and (ii) provided lessors with a practical expedient to not separate non-lease components from the associated lease component of the contractual payments if certain conditions are met. Management elected both of these provisions.

ASU 2018-16—ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes was issued in October 2018 and expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. The adoption of ASU 2018-16 did not have a material impact on the Company's consolidated financial statements.

Significant Accounting Policies

Real estate and land and development—Real estate and land and development assets are recorded at cost less accumulated depreciation and amortization, as follows:

Capitalization and depreciation—Certain improvements and replacements are capitalized when they extend the useful life of the asset. For real estate projects, the Company begins to capitalize qualified development and construction costs, including interest, real estate taxes, compensation and certain other carrying costs incurred which are specifically identifiable to a development project once activities necessary to get the asset ready for its intended use have commenced. If specific allocation of costs is not practicable, the Company will allocate costs based on relative fair value prior to construction or relative sales value, relative size or other methods as appropriate during construction. The Company’s policy for interest capitalization on qualifying real estate assets is to use the average amount of accumulated expenditures during the period the asset is being prepared for its intended use, which is typically when physical construction commences, and a capitalization rate which is derived from specific borrowings on the qualifying asset or the Company’s corporate borrowing rate in the absence of specific borrowings. The Company ceases capitalization on the portions substantially completed and ready for their intended use. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method of cost recovery over the estimated useful life, which is generally 40 years for facilities, five years for furniture and equipment, the shorter of the remaining lease term or expected life for tenant improvements and the remaining useful life of the facility for facility improvements.

Purchase price allocation—Upon acquisition of real estate, the Company determines whether the transaction is a business combination, which is accounted for under the acquisition method, or an acquisition of assets. For both types of transactions, the Company recognizes and measures identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree based on their relative fair values. For business combinations, the Company recognizes and measures goodwill or gain from a bargain purchase, if applicable, and expenses acquisition-related costs in the periods in which the costs are incurred and the services are received. For acquisitions of assets, acquisition-related costs are capitalized and recorded in "Real estate, net" on the Company's consolidated balance sheets.

The Company accounts for its acquisition of properties by recording the purchase price of tangible and intangible assets and liabilities acquired based on their estimated fair values. The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant. Intangible assets may include the value of lease incentive assets, above-market leases and in-place leases which are each recorded at their estimated fair values and included in “Deferred expenses and other assets, net” on the Company's consolidated balance sheets. Intangible liabilities may include the value of below-market leases, which are recorded at their estimated fair values and included in “Accounts payable, accrued expenses and other liabilities” on the Company's consolidated balance sheets. In-place leases are amortized over the remaining non-cancelable term and the amortization expense is included in "Depreciation and amortization" in the Company's consolidated statements of operations. Lease incentive assets and above-market (or below-market) lease value is amortized as a reduction of (or, increase to) operating lease income over the remaining non-cancelable term of each lease plus any renewal periods with fixed rental terms that

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are considered to be below-market. The Company may also engage in sale/leaseback transactions and execute leases with the occupant simultaneously with the purchase of the asset. These transactions are accounted for as asset acquisitions.

Impairments—The Company reviews real estate assets to be held for use and land and development assets, for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The value of a long-lived asset held for use and land and development assets are impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate assets and land and development assets are recorded in "Impairment of assets" in the Company's consolidated statements of operations.

Real estate available and held for sale—The Company reports real estate assets to be sold at the lower of their carrying amount or estimated fair value less costs to sell and classifies them as “Real estate available and held for sale” on the Company's consolidated balance sheets. If the estimated fair value less costs to sell is less than the carrying value, the difference will be recorded as an impairment charge. Impairment for real estate assets disposed of or classified as held for sale are included in "Impairment of assets" in the Company's consolidated statements of operations. Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.

The Company classifies its real estate assets as held for sale in the period in which all of the following conditions are met: (i) the Company commits to a plan and has the authority to sell the asset; (ii) the asset is available for sale in its current condition; (iii) the Company has initiated an active marketing plan to locate a buyer for the asset; (iv) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months; (v) the asset is being actively marketed for sale at a price that is reflective of its current fair value; and (vi) the Company does not anticipate changes to its plan to sell the asset.

If circumstances arise that were previously considered unlikely and, as a result the Company decides not to sell a property previously classified as held for sale, the property is reclassified as held and used and included in "Real estate, net" on the Company's consolidated balance sheets. The Company measures and records a property that is reclassified as held and used at the lower of: (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used; or (ii) the estimated fair value at the date of the subsequent decision not to sell.

Dispositions—Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with Accounting Standards Codification ("ASC") 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. The Company primarily uses specific identification and the relative sales value method to allocate costs. Gains on sales of real estate are included in "Income from sales of real estate" in the Company's consolidated statements of operations.

Net Investment in Leases—Net investment in leases are recognized when the Company's leases qualify as sales-type leases. The net investment in leases is initially measured at the present value of the fixed and determinable lease payments, including any guaranteed or unguaranteed residual value of the asset at the end of the lease, discounted at the rate implicit in the lease. Acquisition-related costs are capitalized and recorded in "Net Investment in Leases" on the Company's consolidated balance sheets. If a lease qualifies as a sales-type lease, it is further evaluated to determine whether the transaction is considered a sale leaseback transaction. If the sales-type lease does not qualify as a sale leaseback transaction, the lease is considered a financing receivable and is recognized in accordance with ASC 310 (refer to Note 5) and recorded in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheets.

Loans receivable and other lending investments, net—Loans receivable and other lending investments, net includes the following investments: senior mortgages, corporate/partnership loans, subordinate mortgages, preferred equity investments and debt securities. Management considers nearly all of its loans to be held-for-investment, although certain investments may be classified as held-for-sale or available-for-sale.

Loans receivable classified as held-for-investment and debt securities classified as held-to-maturity are reported at their outstanding unpaid principal balance, and include unamortized acquisition premiums or discounts and unamortized deferred loan costs or fees. These loans and debt securities also include accrued and paid-in-kind interest and accrued exit fees that the Company

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determines are probable of being collected. Debt securities classified as available-for-sale are reported at fair value with unrealized gains and losses included in "Accumulated other comprehensive income (loss)" on the Company's consolidated balance sheets.

Loans receivable and other lending investments designated for sale are classified as held-for-sale and are carried at lower of amortized historical cost or estimated fair value. The amount by which carrying value exceeds fair value is recorded as a valuation allowance. Subsequent changes in the valuation allowance are included in the determination of net income (loss) in the period in which the change occurs.

For held-to-maturity and available-for-sale debt securities held in "Loans receivable and other lending investments, net," management evaluates whether the asset is other-than-temporarily impaired when the fair market value is below carrying value. The Company considers debt securities other-than-temporarily impaired if: (1) the Company has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery; or (3) it does not expect to recover the entire amortized cost basis of the security. If it is determined that an other-than-temporary impairment exists, the portion related to credit losses, where the Company does not expect to recover its entire amortized cost basis, will be recognized as an "Impairment of assets" in the Company's consolidated statements of operations. If the Company does not intend to sell the security and it is more likely than not that the entity will not be required to sell the security, but the security has suffered a credit loss, the impairment charge will be separated. The credit loss component of the impairment will be recorded as an "Impairment of assets" in the Company's consolidated statements of operations, and the remainder will be recorded in "Accumulated other comprehensive income (loss)" on the Company's consolidated balance sheets.

The Company acquires properties through foreclosure or by deed-in-lieu of foreclosure in full or partial satisfaction of non-performing loans. Based on the Company's strategic plan to realize the maximum value from the collateral received, property is classified as "Land and development, net," "Real estate, net" or "Real estate available and held for sale" at its estimated fair value when title to the property is obtained. Any excess of the carrying value of the loan over the estimated fair value of the property (less costs to sell for assets held for sale) is charged-off against the reserve for loan losses as of the date of foreclosure.

Equity method investments—Equity interests are accounted for pursuant to the equity method of accounting if the Company can significantly influence the operating and financial policies of an investee. This is generally presumed to exist when ownership interest is between 20% and 50% of a corporation, or greater than 5% of a limited partnership or certain limited liability companies. The Company's periodic share of earnings and losses in equity method investees is included in "Earnings from equity method investments" in the consolidated statements of operations. Equity method investments are included in "Other investments" on the Company's consolidated balance sheets. The Company also has equity interests that are not accounted for pursuant to the equity method of accounting. These equity interests are carried at cost, plus or minus any changes in value identified through observable comparable price changes in transactions in identical or similar investments of the same entity. The changes in fair value for these investments are included in "Other income" in the consolidated statements of operations.

To the extent that the Company contributes assets to an unconsolidated subsidiary, the Company’s investment in the subsidiary is recorded at the Company’s cost basis in the assets that were contributed to the unconsolidated subsidiary. To the extent that the Company’s cost basis is different from the basis reflected at the subsidiary level, when required, the basis difference is amortized over the life of the related assets and included in the Company’s share of equity in net income (loss) of the unconsolidated subsidiary, as appropriate. The Company recognizes gains on the contribution of real estate to unconsolidated subsidiaries, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale. The Company recognizes a loss when it contributes property to an unconsolidated subsidiary and receives a disproportionately smaller interest in the subsidiary based on a comparison of the carrying amount of the property with the cash and other consideration contributed by the other investors.

The Company periodically reviews equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges are recorded in "Earnings from equity method investments" in the Company's consolidated statements of operations.

Cash and cash equivalents—Cash and cash equivalents include cash held in banks or invested in money market funds with original maturity terms of less than 90 days.

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Restricted cash—Restricted cash represents amounts required to be maintained under certain of the Company's debt obligations, loans, leasing, land development, sale and derivative transactions. Restricted cash is included in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets. The following table provides a reconciliation of the cash and cash equivalents and restricted cash reported in the Company's consolidated balance sheets that total to the same amount as reported in the consolidated statements of cash flows (in thousands):

		December 31, 2019				December 31, 2018				December 31, 2017				December 31, 2016
Cash and cash equivalents		$	307,172			$	931,751			$	657,688			$	328,744
Restricted cash included in deferred expenses and other assets, net		45,034				42,793				20,045				25,883
Total cash, cash equivalents and restricted cash reported in the consolidated statements of cash flows		$	352,206			$	974,544			$	677,733			$	354,627

Variable interest entities—The Company evaluates its investments and other contractual arrangements to determine if they constitute variable interests in a VIE. A VIE is an entity where a controlling financial interest is achieved through means other than voting rights. A VIE is consolidated by the primary beneficiary, which is the party that has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This overall consolidation assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision making powers, their impact on the VIE's economic performance, and related party relationships. Where qualitative assessment is not conclusive, the Company performs a quantitative analysis. The Company reassesses its evaluation of the primary beneficiary of a VIE on an ongoing basis and assesses its evaluation of an entity as a VIE upon certain reconsideration events.

Deferred expenses and other assets / Accounts payable, accrued expenses and other liabilities—Deferred expenses and other assets include certain non-tenant receivables, leasing costs, lease incentives and financing fees associated with revolving-debt arrangements. Financing fees associated with other debt obligations are recorded as a reduction of the carrying value of "Debt obligations, net" and "Loan participations payable, net" on the Company's consolidated balance sheets. Lease incentives and leasing costs that include brokerage, legal and other costs are amortized over the life of the respective leases and presented as an operating activity in the Company's consolidated statements of cash flows. External fees and costs incurred to obtain long-term debt financing have been deferred and are amortized over the term of the respective borrowing using the effective interest method. Amortization of leasing costs is included in "Depreciation and amortization" and amortization of deferred financing fees is included in "Interest expense" in the Company's consolidated statements of operations.

Effective January 1, 2019 with the adoption of ASU 2016-02, the Company, as lessee, records right-of-use lease assets in "Deferred expenses and other assets" and lease liabilities in "Accounts payable, accrued expenses and other liabilities" on its consolidated balance sheets for operating and finance leases, both measured at the present value of the fixed and determinable lease payments. Some of the Company's lease agreements include extension options, which are not included in the lease payments unless the extensions are reasonably certain to be exercised. For operating leases, the Company recognizes a single lease cost for office leases in "General and administrative" and a single lease cost for ground leases in "Real estate expense" in the consolidated statements of operations, calculated so that the cost of the lease is allocated generally on a straight-line basis over the term of the lease, and classifies all cash payments within operating activities in the consolidated statements of cash flows. For finance leases, the Company recognizes amortization of the right-of-use assets on a straight-line basis over the term of the lease in "Depreciation and amortization" and interest expense on the lease liability using the effective interest method in "Interest expense" in the consolidated statements of operations. Repayments of the principal portion of the finance lease liability are classified within financing activities in the consolidated statements of cash flows and payments of interest on a finance lease liability are classified within operating activities in the consolidated statement of cash flows.

Identified intangible assets and liabilities—Upon the acquisition of a business or an asset, the Company records intangible assets or liabilities acquired at their estimated fair values and determines whether such intangible assets or liabilities have finite or indefinite lives. As of December 31, 2019, all such intangible assets and liabilities acquired by the Company have finite lives. Intangible assets are included in "Deferred expenses and other assets, net" and intangible liabilities are included in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets. The Company amortizes finite lived intangible assets and liabilities based on the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the business acquired. The Company reviews finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the Company determines the carrying

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value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets are recorded in "Impairment of assets" in the Company's consolidated statements of operations.

Loan participations payable, net—The Company accounts for transfers of financial assets under ASC Topic 860, “Transfers and Servicing,” as either sales or secured borrowings. Transfers of financial assets that result in sales accounting are those in which (1) the transfer legally isolates the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee’s right to pledge or exchange the assets and provides more than a trivial benefit to the transferor, and (3) the transferor does not maintain effective control over the transferred assets. If the transfer does not meet these criteria, the transfer is presented on the balance sheet as "Loan participations payable, net." Financial asset activities that are accounted for as sales are removed from the balance sheet with any realized gain (loss) reflected in earnings during the period of sale.

Revenue recognition—The Company's revenue recognition policies are as follows:

Operating lease income: For the Company's leases classified as operating leases, operating lease income is recognized on the straight-line method of accounting, generally from the later of the date the lessee takes possession of the space and it is ready for its intended use or the date of acquisition of the facility subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease revenue recognized under this method and contractual lease payment terms is recorded as "Deferred operating lease income receivable, net" on the Company's consolidated balance sheets.

The Company also recognizes revenue from certain tenant leases for reimbursements of all or a portion of operating expenses, including common area costs, insurance, utilities and real estate taxes of the respective property. This revenue is accrued in the same periods as the expense is incurred and is recorded as “Operating lease income” in the Company's consolidated statements of operations. Revenue is also recorded from certain tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the defined threshold has been met for the period.

Management estimates losses within its operating lease income receivable and deferred operating lease income receivable balances as of the balance sheet date and incorporates a reserve based on management's evaluation of the credit risks associated with these receivables. As of December 31, 2019 and 2018, the allowance for doubtful accounts related to real estate tenant receivables was $1.0 million and $1.5 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.0 million and $1.8 million, respectively.

Interest Income: Interest income on loans receivable and financing receivables (refer to Note 5) is recognized on an accrual basis using the interest method.

On occasion, the Company may acquire loans at premiums or discounts. These discounts and premiums in addition to any deferred costs or fees, are typically amortized over the contractual term of the loan using the interest method. Exit fees are also recognized over the lives of the related loans as a yield adjustment, if management believes it is probable that such amounts will be received. If loans with premiums, discounts, loan origination or exit fees are prepaid, the Company immediately recognizes the unamortized portion, which is included in "Other income" or "Other expense" in the Company's consolidated statements of operations.

The Company considers a loan to be non-performing and places loans on non-accrual status at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. While on non-accrual status, based on the Company's judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash, or on a cost-recovery basis, where all cash receipts reduce a loan's carrying value. Non-accrual loans are returned to accrual status when a loan has become contractually current and management believes all amounts contractually owed will be received.

Certain of the Company's loans contractually provide for accrual of interest at specified rates that differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's determination that accrued interest and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the borrower.

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Certain of the Company's loan investments provide for additional interest based on the borrower's operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon receipt of cash.

Interest Income from Sales-Type Leases—Interest income from sales-type leases is recognized in "Interest income from sales-type leases" in the Company's consolidated statements of operations under the effective interest method. The effective interest method produces a constant yield on the net investment in the lease over the term of the lease. Rent payments that are not fixed and determinable at lease inception, such as percentage rent and CPI adjustments, are not included in the effective interest method calculation and are recognized in "Interest income from sales-type leases" in the Company's consolidated statements of operations in the period earned.

Other income: Other income includes revenues from hotel operations, which are recognized when rooms are occupied and the related services are provided. Revenues include room sales, food and beverage sales, parking, telephone, spa services and gift shop sales. Other income also includes gains from sales of loans, loan prepayment fees, yield maintenance payments, lease termination fees, management fees and other ancillary income. During the year ended December 31, 2017, the Company recorded $123.4 million of interest income and real estate tax reimbursements resulting from the settlement of litigation involving a dispute over the purchase and sale of land (refer to Note 6).

Land development revenue and cost of sales: Land development revenue includes lot and parcel sales from wholly-owned properties and is recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs.

Reserve for loan losses—The reserve for loan losses reflects management's estimate of loan losses inherent in the loan portfolio, including financing receivables (refer to Note 5), as of the balance sheet date. If the Company determines that the collateral fair value less costs to sell is less than the carrying value of a collateral-dependent loan, the Company will record a reserve. The reserve is increased (decreased) through "Provision for (recovery of) loan losses" in the Company's consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower as the Company works toward a settlement or other alternative resolution, which can impact the potential for loan repayment or receipt of collateral. The Company's policy is to charge off a loan when it determines, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when the Company receives cash or other assets in a pre-foreclosure sale or takes control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when the Company has otherwise ceased significant collection efforts. The Company considers circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related reserve will be charged off. The Company has one portfolio segment, represented by commercial real estate lending, whereby it utilizes a uniform process for determining its reserve for loan losses. The reserve for loan losses includes a general, formula-based component and an asset-specific component.

The general reserve component covers performing loans and reserves for loan losses are recorded when: (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio; and (ii) the amount of the loss can be reasonably estimated. The formula-based general reserve is derived from estimated principal default probabilities and loss severities applied to groups of loans based upon risk ratings assigned to loans with similar risk characteristics during the Company's quarterly loan portfolio assessment. During this assessment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss. The Company estimates loss rates based on historical realized losses experienced within its portfolio and takes into account current economic conditions affecting the commercial real estate market when establishing appropriate time frames to evaluate loss experience.

The asset-specific reserve component relates to reserves for losses on impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on a loan-by-loan basis each quarter

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based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices, or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

The Company's one impaired loan is collateral dependent and impairment is measured using the estimated fair value of the collateral, less costs to sell. The Company generally uses the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In some cases, the Company obtains external "as is" appraisals for loan collateral, generally when third party participations exist. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. In limited cases, appraised values may be discounted when real estate markets rapidly deteriorate.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when the Company has granted a concession and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan.

Reserve for losses on net investment in leases— The Company evaluates its net investment in leases for impairment under ASC 310. As part of its process for monitoring the credit quality of its net investment in leases, the Company performs a quarterly assessment for each of its net investment leases. The Company considers a net investment in lease to be impaired when, based upon current information and events, it believes that it is probable that it will be unable to collect all amounts due under the contractual terms of the lease. As of December 31, 2019, all of the Company's net investment in leases were performing in accordance with the terms of the respective leases.

Any potential reserve for losses on net investment in leases will reflect management's estimate of losses inherent in the portfolio as of the balance sheet date. If the Company determines that the cash flows it expects to receive from the underlying collateral over the lease term is less than the carrying value of the net investment in lease, it will record a reserve. The reserve, if applicable, will be increased (decreased) through "Reserve for losses on net investment in leases" in the Company's consolidated statements of operations.

Loss on debt extinguishments—The Company recognizes the difference between the reacquisition price of debt and the net carrying amount of extinguished debt currently in earnings. Such amounts may include prepayment penalties or the write-off of unamortized debt issuance costs, and are recorded in “Loss on early extinguishment of debt, net” in the Company's consolidated statements of operations.

Derivative instruments and hedging activity—The Company's use of derivative financial instruments, including derivative financial instruments at some of its equity method investments, is primarily limited to the utilization of interest rate swaps, interest rate caps or other instruments to manage interest rate risk exposure. The Company does not enter into derivatives for trading purposes.

The Company recognizes its derivatives as either assets or liabilities on the Company's consolidated balance sheets at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to changes in the fair value of a recognized asset or liability, a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability.

For derivatives designated and qualifying as cash flow hedges, changes in the fair value of the derivatives, including the Company's pro rata share of derivatives at equity method investments, are reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into interest expense or earnings from equity method investments in the same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt.

For the Company's derivatives not designated as hedges, the changes in the fair value of the derivatives are reported in "Other expense" in the Company's consolidated statements of operations.

Stock-based compensation—Compensation cost for stock-based awards is measured on the grant date and adjusted over the period of the employees' services to reflect: (i) actual forfeitures; and (ii) the outcome of awards with performance or service conditions through the requisite service period. Compensation cost for market-based awards is determined using a Monte Carlo model to simulate a range of possible future stock prices for the Company's common stock, which is reflected in the grant date

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fair value. All compensation cost for market-based awards in which the service conditions are met is recognized regardless of whether the market-condition is satisfied. Compensation costs are recognized ratably over the applicable vesting/service period and recorded in "General and administrative" in the Company's consolidated statements of operations.

Income taxes—The Company has elected to be qualified and taxed as a REIT under section 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). The Company is subject to federal income taxation at corporate rates on its REIT taxable income; the Company, however, is allowed a deduction for the amount of dividends paid to its shareholders, thereby subjecting the distributed net income of the Company to taxation at the shareholder level only. While the Company must distribute at least 90% of its taxable income to maintain its REIT status, the Company typically distributes all of its taxable income, if any, to eliminate any tax on undistributed taxable income. In addition, the Company is allowed several other deductions in computing its REIT taxable income, including non-cash items such as depreciation expense and certain specific reserve amounts that the Company deems to be uncollectable. These deductions allow the Company to reduce its dividend payout requirement under federal tax laws. The Company intends to operate in a manner consistent with, and its election to be treated as, a REIT for tax purposes. The Company made foreclosure elections for certain properties acquired through foreclosure, or an equivalent legal process, which allows the Company to operate these properties within the REIT and subjects net income, if any, from these assets to corporate level tax. The carrying value of assets with foreclosure elections as of December 31, 2019 is $39.6 million. Beginning in 2018, the Tax Cuts and Jobs Act reduced the corporate tax rate to 21% from 35% and net income from foreclosure property, if any, is subject to a 21% tax rate.

As of December 31, 2018, the Company had $567.7 million of REIT net operating loss ("NOL") carryforwards at the corporate REIT level that can generally be used to offset both ordinary taxable income and capital gain net income in future years. The NOL carryforwards will expire beginning in 2031 and through 2036 if unused. The amount of NOL carryforwards as of December 31, 2019 will be subject to finalization of the Company's 2019 tax return. The Tax Cuts and Jobs Act reduced the deduction for net operating losses to 80% of the Company’s taxable income for losses incurred after December 31, 2017. The Company's NOL carryforward for losses incurred in taxable years prior to 2018 remain fully deductible. The Company's tax years from 2015 through 2018 remain subject to examination by major tax jurisdictions. During the year ended December 31, 2019, the Company is expected to have REIT taxable income before the deduction for dividends paid and the NOL deduction. The Company recognizes interest expense and penalties related to uncertain tax positions, if any, as "Income tax (expense) benefit" in the Company's consolidated statements of operations.

The Company may participate in certain activities from which it would be otherwise precluded and maintain its qualification as a REIT. These activities are conducted in entities that elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries ("TRS"), is engaged in various real estate related opportunities, primarily related to managing activities related to certain foreclosed assets, as well as managing various investments in equity affiliates. As of December 31, 2019, $752.0 million of the Company's assets were owned by TRS entities. The Company's TRS entities are not consolidated with the REIT for federal income tax purposes and are taxed as corporations. For financial reporting purposes, current and deferred taxes are provided for on the portion of earnings recognized by the Company with respect to its interest in TRS entities.

The following represents the Company's TRS income tax benefit (expense) ($ in thousands):

	For the Years Ended December 31,
	2019				2018				2017
Current tax benefit (expense)(1)(2)	$	(35	)		$	(447	)		$	531
Total income tax (expense) benefit	$	(35	)		$	(447	)		$	531

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(1)

For the year ended December 31, 2017, the Company recognized a tax benefit for alternative minimum tax credits generated from a carryback of NOLs to 2014 and 2015. For the year ended December 31, 2019, excludes a REIT tax expense of $0.4 million, for the year ended December 31, 2018, excludes a REIT tax expense of $0.5 million and for the year ended December 31, 2017, excludes a REIT income tax benefit of $0.4 million.

(2)	Under the Tax Cuts and Jobs Act, the alternative minimum tax credit carryforward is a refundable tax credit over a four year period beginning in 2018 and ending in 2021 upon which the full amount of the credit will be allowed.

During the year ended December 31, 2019, the Company’s TRS entities generated a taxable loss of $31.6 million for which the Company recognized no current tax benefit. The Company’s TRS NOL will be carried forward and the Company’s TRS recorded a full valuation allowance against the related deferred tax asset. During the year ended December 31, 2018, the Company's TRS entities generated a taxable loss of $25.9 million for which the Company recognized no current tax benefit. The Company’s TRS NOL will be carried forward and the Company’s TRS recorded a full valuation allowance against the related deferred tax

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asset. During the year ended December 31, 2017, the Company's TRS entities generated a taxable loss of $33.1 million for which the Company recognized no current tax benefit.

Total cash paid for taxes for the years ended December 31, 2019, 2018 and 2017 was $0.4 million, $2.0 million and $6.0 million, respectively. The taxes paid in 2017 were primarily alternative minimum taxes at the REIT which the Company expects to be refunded over the next two years.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company applied the corporate tax rate enacted December 22, 2017 under the Tax Cuts and Jobs Act effective for years beginning after 2017 to value its deferred tax assets and liabilities. The Company evaluates whether its deferred tax assets are realizable and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating whether its deferred tax assets are realizable, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Based on an assessment of all factors, including historical losses and continued volatility of the activities within the TRS entities, it was determined that full valuation allowances were required on the net deferred tax assets as of December 31, 2019 and 2018, respectively. Changes in estimates of our valuation allowance, if any, are included in "Income tax (expense) benefit" in the consolidated statements of operations. The valuation allowance was reduced to reflect the change in value of our net deferred tax assets that reflects a reduced rate of tax under the Tax Cuts and Jobs Act.

Deferred tax assets and liabilities of the Company's TRS entities were as follows ($ in thousands):

		As of December 31,
		2019				2018
Deferred tax assets(1)(2)		$	79,645			$	78,107
Valuation allowance		(79,645		)		(78,107		)
Net deferred tax assets (liabilities)		$	—			$	—

_______________________________________________________________________________

(1)

Deferred tax assets as of December 31, 2019 include temporary differences related primarily to asset basis of $32.9 million, deferred expenses and other items of $11.9 million, NOL carryforwards of $32.5 million and other credits of $2.3 million. Deferred tax assets as of December 31, 2018 include temporary differences related primarily to asset basis of $35.3 million, deferred expenses and other items of $17.2 million and NOL carryforwards of $25.6 million. The Company has determined that the change in tax law associated with the Tax Cuts and Jobs Act will not have a material effect on whether its deferred tax assets are realizable.

(2)

Gross deferred tax assets as of December 31, 2017 were valued at the enacted corporate tax rate during the period in which such deferred tax assets are expected to be realized. The Tax Cuts and Jobs Act reduced the federal corporate tax rate to 21% from 35% for taxable years beginning after December 31, 2017. The Company’s TRS’s applied its reduced effective tax rate to compute its gross deferred tax assets before valuation allowance.

Earnings per share—The Company uses the two-class method in calculating earnings per share ("EPS") when it issues securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company when, and if, the Company declares dividends on its common stock. Basic earnings per share ("Basic EPS") for the Company's common stock are computed by dividing net income allocable to common shareholders by the weighted average number of shares of common stock outstanding for the period, respectively. Diluted earnings per share ("Diluted EPS") is calculated similarly, however, it reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

New accounting pronouncements—In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. On January 1, 2020, upon the adoption of ASU 2016-13, the Company expects to record an increase to its general reserve of approximately $12.0 million on its loan portfolio and its net investment in leases, which will be recorded as a decrease to shareholders' equity on January 1, 2020.

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In May 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments ("ASU 2019-04") to clarify certain accounting topics from previously issued ASUs, including ASU 2016-13. ASU 2019-04 addresses certain aspects of ASU 2016-13, including but not limited to, accrued interest receivable, loan recoveries, interest rate projections for variable-rate financial instruments and expected prepayments. ASU 2019-04 provides alternatives that allow entities to measure credit losses on accrued interest separate from credit losses on the principal portion of a loan, clarifies that entities should include expected recoveries in the measurement of credit losses, allows entities to consider future interest rates when measuring credit losses and can elect to adjust effective interest rates used to discount expected cash flows for expected loan prepayments. ASU 2019-04 is effective upon the adoption of ASU 2016-13. Management does not expect the adoption of ASU 2019-04 to have a material impact on the Company’s consolidated financial statements.

The Company's real estate assets were comprised of the following ($ in thousands):

	Net Lease(1)				Operating Properties				Total
As of December 31, 2019
Land, at cost	$	199,710			$	106,187			$	305,897
Buildings and improvements, at cost	1,347,321				107,861				1,455,182
Less: accumulated depreciation	(219,949		)		(13,911		)		(233,860		)
Real estate, net	1,327,082				200,137				1,527,219
Real estate available and held for sale (2)	—				8,650				8,650
Total real estate	$	1,327,082			$	208,787			$	1,535,869
As of December 31, 2018
Land, at cost	$	336,740			$	133,599			$	470,339
Buildings and improvements, at cost	1,487,270				118,724				1,605,994
Less: accumulated depreciation	(287,516		)		(17,798		)		(305,314		)
Real estate, net	1,536,494				234,525				1,771,019
Real estate available and held for sale (2)	1,055				21,496				22,551
Total real estate	$	1,537,549			$	256,021			$	1,793,570

_______________________________________________________________________________

(1)	In May 2019, the Company modified certain of its leases. As a result of these modifications, the Company classified the leases as sales-type leases and recorded $424.1 million in "Net investment in leases" and derecognized $193.4 million from "Real estate, net" and "Real estate available and held for sale" on its consolidated balance sheet (refer to Note 5).

(2)	As of December 31, 2019 and 2018, the Company had $8.6 million and $20.6 million, respectively, of residential condominiums available for sale in its operating properties portfolio.

Real Estate Available and Held for Sale—The following table presents the carrying value of properties transferred to held for sale, by segment ($ in millions)⁽¹⁾:

		Year Ended December 31,
Property Type		2019				2018				2017
Operating Properties		$	14.5			$	23.2			$	20.1
Net Lease		185.9				8.1				0.9
Total		$	200.4			$	31.3			$	21.0

_______________________________________________________________________________

(1)	Properties were transferred to held for sale due to executed contracts with third parties or changes in business strategy. All of these properties were ultimately sold.

Acquisitions—During the year ended December 31, 2019, the Company acquired a net lease asset for $11.5 million. In addition, the Company acquired the leasehold interest in an office property for $98.2 million, inclusive of closing costs, and simultaneously entered into a new 98-year ground lease with SAFE (refer to Note 8) and also acquired the leasehold interest in a net lease asset for $110.6 million and simultaneously entered into a new 99-year Ground Lease with SAFE (refer to Note 8). During the year ended December 31, 2018, the Company acquired two net lease assets for an aggregate $14.8 million.

Disposition of Ground Lease Business—In April 2017, institutional investors acquired a controlling interest in the Company's ground lease business through the merger of a Company subsidiary and related transactions (the "Acquisition Transactions"). Ground leases generally represent ownership of the land underlying commercial real estate projects that is triple net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon ("Ground Lease"). The Company's Ground Lease business was a component of the Company's net lease segment and consisted of 12 properties subject to long term net leases including seven Ground Leases and one master lease (covering five properties). The acquiring entity was a newly formed unconsolidated entity named Safety, Income & Growth Inc., which was subsequently renamed Safehold Inc. ("SAFE"). The carrying value of the Company's Ground Lease assets was approximately $161.1 million. Shortly before the

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Acquisition Transactions, the Company completed a $227.0 million financing on its Ground Lease assets. The Company received all of the proceeds of the financing. The Company received an additional $113.0 million of proceeds in the Acquisition Transactions, including $55.5 million that the Company contributed to SAFE in its initial capitalization. As a result of the Acquisition Transactions, the Company deconsolidated the 12 properties and the associated financing. The Company accounts for its investment in SAFE as an equity method investment (refer to Note 8). The Company accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of the Company's retained interest in SAFE. The gain was recorded in "Gain from discontinued operations" in the Company's consolidated statements of operations. As a result of the adoption of ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, on January 1, 2018, the Company recorded an increase to retained earnings of $55.5 million, bringing the Company's aggregate gain on the sale of its Ground Lease business to approximately $178.9 million.

Discontinued Operations—The transactions described above involving the Company's Ground Lease business qualified for discontinued operations and the following table summarizes income from discontinued operations for the year ended December 31, 2017 ($ in thousands)⁽¹⁾:

Revenues		$	5,922
Expenses		(1,491		)
Income from sales of real estate		508
Income from discontinued operations		$	4,939

_______________________________________________________________________________

(1)	The transactions closed on April 14, 2017. Revenues primarily consisted of operating lease income and expenses primarily consisted of depreciation and amortization and real estate expense.

The following table presents cash flows provided by operating activities and cash flows used in investing activities from discontinued operations for the year ended December 31, 2017 ($ in thousands).

Cash flows provided by operating activities		$	5,702
Cash flows used in investing activities		(534		)

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Other Dispositions—The following table presents the proceeds and income recognized for properties sold, by property type ($ in millions):

		Years Ended December 31,
		2019				2018				2017
Operating Properties(1)
Proceeds		$	86.1			$	327.9			$	41.3
Income from sales of real estate		11.9				81.0				4.5
Net Lease(2)
Proceeds		$	469.4			$	79.7			$	175.4
Income from sales of real estate		224.7				45.0				87.5
Total
Proceeds		$	555.5			$	407.6			$	216.7
Income from sales of real estate		236.6				126.0				92.0

_______________________________________________________________________________

(1)

During the year ended December 31, 2019, the Company sold commercial and residential operating properties with an aggregate carrying value of $73.1 million and recognized $11.9 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations. During the year ended December 31, 2018, the Company sold 10 commercial operating properties and residential condominium units from other properties and recognized $81.0 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations, of which $9.8 million was attributable to a noncontrolling interest at one of the properties.

(2)

During the year ended December 31, 2019, the Company sold a portfolio of net lease assets with an aggregate carrying value of $220.4 million and recognized $219.7 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations. In connection with the sale of this portfolio of assets the buyer assumed a $228.0 million non-recourse mortgage. During the year ended December 31, 2018, the Company sold five net lease assets and recognized $45.0 million of gains in "Income from sales of real estate" in the Company's consolidated statements of operations. During the year ended December 31, 2017, the Company sold one net lease property and recognized a gain on sale of $62.5 million. Prior to the sale, the Company acquired the noncontrolling interest with a carrying value of $3.5 million for $12.0 million.

Impairments—During the years ended December 31, 2019, 2018 and 2017, the Company recorded aggregate impairments on real estate assets totaling $5.4 million, $90.4 million and $11.9 million, respectively. During the year ended December 31, 2019, the Company recorded an aggregate impairment of $5.4 million in connection with the sale of net lease and operating properties and residential condominium units. The impairments recorded in 2018 were primarily from the Company's decision to accelerate the monetization of certain legacy assets, including several larger assets. The impairments recorded in 2017 were primarily the result of shifting demand in the local condominium markets, changes in the Company's exit strategy on other real estate assets and an impairment recorded in connection with the sale of an outparcel located at a commercial operating property.

Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements were $21.2 million, $22.4 million and $21.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.

Allowance for Doubtful Accounts—As of December 31, 2019 and 2018, the allowance for doubtful accounts related to real estate tenant receivables was $1.0 million and $1.5 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.0 million and $1.8 million, respectively. These amounts are included in "Accrued interest and operating lease income receivable, net" and "Deferred operating lease income receivable, net," respectively, on the Company's consolidated balance sheets.

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Future Minimum Operating Lease Payments—Future minimum operating lease payments to be collected under non-cancelable leases, excluding customer reimbursements of expenses, in effect as of December 31, 2019, are as follows ($ in thousands):

Year		Net Lease Assets				Operating Properties
2020		$	141,993			$	16,625
2021		141,763				16,293
2022		140,165				8,112
2023		131,998				7,822
2024		126,453				7,801

In May 2019, the Company entered into a transaction with an operator of bowling entertainment venues, consisting of the purchase of nine bowling centers for $56.7 million, of which seven were acquired from the lessee for $44.1 million, and a commitment to invest up to $55.0 million in additional bowling centers over the next several years. The new centers were added to the Company's existing master leases with the tenant. In connection with this transaction, the maturities of the master leases were extended by 15 years to 2047.

As a result of the modifications to the leases, the Company classified the leases as sales-type leases and recorded $424.1 million in "Net investment in leases" and derecognized $193.4 million from "Real estate, net" and "Real estate available and held for sale," $25.4 million from "Deferred operating lease income receivable, net," $13.4 million from "Deferred expenses and other assets, net" and $1.9 million from "Accounts payable, accrued expenses and other liabilities" on its consolidated balance sheet. The Company recognized $180.4 million in "Selling profit from sales-type leases" in its consolidated statements of operations for the year ended December 31, 2019 as a result of the transaction. The Company determined that the seven bowling centers acquired from the lessee did not qualify as a sale leaseback transaction and, as a result, recorded a $44.1 million financing receivable in "Loans receivable and other lending investments, net" on its consolidated balance sheet (refer to Note 7). For the year ended December 31, 2019, the Company recognized $20.5 million of "Interest income from sales-type leases" in the Company's consolidated statements of operations.

Future Minimum Lease Payments under Sales-type Leases—Future minimum lease payments to be collected under sales-type leases, excluding lease payments that are not fixed and determinable, in effect as of December 31, 2019, are as follows by year ($ in thousands):

		Amount
2020		$	27,565
2021		28,062
2022		30,549
2023		30,549
2024		30,549
Thereafter		894,745
Total undiscounted cash flows		1,042,019
Unguaranteed estimated residual value		340,620
Present value discount		(963,724		)
Net investment in leases as of December 31, 2019		$	418,915

Impairments—During the year ended December 31, 2019, the Company recorded an impairment of $0.9 million in connection with the sale of a net lease property.

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The Company's land and development assets were comprised of the following ($ in thousands):

	As of December 31,
	2019				2018
Land and land development, at cost	$	590,153			$	606,849
Less: accumulated depreciation	(9,608		)		(8,631		)
Total land and development, net	$	580,545			$	598,218

Acquisitions—During the year ended December 31, 2019, the Company acquired a land and development asset from an unconsolidated entity in which the Company owned a noncontrolling 50% equity interest for $34.3 million, which consisted of a $7.3 million cash payment and the assumption of a $27.0 million loan (refer to Note 8).

During the year ended December 31, 2018, the Company acquired, via foreclosure, title to a land asset which had a total fair value of $4.6 million and had previously served as collateral for loans receivable held by the Company. No gain or loss was recorded in connection with this transaction.

Dispositions—During the years ended December 31, 2019, 2018 and 2017, the Company sold land parcels and residential lots and units and recognized land development revenue of $119.6 million, $409.7 million and $196.9 million, respectively. In connection with the sale of two land parcels totaling 93 acres during the year ended December 31, 2018, the Company provided an aggregate $145.0 million of financing to the buyers, of which $94.2 million was outstanding as of December 31, 2019. During the years ended December 31, 2019, 2018 and 2017, the Company recognized land development cost of sales of $109.7 million, $350.2 million and $180.9 million, respectively, from its land and development portfolio.

In connection with the resolution of litigation involving a dispute over the purchase and sale of approximately 1,250 acres of land in Prince George’s County, Maryland, during the year ended December 31, 2017, the Company recognized $114.0 million of land development revenue and $106.3 million of land development cost of sales.

Impairments—During the year ended December 31, 2019, the Company recorded an aggregate impairment of $5.3 million on two land and development assets based on expected sales proceeds and an impairment of $1.1 million on a land and development asset due to a change in business strategy. During the year ended December 31, 2018, the Company recorded an aggregate impairment of $56.7 million on five land and development assets, primarily from the Company's decision to accelerate the monetization of legacy assets, including several larger assets. During the year ended December 31, 2017, the Company recorded impairments on land and development assets of $20.5 million resulting from a decrease in expected cash flows on one asset and a change in exit strategy on another asset.

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The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):

	As of December 31,
Type of Investment	2019				2018
Senior mortgages	$	572,584			$	760,749
Corporate/Partnership loans	119,818				148,583
Subordinate mortgages	10,877				10,161
Total gross carrying value of loans	703,279				919,493
Reserves for loan losses	(28,634		)		(53,395		)
Total loans receivable, net	674,645				866,098
Other lending investments(1)	153,216				122,126
Total loans receivable and other lending investments, net	$	827,861			$	988,224

_______________________________________________________________________________

(1)	As of December 31, 2019, includes a $44.3 million financing receivable related to the acquisition of bowling centers from one of the Company's lessees (refer to Note 5).

Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):

	For the Years Ended December 31,
	2019				2018				2017
Reserve for loan losses at beginning of period	$	53,395			$	78,489			$	85,545
Provision for (recovery of) loan losses	6,482				16,937				(5,828		)
Charge-offs	(31,243		)		(42,031		)		(1,228		)
Reserve for loan losses at end of period	$	28,634			$	53,395			$	78,489

_______________________________________________________________________________

(1)	During the year ended December 31, 2019, the Company charged-off $19.2 million from the specific reserve due to the resolution of a non-performing loan and $12.0 million due to the deterioration of the collateral on a separate non-performing loan.

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The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):

	Individually Evaluated for Impairment(1)				Collectively Evaluated for Impairment(2)				Total
As of December 31, 2019
Loans	$	37,820			$	668,769			$	706,589
Less: Reserve for loan losses	(21,701		)		(6,933		)		(28,634		)
Total(3)	$	16,119			$	661,836			$	677,955
As of December 31, 2018
Loans	$	66,725			$	857,662			$	924,387
Less: Reserve for loan losses	(40,395		)		(13,000		)		(53,395		)
Total(3)	$	26,330			$	844,662			$	870,992

_______________________________________________________________________________

(1)

The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.1 million and $0.5 million as of December 31, 2019 and 2018, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status; therefore, the unamortized amounts associated with these loans are not currently being amortized into income.

(2)	The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.7 million and $3.1 million as of December 31, 2019 and 2018, respectively.

(3)

The Company's recorded investment in loans as of December 31, 2019 and 2018 includes accrued interest of $3.3 million and $4.9 million, respectively, which is included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of December 31, 2019, excludes a $44.3 million financing receivable (refer to Note 5). As of December 31, 2019 and 2018, the total amounts exclude $108.9 million and $122.1 million, respectively, of securities that are evaluated for impairment under ASC 320.

Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain and there can be no assurance that actual performance will be similar to current expectation.

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The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):

	As of December 31,
	2019							2018
	Performing Loans				Weighted Average Risk Ratings			Performing Loans				Weighted Average Risk Ratings
Senior mortgages	$	537,201			2.71			$	697,807			2.76
Corporate/Partnership loans	120,658				2.83			149,663				2.84
Subordinate mortgages	10,910				3.00			10,192				3.00
Total	$	668,769			2.73			$	857,662			2.77

The Company's recorded investment in loans, aged by payment status and presented by class, was as follows ($ in thousands):

As of December 31, 2019	Current				Less Than and Equal to 90 Days				Greater Than 90 Days(1)				Total Past Due				Total
Senior mortgages	$	537,201			$	—			$	37,820			$	37,820			$	575,021
Corporate/Partnership loans	120,658				—				—				—				120,658
Subordinate mortgages	10,910				—				—				—				10,910
Total	$	668,769			$	—			$	37,820			$	37,820			$	706,589
As of December 31, 2018
Senior mortgages	$	703,807			$	—			$	60,725			$	60,725			$	764,532
Corporate/Partnership loans	149,663				—				—				—				149,663
Subordinate mortgages	10,192				—				—				—				10,192
Total	$	863,662			$	—			$	60,725			$	60,725			$	924,387

_______________________________________________________________________________

(1)

As of December 31, 2019, the Company had one loan which was greater than 90 days delinquent and was in various stages of resolution, including legal and environmental matters, and was 10.5 years outstanding. As of December 31, 2018, the Company had two loans which were greater than 90 days delinquent and were in various stages of resolution, including legal and foreclosure-related proceedings and environmental matters, and ranged from 4.0 to 9.0 years outstanding.

Impaired Loans—In the second quarter 2018, the Company resolved a non-performing loan with a carrying value of $145.8 million. The Company received a $45.8 million cash payment and a preferred equity investment with a face value of $100.0 million that is mandatorily redeemable in five years. The Company recorded the preferred equity at its fair value of $77.0 million and are accruing interest over the expected duration of the investment. In addition, the Company recorded a $21.4 million loan loss provision and simultaneously charged-off of the remaining unpaid balance.

The Company's recorded investment in impaired loans, presented by class, was as follows ($ in thousands)⁽¹⁾:

	As of December 31, 2019												As of December 31, 2018
	Recorded Investment				Unpaid Principal Balance				Related Allowance				Recorded Investment				Unpaid Principal Balance				Related Allowance
With an allowance recorded:
Senior mortgages	$	37,820			$	37,923			$	(21,701	)		$	66,725			$	66,777			$	(40,395	)
Total	$	37,820			$	37,923			$	(21,701	)		$	66,725			$	66,777			$	(40,395	)

_______________________________________________________________________________

(1)	All of the Company's non-accrual loans are considered impaired and included in the table above.

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The Company's average recorded investment in impaired loans and interest income recognized, presented by class, was as follows ($ in thousands):

	For the Years Ended December 31,
	2019								2018								2017
	Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized
With no related allowance recorded:
Subordinate mortgages	$	—			$	—			$	—			$	301			$	6,582			$	1,127
Subtotal	—				—				—				301				6,582				1,127
With an allowance recorded:
Senior mortgages	38,556				—				67,041				—				82,749				—
Corporate/Partnership loans	—				—				39,169				—				156,756				—
Subtotal	38,556				—				106,210				—				239,505				—
Total:
Senior mortgages	38,556				—				67,041				—				82,749				—
Corporate/Partnership loans	—				—				39,169				—				156,756				—
Subordinate mortgages	—				—				—				301				6,582				1,127
Total	$	38,556			$	—			$	106,210			$	301			$	246,087			$	1,127

There was no interest income related to the resolution of non-performing loans recorded during the years ended December 31, 2019, 2018 and 2017.

Other lending investments—Other lending investments includes the following securities ($ in thousands):

	Face Value				Amortized Cost Basis				Net Unrealized Gain				Estimated Fair Value				Net Carrying Value
As of December 31, 2019
Available-for-Sale Securities
Municipal debt securities	$	21,140			$	21,140			$	2,756			$	23,896			$	23,896
Held-to-Maturity Securities
Debt securities	100,000				84,981				—				84,981				84,981
Total	$	121,140			$	106,121			$	2,756			$	108,877			$	108,877
As of December 31, 2018
Available-for-Sale Securities
Municipal debt securities	$	21,185			$	21,185			$	476			$	21,661			$	21,661
Held-to-Maturity Securities
Debt securities	120,866				100,465				7				100,472				100,465
Total	$	142,051			$	121,650			$	483			$	122,133			$	122,126

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As of December 31, 2019, the contractual maturities of the Company's securities were as follows ($ in thousands):

	Held-to-Maturity Securities								Available-for-Sale Securities
	Amortized Cost Basis				Estimated Fair Value				Amortized Cost Basis				Estimated Fair Value
Maturities
Within one year	$	—			$	—			$	—			$	—
After one year through 5 years	84,981				84,981				—				—
After 5 years through 10 years	—				—				—				—
After 10 years	—				—				21,140				23,896
Total	$	84,981			$	84,981			$	21,140			$	23,896

The Company's other investments and its proportionate share of earnings (losses) from equity method investments were as follows ($ in thousands):

	Carrying Value								Equity in Earnings (Losses)
	As of December 31,								For the Years Ended December 31,
	2019				2018				2019				2018				2017
Real estate equity investments
Safehold Inc. ("SAFE")(1)	$	729,357			$	149,589			$	29,764			$	4,711			$	551
iStar Net Lease II LLC ("Net Lease Venture II")	30,712				16,215				(529		)		(333		)		—
iStar Net Lease I LLC ("Net Lease Venture")(2)	—				—				—				4,100				4,534
Other real estate equity investments(3)	104,553				130,955				12,620				(4,112		)		6,520
Subtotal	864,622				296,759				41,855				4,366				11,605
Other strategic investments(4)	43,253				7,516				(6		)		(9,373		)		1,410
Total	$	907,875			$	304,275			$	41,849			$	(5,007	)		$	13,015

_______________________________________________________________________________

(1)	As of December 31, 2019, the Company owned 31.2 million shares of SAFE common stock which, based on the closing price of $40.30 on December 31, 2019, had a market value of $1.3 billion. For the year ended December 31, 2019, equity in earnings includes a dilution gain of $7.6 million resulting from SAFE equity offerings during 2019.

(2)	The Company consolidated the assets and liabilities of the Net Lease Venture on June 30, 2018 (refer to Net Lease Venture below).

(3)	During the year ended December 31, 2019, equity in earnings (losses) includes $19.3 million of income resulting primarily from the sale of properties at two of the Company's equity method investments. During the year ended December 31, 2018, the Company recorded a $6.1 million impairment on a land and development equity method investment due to a change in business strategy.

(4)	For the year ended December 31, 2018, equity in earnings (losses) includes a $10.0 million impairment on a foreign equity method investment due to local market conditions.

Safehold Inc.—SAFE is a publicly-traded company formed by the Company primarily to acquire, own, manage, finance and capitalize ground leases. Ground leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon ("Ground Leases").

On January 2, 2019, the Company purchased 12.5 million newly designated limited partnership units (the "Investor Units") in SAFE's operating partnership ("SAFE OP"), at a purchase price of $20.00 per unit, for a total purchase price of $250.0 million. The purpose of the investment was to allow SAFE to fund additional Ground Lease acquisitions and originations. Each Investor Unit received distributions equivalent to distributions declared and paid on one share of SAFE's common stock. The Investor Units had no voting rights. They had limited protective consent rights over certain matters such as amendments to the terms of the Investor Units that would adversely affect the Investor Units. In May 2019, after the approval of SAFE's stockholders, the Investor Units were exchanged for shares of SAFE's common stock on a one-for-one basis. Following the exchange, the Investor Units were retired.

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In connection with the Company's purchase of the Investor Units, it entered into a Stockholder's Agreement with SAFE on January 2, 2019. The Stockholder's Agreement:

•	limits the Company's discretionary voting power to 41.9% of the outstanding voting power of SAFE's common stock until its aggregate ownership of SAFE common stock is less than 41.9%;

•	requires the Company to cast all of its voting power in favor of three director nominees to SAFE's board who are independent of each of the Company and SAFE for three years;

•	subjects the Company to certain standstill provisions for two years;

•	restricts the Company's ability to transfer shares of SAFE common stock issued in exchange for Investor Units, or "Exchange Shares," for one year after their issuance;

•	prohibits the Company from transferring shares of SAFE common stock representing more than 20% of the outstanding SAFE common stock in one transaction or a series of related transactions to any person or group, other than pursuant to a widely distributed public offering, unless SAFE's other stockholders have participation rights in the transaction; and

•	provides the Company certain preemptive rights.

A wholly-owned subsidiary of the Company is the external manager of SAFE and is entitled to a management fee. In addition, the Company is also the external manager of a venture in which SAFE is a member. Following are the key terms of the management agreement with SAFE:

•	The Company received no management fee through June 30, 2018, which covered the first year of the management agreement;

•	The Company receives a fee equal to 1.0% of total SAFE equity (as defined in the management agreement) up to $1.5 billion; 1.25% of total SAFE equity (for incremental equity of $1.5 billion - $3.0 billion); 1.375% of total SAFE equity (for incremental equity of $3.0 billion - $5.0 billion); and 1.5% of total SAFE equity (for incremental equity over $5.0 billion);

•	Fee to be paid in cash or in shares of SAFE common stock, at the discretion of SAFE's independent directors;

•	The stock is locked up for two years, subject to certain restrictions;

•	There is no additional performance or incentive fee;

•	The management agreement is non-terminable by SAFE through June 30, 2023 except for cause; and

•	Automatic annual renewals thereafter, subject to non-renewal upon certain findings by SAFE's independent directors and payment of termination fee equal to three times the prior year's management fee.

In August 2019, the Company acquired 6.0 million shares of SAFE's common stock in a private placement for $168.0 million. In November 2019, the Company acquired 3.8 million shares of SAFE's common stock in a private placement for $130.0 million. As of December 31, 2019, the Company owned approximately 65.2% of SAFE's common stock outstanding.

During the year ended December 31, 2019, the Company recorded $7.5 million of management fees and during the six months ended December 31, 2018, the Company recorded $1.8 million of management fees pursuant to its management agreement with SAFE. During the six months ended June 30, 2018, the Company waived $1.8 million of management fees and during the year ended December 31, 2017, the Company waived $2.0 million management fees pursuant to its management agreement with SAFE.

The Company is also entitled to receive certain expense reimbursements, including for the allocable costs of its personnel that perform certain legal, accounting, due diligence tasks and other services that third-party professionals or outside consultants otherwise would perform. The Company has waived or elected not to charge in full certain of the expense reimbursements while SAFE is growing its portfolio. For the year ended December 31, 2019, the Company was reimbursed $2.1 million of expense reimbursements and for the six months ended December 31, 2018, the Company was reimbursed $0.7 million of expense reimbursements. Pursuant to the terms of the management agreement with SAFE, the Company waived all expense reimbursements for the first year after the closing of SAFE's initial public offering, through June 30, 2018. The Company has an exclusivity agreement with SAFE pursuant to which it agreed, subject to certain exceptions, that it will not acquire, originate, invest in, or provide financing for a third party’s acquisition of, a Ground Lease unless it has first offered that opportunity to SAFE and a majority of its independent directors has declined the opportunity.

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Following is a list of investments that the Company has transacted with SAFE, all of which were approved by the Company's and SAFE's independent directors, for the periods presented:

In August 2017, the Company committed to provide a $24.0 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan was for the renovation of a medical office building in Atlanta, GA. The Company funded $18.4 million of the loan, which was fully repaid in August 2019. During the years ended December 31, 2019, 2018 and 2017, the Company recorded $1.2 million, $1.4 million and $0.2 million, respectively, of interest income on the loan.

In October 2017, the Company closed on a 99-year Ground Lease and a $80.5 million construction financing commitment to support the ground-up development of a to-be-built luxury multi-family project in San Jose, CA. The transaction includes a combination of: (i) a newly created Ground Lease and a $7.2 million leasehold improvement allowance, which was fully funded as of December 31, 2019; and (ii) a $80.5 million leasehold first mortgage.  As of December 31, 2019, $38.9 million of the leasehold first mortgage was funded. During the years ended December 31, 2019 and 2018, the Company recorded $1.2 million and $0.2 million, respectively, of interest income on the loan. The Company entered into a forward purchase contract with SAFE under which SAFE would acquire the Ground Lease in November 2020 for approximately $34.0 million.

In May 2018, the Company provided a $19.9 million leasehold mortgage loan to the ground lessee of a Ground Lease originated at SAFE. The loan was for the acquisition of two multi-tenant office buildings in Atlanta, GA. The loan was repaid in full in November 2019 and during the years ended December 31, 2019 and 2018, the Company recorded $1.9 million and $1.4 million, respectively, of interest income on the loan.

In June 2018, the Company sold two industrial facilities located in Miami, FL to a third-party and simultaneously structured and entered into two Ground Leases. The Company then sold the two Ground Leases to SAFE. Net proceeds from the transactions totaled $36.1 million and the Company recognized a $24.5 million gain on sale.

In January 2019, the Company committed to provide a $13.3 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan is for the conversion of an office building into a multi-family property in Washington, DC. As of December 31, 2019, $12.6 million of the loan was funded. During the year ended December 31, 2019, the Company recorded $1.0 million of interest income on the loan.

In February 2019, the Company acquired the leasehold interest in an office property and simultaneously entered into a new 98-year Ground Lease with SAFE (refer to Note 4). 

In August 2019, the Company acquired the leasehold interest in a net lease asset and simultaneously entered into a new 99-year Ground Lease with SAFE (refer to Note 4). 

In October 2019, SAFE acquired land and SAFE's Ground Lease tenant acquired the leasehold from a venture in which the Company has a 50% ownership interest. In addition, the Company provided a $22.0 million loan to SAFE's Ground Lease tenant for the acquisition of the leasehold. The Company sold the loan at par to a third-party in November 2019.

Net Lease Venture—In February 2014, the Company partnered with a sovereign wealth fund to form the Net Lease Venture to acquire and develop net lease assets and gave a right of first offer to the venture on all new net lease investments. The Company and its partner had joint decision making rights pertaining to the acquisition of new investments. Upon the expiration of the investment period on June 30, 2018, the Company obtained control of the venture through its unilateral rights of management and disposition of the assets. As a result, the expiration of the investment period resulted in a reconsideration event under GAAP and the Company determined that the Net Lease Venture is a VIE for which the Company is the primary beneficiary. Effective June 30, 2018, the Company consolidated the Net Lease Venture as an asset acquisition under ASC 810. The Company recorded a gain of $67.9 million in "Gain on consolidation of equity method investment" in the Company's consolidated statement of operations as a result of the consolidation. The Net Lease Venture had previously been accounted for as an equity method investment. The Company has an equity interest in the Net Lease Venture of approximately 51.9% and recorded a $188.3 million increase to "Noncontrolling interests" and $11.8 million increase to "Redeemable noncontrolling interest" on the Company's consolidated balance sheet as a result of the consolidation. The Company acquired the redeemable noncontrolling interest in the fourth quarter 2018. The Company is responsible for sourcing new opportunities and managing the venture and its assets in exchange for a management fee and incentive fee. Several of the Company's senior executives whose time is substantially devoted to the Net Lease Venture own a total of 0.6% equity ownership in the venture via co-investment. These senior executives are also entitled to an amount equal to 50% of any incentive fee received based on the 47.5% partner's interest.

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During the years ended December 31, 2018 and 2017, the Company recorded $1.3 million and $2.1 million, respectively, of management fees from the Net Lease Venture. The management fees are included in "Other income" in the Company's consolidated statements of operations. In addition, beginning after the Company's consolidation of the Net Lease Venture on June 30, 2018 and after the effect of eliminations, during the year ended December 31, 2019 and the six months ended December 31, 2018, the Company earned $1.5 million and $0.7 million, respectively, of management fees with respect to services provided to other investors in the Net Lease Venture, which was recorded as a reduction to "Net income attributable to noncontrolling interests" in the Company's consolidated statements of operations.

Net Lease Venture II—In July 2018, the Company entered into a new venture ("Net Lease Venture II") with an investment strategy similar to the Net Lease Venture. The Net Lease Venture II has a right of first offer on all new net lease investments (excluding Ground Leases) originated by the Company. Net Lease Venture II's investment period ends in June 2021. Net Lease Venture II is a voting interest entity and the Company has an equity interest in the venture of approximately 51.9%. The Company does not have a controlling interest in Net Lease Venture II due to the substantive participating rights of its partner. The Company accounts for its investment in Net Lease Venture II as an equity method investment and is responsible for managing the venture in exchange for a management fee and incentive fee. During the years ended December 31, 2019 and 2018, the Company recorded $1.5 million and $0.4 million, respectively, of management fees from Net Lease Venture II.

In December 2019, Net Lease Venture II closed on a commitment to provide up to $150.0 million in net lease financing for the construction of three industrial centers and entered into a 25 year master lease with the tenant. As of December 31, 2019, Net Lease Venture II had funded $18.7 million of its commitment.

In December 2019, Net Lease Venture II closed on the acquisition of two grocery distribution centers for $81.8 million, inclusive of assumed debt. The properties are 100% leased with two separate coterminous leveraged leases with 6.2 years remaining on the lease terms.

In December 2018, Net Lease Venture II acquired four buildings comprising 168,636 square feet (the "Properties") located in Livermore, CA. Net Lease Venture II acquired the Properties for $31.2 million which are 100% leased with four separate leases that expire in December 2028.

Other real estate equity investments—As of December 31, 2019, the Company's other real estate equity investments include equity interests in real estate ventures ranging from 16% to 95%, comprised of investments of $61.7 million in operating properties and $42.9 million in land assets. As of December 31, 2018, the Company's other real estate equity investments included $65.6 million in operating properties and $65.3 million in land assets. In December 2019, the Company sold a partial interest in one of its other real estate equity investments to a related party for $0.5 million and recorded no gain or loss on the transaction.      

In August 2018, the Company provided a mezzanine loan with a principal balance of $33.0 million and $30.5 million as of December 31, 2019 and 2018, respectively, to an unconsolidated entity in which the Company owns a 50% equity interest. The loan is included in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheet. During the years ended December 31, 2019 and 2018, the Company recorded $2.8 million and $1.1 million, respectively, of interest income on the mezzanine loan.

In December 2016, the Company sold a land and development asset to a newly formed unconsolidated entity in which the Company owned a 50.0% equity interest. The Company provided financing to the entity in the form of a $27.0 million senior loan, all of which was funded as of December 31, 2018 and was included in "Loans receivable and other lending investments, net" on the Company's consolidated balance sheet. In April 2019, the Company acquired the land and development asset from the entity for $34.3 million, which consisted of a $7.3 million cash payment and the assumption of the $27.0 million senior loan. During the years ended December 31, 2019, 2018 and 2017, the Company recorded $0.6 million, $2.1 million and $1.9 million, respectively, of interest income on the senior loan.

Other strategic investments—As of December 31, 2019 and 2018, the Company also had investments in real estate related funds and other strategic investments in real estate entities.

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Summarized investee financial information—The following table presents the investee level summarized financial information of the Company's equity method investments ($ in thousands):

		As of December 31,									For the Years Ended December 31,
		2019				2018					2019				2018				2017
Balance Sheets										Income Statements
Total assets		$	3,653,763			$	2,118,045			Revenues	$	214,123			$	262,970			$	261,867
Total liabilities		1,918,034				1,016,502				Expenses	(181,456		)		(187,257		)		(167,999		)
Noncontrolling interests		1,486				2,007				Net income attributable to parent entities	32,474				75,056				91,633
Total equity attributable to parent entities		1,734,243				1,099,536

Deferred expenses and other assets, net, consist of the following items ($ in thousands):

	As of December 31,
	2019				2018
Intangible assets, net(1)	$	174,973			$	156,281
Finance lease right-of-use assets(2)	145,209				—
Operating lease right-of-use assets(2)	34,063				—
Other receivables(3)	16,846				46,887
Restricted cash	45,034				42,793
Other assets(4)	17,534				32,333
Leasing costs, net(5)	3,793				6,224
Corporate furniture, fixtures and equipment, net(6)	2,736				3,850
Deferred financing fees, net	2,300				900
Deferred expenses and other assets, net	$	442,488			$	289,268

_______________________________________________________________________________

(1)

Intangible assets, net includes above market and in-place lease assets and lease incentives related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was $33.4 million and $27.0 million as of December 31, 2019 and 2018, respectively. The amortization of above market leases and lease incentive assets decreased operating lease income in the Company's consolidated statements of operations by $1.7 million, $2.2 million and $2.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. These intangible lease assets are amortized over the term of the lease. The amortization expense for in-place leases was $9.6 million, $7.2 million and $1.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts are included in "Depreciation and amortization" in the Company's consolidated statements of operations. As of December 31, 2019, the weighted average amortization period for the Company's intangible assets was approximately 20.7 years.

(2)

Right-of-use lease assets relate primarily to the Company's leases of office space and certain of its ground leases. Right-of use lease assets initially equal the lease liability. The lease liability (see table below) equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company's incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at the Company's weighted average incremental secured borrowing rate for similar collateral estimated to be 5.3% and the weighted average lease term is 7.8 years. For finance leases, lease liabilities were discounted at a weighted average rate implicit in the lease of 5.5% and the weighted average lease term is 98.0 years. Right-of-use assets for finance leases are amortized on a straight-line basis over the term of the lease and are recorded in "Depreciation and amortization" in the Company's consolidated statements of operations. During the year ended December 31, 2019, the Company recognized $5.1 million in "Interest expense" and $0.9 million in "Depreciation and amortization" in its consolidated statement of operations relating to finance leases. For operating leases, rent expense is recognized on a straight-line basis over the term of the lease and is recorded in "General and administrative" and "Real estate expense" in the Company's consolidated statements of operations (refer to Note 3). During the year ended December 31, 2019, the Company recognized $3.6 million in "General and administrative" and $3.3 million in "Real estate expense" in its consolidated statement of operations relating to operating leases.

(3)	As of December 31, 2018, includes $26.0 million of reimbursements receivable related to the construction and development of an operating property that was received in 2019.

(4)	Other assets primarily includes derivative assets, prepaid expenses and deposits for certain real estate assets.

(5)	Accumulated amortization of leasing costs was $3.3 million and $4.4 million as of December 31, 2019 and 2018, respectively.

(6)	Accumulated depreciation on corporate furniture, fixtures and equipment was $13.1 million and $11.9 million as of December 31, 2019 and 2018, respectively.

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Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):

	As of December 31,
	2019				2018
Other liabilities(1)	$	81,709			$	143,325
Finance lease liabilities (see table above)	147,749				—
Operating lease liabilities (see table above)	34,182				—
Accrued expenses	83,778				95,149
Accrued interest payable	25,733				42,669
Intangible liabilities, net(2)	51,223				35,108
Accounts payable, accrued expenses and other liabilities	$	424,374			$	316,251

_______________________________________________________________________________

(1)

As of December 31, 2019 and 2018, "Other liabilities" includes $27.5 million and $42.6 million, respectively, of deferred income. As of December 31, 2019 and 2018, "Other liabilities" includes $0.1 million and $18.5 million, respectively, related to profit sharing arrangements with developers for certain properties sold. As of December 31, 2019 and 2018, "Other liabilities" also includes $6.2 million and $9.4 million, respectively, related to tax increment financing bonds which were issued by government entities to fund development within two of the Company's land projects. The amount represents tax assessments associated with each project, which will decrease as the Company sells units or pays down the bonds.

(2)

Intangible liabilities, net includes below market lease liabilities related to the acquisition of real estate assets. Accumulated amortization on below market lease liabilities was $5.0 million and $2.8 million as of December 31, 2019 and 2018, respectively. The amortization of below market lease liabilities increased operating lease income in the Company's consolidated statements of operations by $2.3 million, $3.9 million and $1.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the weighted average amortization period for the Company's intangible liabilities was approximately 18.3 years.

Intangible assets—The estimated expense from the amortization of intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands):

2020	$	11,826
2021	11,796
2022	11,795
2023	11,641
2024	11,524

The Company's loan participations payable, net were as follows ($ in thousands):

		Carrying Value as of
		December 31, 2019				December 31, 2018
Loan participations payable(1)		$	35,656			$	22,642
Debt discounts and deferred financing costs, net		(18		)		(158		)
Total loan participations payable, net		$	35,638			$	22,484

_______________________________________________________________________________

(1)	As of December 31, 2019 and 2018, the Company had one loan participation payable with an interest rate of 6.3% and 7.0%, respectively.

 

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The Company's debt obligations were as follows ($ in thousands):

	Carrying Value as of December 31,								Stated Interest Rates		Scheduled Maturity Date
	2019				2018
Secured credit facilities and mortgages:
2015 $350 Million Revolving Credit Facility	$	—			$	—			LIBOR + 2.25%	(1)	September 2022
Senior Term Loan	491,875				646,750				LIBOR + 2.75%	(2)	June 2023
Mortgages collateralized by net lease assets(3)	721,118				802,367				3.31% - 7.26%	(3)
Total secured credit facilities and mortgages	1,212,993				1,449,117
Unsecured notes:
5.00% senior notes(4)	—				375,000				5.00%		—
4.625% senior notes(5)	—				400,000				4.625%		—
6.50% senior notes(6)	—				275,000				6.50%		—
6.00% senior notes(7)	110,545				375,000				6.00%		April 2022
5.25% senior notes(8)	400,000				400,000				5.25%		September 2022
3.125% senior convertible notes(9)	287,500				287,500				3.125%		September 2022
4.75% senior notes(10)	775,000				—				4.75%		October 2024
4.25% senior notes(11)	550,000				—				4.25%		August 2025
Total unsecured notes	2,123,045				2,112,500
Other debt obligations:
Trust preferred securities	100,000				100,000				LIBOR + 1.50%		October 2035
Total debt obligations	3,436,038				3,661,617
Debt discounts and deferred financing costs, net	(48,958		)		(52,531		)
Total debt obligations, net (12)	$	3,387,080			$	3,609,086

_______________________________________________________________________________

(1)

The loan bears interest at the Company's election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.50% or (c) LIBOR plus 1.00% and subject to a margin ranging from 1.00% to 1.50%; or (ii) LIBOR subject to a margin ranging from 2.00% to 2.50%. At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2023.

(2)	The loan bears interest at the Company's election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.50% or (c) LIBOR plus 1.00% and subject to a margin of 1.75%; or (ii) LIBOR subject to a margin of 2.75%.

(3)	In June 2019, the buyer of a portfolio of net lease assets assumed a $228.0 million non-recourse mortgage (refer to Note 4). As of December 31, 2019, the weighted average interest rate of these loans is 4.37% inclusive of the effect of interest rate swaps.

(4)	The Company prepaid these senior notes in March 2019 without penalty.

(5)	The Company prepaid these senior notes in October 2019 with a $6.0 million prepayment penalty.

(6)	The Company prepaid these senior notes in October 2019 with a $4.5 million prepayment penalty.

(7)	The Company partially prepaid these senior notes in December 2019 with a $10.1 million prepayment premium. The Company repaid the remaining senior notes in January 2020.

(8)	The Company can prepay these senior notes without penalty beginning September 15, 2021.

(9)

The Company's 3.125% senior convertible fixed rate notes due September 2022 ("3.125% Convertible Notes") are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding September 15, 2022. The conversion rate as of December 31, 2019 was 67.92 shares per $1,000 principal amount of 3.125% Convertible Notes, which equals a conversion price of $14.72 per share. Upon conversion, the Company will pay or deliver, as the case may be, a combination of cash and shares of its common stock. As such, at issuance in September 2017, the Company valued the liability component at $221.8 million, net of fees, and the equity component of the conversion feature at $22.5 million, net of fees, and recorded the equity component in "Additional paid-in capital" on the Company's consolidated balance sheet. In October 2017, the initial purchasers of the 3.125% Convertible Notes exercised their option to purchase an additional $37.5 million aggregate principal amount of the 3.125% Convertible Notes. At issuance, the Company valued the liability component at $34.0 million, net of fees, and the equity component of the conversion feature at $3.4 million, net of fees, and recorded the equity component in "Additional paid-in capital" on the Company's consolidated balance sheet. As of December 31, 2019, the carrying value of the 3.125% Convertible Notes was $268.7 million, net of fees, and the unamortized discount of the 3.125% Convertible Notes was $15.5 million, net of fees. As of December 31, 2018, the carrying value of the 3.125% Convertible Notes was $262.6 million, net of fees, and the unamortized discount of the 3.125% Convertible Notes was $20.5 million, net of fees. During the years ended December 31, 2019, 2018 and 2017, the Company recognized $9.0 million, $9.0 million and $2.5 million, respectively, of contractual interest and $5.0 million, $4.7 million and $1.3 million, respectively, of discount amortization on the 3.125% Convertible Notes. The effective interest rate for 2019, 2018 and 2017 was 5.2%.

(10)	The Company can prepay these senior notes without penalty beginning July 1, 2024.

(11)	The Company can prepay these senior notes without penalty beginning May 1, 2025.

(12)	The Company capitalized interest relating to development activities of $7.5 million, $11.3 million and $8.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

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Future Scheduled Maturities—As of December 31, 2019, future scheduled maturities of outstanding debt obligations are as follows ($ in thousands):

	Unsecured Debt				Secured Debt				Total
2020	$	—			$	—			$	—
2021	—				159,083				159,083
2022	798,045				47,901				845,946
2023	—				491,875				491,875
2024	775,000				—				775,000
Thereafter	650,000				514,134				1,164,134
Total principal maturities	2,223,045				1,212,993				3,436,038
Unamortized discounts and deferred financing costs, net	(41,228		)		(7,730		)		(48,958		)
Total debt obligations, net	$	2,181,817			$	1,205,263			$	3,387,080

Senior Term Loan—In June 2018, the Company amended its senior secured term loan (the "Senior Term Loan") to increase the amount of the loan to $650.0 million, reduce the interest rate to LIBOR plus 2.75% and extend its maturity to June 2023. The Senior Term Loan is secured by pledges of equity of certain subsidiaries that own a defined pool of assets. The Senior Term Loan permits substitution of collateral, subject to overall collateral pool coverage and concentration limits, over the life of the facility. The Company may make optional prepayments, subject to prepayment fees, and is required to repay 0.25% of the principal amount of the Senior Term Loan each quarter.

During the years ended December 31, 2018 and 2017, repayments of the Senior Term Loan prior to modifications and expenses incurred for the modifications resulted in losses on early extinguishment of debt of $2.5 million and $0.8 million, respectively.

Revolving Credit Facility—In September 2019, the Company amended its secured revolving credit facility (the "Revolving Credit Facility") to increase the maximum capacity to $350.0 million, extend the maturity date to September 2022 and make certain other changes. Outstanding borrowings under the Revolving Credit Facility are secured by pledges of the equity interests in the Company's subsidiaries that own a defined pool of assets. Borrowings under this credit facility bear interest at a floating rate indexed to one of several base rates plus a margin which adjusts upward or downward based upon the Company's corporate credit rating, ranging from 1.0% to 1.5% in the case of base rate loans and from 2.0% to 2.5% in the case of LIBOR loans. In addition, there is an undrawn credit facility commitment fee that ranges from 0.25% to 0.45%, based on corporate credit ratings. At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2023. As of December 31, 2019, based on the Company's borrowing base of assets, the Company had $350.0 million of borrowing capacity available under the Revolving Credit Facility.

Unsecured Notes—In September 2019, the Company issued $675.0 million principal amount of 4.75% senior unsecured notes due October 2024. Proceeds from the offering, together with cash on hand, were used to repay in full the $400.0 million principal amount outstanding of the 4.625% senior unsecured notes due September 2020 and the $275.0 million principal amount outstanding of the 6.50% senior unsecured notes due July 2021. In November 2019, the Company issued an additional $100.0 million principal amount of 4.75% senior unsecured notes due October 2024 at 102% of par, representing a yield to maturity of 4.29%.

In December 2019, the Company issued $550.0 million principal amount of 4.25% senior unsecured notes due August 2025. Proceeds from the offering were used to redeem the $375.0 million principal amount outstanding ($110.5 million was redeemed in January 2020) of the 6.00% senior unsecured notes due April 2022, repay a portion of the borrowings outstanding under the Senior Term Loan and pay related premiums and expenses in connection with the transaction.

During the years ended December 31, 2019, 2018 and 2017, repayments of senior unsecured notes prior to maturity resulted in losses on early extinguishment of debt of $26.6 million, $1.2 million and $13.6 million, respectively. These amounts are included in "Loss on early extinguishment of debt, net" in the Company's consolidated statements of operations.

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Collateral Assets—The carrying value of the Company's assets that are directly pledged or are held by subsidiaries whose equity is pledged as collateral to secure the Company's obligations under its secured debt facilities are as follows, by asset type ($ in thousands):

	As of December 31,
	2019								2018
	Collateral Assets(1)				Non-Collateral Assets				Collateral Assets(1)				Non-Collateral Assets
Real estate, net	$	1,409,585			$	117,634			$	1,620,008			$	151,011
Real estate available and held for sale	—				8,650				1,055				21,496
Net investment in leases	418,915				—				—				—
Land and development, net	—				580,545				12,300				585,918
Loans receivable and other lending investments, net(2)(3)	233,104				566,050				498,524				480,154
Other investments	—				907,875				—				304,275
Cash and other assets	—				814,044				—				1,329,990
Total	$	2,061,604			$	2,994,798			$	2,131,887			$	2,872,844

_______________________________________________________________________________

(1)

The Senior Term Loan and the Revolving Credit Facility are secured only by pledges of equity of certain of the Company's subsidiaries and not by pledges of the assets held by such subsidiaries. Such subsidiaries are subject to contractual restrictions under the terms of such credit facilities, including restrictions on incurring new debt (subject to certain exceptions). As of December 31, 2019, Collateral Assets includes $438.7 million carrying value of assets held by entities whose equity interests are pledged as collateral for the Revolving Credit Facility that is undrawn as of December 31, 2019.

(2)	As of December 31, 2019 and 2018, the amounts presented exclude general reserves for loan losses of $6.9 million and $13.0 million, respectively.

(3)	As of December 31, 2019 and 2018, the amounts presented exclude loan participations of $35.6 million and $22.5 million, respectively.

Debt Covenants

The Company's outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness, as such terms are defined in the indentures governing the debt securities, of at least 1.2x and a covenant not to incur additional indebtedness (except for incurrences of permitted debt), if on a pro forma basis, the Company's consolidated fixed charge coverage ratio, determined in accordance with the indentures governing the Company's debt securities, is 1.5x or lower. If any of the Company's covenants are breached and not cured within applicable cure periods, the breach could result in acceleration of its debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. If the Company's ability to incur additional indebtedness under the fixed charge coverage ratio is limited, the Company is permitted to incur indebtedness for the purpose of refinancing existing indebtedness and for other permitted purposes under the indentures.

The Company's Senior Term Loan and the Revolving Credit Facility contain certain covenants, including covenants relating to collateral coverage, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the Senior Term Loan requires the Company to maintain collateral coverage of at least 1.25x outstanding borrowings on the facility. The Revolving Credit Facility is secured by a borrowing base of assets and requires the Company to maintain both borrowing base asset value of at least 1.5x outstanding borrowings on the facility and a consolidated ratio of cash flow to fixed charges of at least 1.5x. The Revolving Credit Facility does not require that proceeds from the borrowing base be used to pay down outstanding borrowings provided the borrowing base asset value remains at least 1.5x outstanding borrowings on the facility. To satisfy this covenant, the Company has the option to pay down outstanding borrowings or substitute assets in the borrowing base. The Company may not pay common dividends if it ceases to qualify as a REIT. In June 2018, the Company amended the terms of the Senior Term Loan and the Revolving Credit Facility to include the ability to pay common dividends with no restrictions so long as the Company is not in default on any of its debt obligations.

The Company's Senior Term Loan and the Revolving Credit Facility contain cross default provisions that would allow the lenders to declare an event of default and accelerate the Company's indebtedness to them if the Company fails to pay amounts due in respect of its other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing the Company's unsecured public debt securities permit the bondholders to declare an event of default and accelerate the Company's indebtedness to them if the

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Company's other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated.

Unfunded Commitments—The Company generally funds construction and development loans and build-outs of space in real estate assets over a period of time if and when the borrowers and tenants meet established milestones and other performance criteria. The Company refers to these arrangements as Performance-Based Commitments. In addition, the Company has committed to invest capital in several real estate funds and other ventures. These arrangements are referred to as Strategic Investments.

As of December 31, 2019, the maximum amount of fundings the Company may be required to make under each category, assuming all performance hurdles and milestones are met under the Performance-Based Commitments and that 100% of its capital committed to Strategic Investments is drawn down, are as follows ($ in thousands):

	Loans and Other Lending Investments(1)				Real Estate(2)				Other Investments				Total
Performance-Based Commitments	$	225,600			$	70,047			$	131,380			$	427,027
Strategic Investments	—				—				16,851				16,851
Total	$	225,600			$	70,047			$	148,231			$	443,878

_______________________________________________________________________________

(1)	Excludes $14.3 million of commitments on loan participations sold that are not the obligation of the Company.

(2)	Includes a commitment to invest up to $55.0 million in additional bowling centers over the next several years (refer to Note 5).

Other Commitments—Total operating lease expense for the years ended December 31, 2019, 2018 and 2017 was $4.4 million, $5.0 million and $5.2 million, respectively. Future minimum lease obligations under non-cancelable operating and finance leases as of December 31, 2019 are as follows ($ in thousands):

	Operating(1)(2)				Finance(1)
2020	$	4,167			$	5,386
2021	1,803				5,494
2022	1,098				5,604
2023	728				5,716
2024	617				5,830
Thereafter	1,447				1,573,824
Total undiscounted cash flows	9,860				1,601,854
Present value discount(1)	(1,057		)		(1,454,105		)
Other adjustments(2)	25,379				—
Lease liabilities	$	34,182			$	147,749

_______________________________________________________________________________

(1)

During the year ended December 31, 2019, the Company made payments of $4.1 million related to its operating leases and $3.3 million related to its finance leases (refer to Note 4). The weighted average lease term for the Company's operating leases, excluding operating leases for which the Company's tenants pay rent on its behalf, was 4.2 years and the weighted average discount rate was 5.6%. The weighted average lease term for the Company's finance leases was 93 years and the weighted average discount rate was 5.4%.

(2)	The Company is obligated to pay ground rent under certain operating leases; however, the Company's tenants at the properties pay this expense directly under the terms of various subleases and these amounts are excluded from lease obligations. The amount shown above is the net present value of the payments to be made by the Company's tenants on its behalf.

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Future minimum lease obligations under operating leases as of December 31, 2018 were as follows ($ in thousands):

	Operating(1)
2019	$	4,340
2020	4,016
2021	1,589
2022	991
2023	849
Thereafter	2,469

_______________________________________________________________________________

(1)	The Company is obligated to pay ground rent under certain operating leases; however, the Company's tenants at the properties pay this expense directly under the terms of various subleases and these amounts are excluded from lease obligations.

Legal Proceedings—The Company and/or one or more of its subsidiaries is party to various pending litigation matters that are considered ordinary routine litigation incidental to the Company's business as a finance and investment company focused on the commercial real estate industry, including foreclosure-related proceedings. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.

Risk management

In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different points in time and potentially at different bases, than its interest-earning assets. Credit risk is the risk of default on the Company's lending investments or leases that result from a borrower's or tenant's inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of loans and other lending investments due to changes in interest rates or other market factors, including the rate of prepayments of principal and the value of the collateral underlying loans, the valuation of real estate assets by the Company as well as changes in foreign currency exchange rates.

Risk concentrations—Concentrations of credit risks arise when a number of borrowers or tenants related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions.

Substantially all of the Company's real estate as well as assets collateralizing its loans receivable are located in the United States. As of December 31, 2019, the only states with a concentration greater than 10.0% were New York with 16.7%, New Jersey with 14.2% and California with 12.5%. As of December 31, 2019, the Company's portfolio contains concentrations in the following asset types: office/industrial 28.5%, land 15.4%, entertainment/leisure 20.1%, hotel 5.2% and mixed use/mixed collateral 5.3%.

The Company underwrites the credit of prospective borrowers and tenants and often requires them to provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company's loans and real estate assets are geographically diverse and the borrowers and tenants operate in a variety of industries, to the extent the Company has a significant concentration of interest or operating lease revenues from any single borrower or tenant, the inability of that borrower or tenant to make its payment could have a material adverse effect on the Company. As of December 31, 2019, the Company's five largest borrowers or tenants collectively accounted for approximately 19.8% of the Company's 2019 revenues, of which the largest customer, from the Company's net lease segment, accounted for 11.8%.

Derivatives

The Company's use of derivative financial instruments has historically been limited to the utilization of interest rate swaps, interest rate caps and foreign exchange contracts. The principal objective of such financial instruments is to minimize the risks and/or costs associated with the Company's operating and financial structure and to manage its exposure to interest rates and foreign exchange rates. The Company may have derivatives that are not designated as hedges because they do not meet the strict hedge accounting requirements. Although not designated as hedges, such derivatives are entered into to manage the Company's

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exposure to interest rate movements and other identified risks.

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2019 and 2018 ($ in thousands)⁽¹⁾:

		Derivative Assets						Derivative Liabilities
As of December 31, 2019		Balance Sheet Location		Fair Value				Balance Sheet Location		Fair Value
Derivatives Designated in Hedging Relationships
Interest rate swaps		Deferred expenses and other assets, net		$	114			Accounts payable, accrued expenses and other liabilities		$	8,680
Total				$	114					$	8,680
As of December 31, 2018
Derivatives Designated in Hedging Relationships
Interest rate swaps		Deferred expenses and other assets, net		$	3,669			Accounts payable, accrued expenses and other liabilities		$	10,244
Total				$	3,669					$	10,244

____________________________________________________________________________

(1)	Over the next 12 months, the Company expects that $5.1 million related to cash flow hedges will be reclassified from "Accumulated other comprehensive income (loss)" as an increase to interest expense.

The tables below present the effect of the Company's derivative financial instruments, including the Company's share of derivative financial instruments at certain of its equity method investments, in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) ($ in thousands):

Derivatives Designated in Hedging Relationships		Location of Gain (Loss) When Recognized in Income		Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income				Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
For the Year Ended December 31, 2019
Interest rate swaps(1)		Interest expense		$	(21,165	)		$	(1,861	)
Interest rate swaps		Earnings from equity method investments		(21,417		)		(184		)
For the Year Ended December 31, 2018
Interest rate swaps		Interest expense		(12,963		)		(388		)
Interest rate swaps		Earnings from equity method investments		(1,736		)		20
For the Year Ended December 31, 2017
Interest rate cap		Earnings from equity method investments		(16		)		(16		)
Interest rate swaps		Interest expense		495				339
Interest rate swap		Earnings from equity method investments		368				(285		)
Foreign exchange contracts		Earnings from equity method investments		(352		)		—

______________________________________________________________

(1)	For the year ended December 31, 2019, $4.3 million of the loss recognized in accumulated other comprehensive income was attributable to a noncontrolling interest.

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		Location of Gain or (Loss) Recognized in Income		Amount of Gain or (Loss) Recognized in Income
Derivatives not Designated in Hedging Relationships(1)				For the Year Ended December 31, 2017
Interest rate cap		Other expense		$	6
Foreign exchange contracts		Other expense		(970		)

____________________________________________________________________________

(1)	The Company did not have any derivatives not designated in hedging relationships during the years ended December 31, 2019 and 2018.

Interest Rate Hedges—For derivatives designated and qualifying as cash flow hedges, the changes in the fair value of the derivatives are reported in Accumulated Other Comprehensive Income (Loss). For derivatives not designated as cash flow hedges, the changes in the fair value of the derivatives are reported in the Company's consolidated statements of operations within "Other Expense."

Credit Risk-Related Contingent Features—The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company reports derivative instruments on a gross basis in its consolidated financial statements. In connection with its derivatives which were in a liability position as of December 31, 2018, the Company posted collateral of $6.4 million and is included in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets. The Company's net exposure under these contracts was zero as of December 31, 2018.

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Preferred Stock—In December 2019, the Company issued an aggregate 16.5 million shares of its common stock upon conversion its outstanding Series J Preferred Stock at a conversion rate of 4.125 shares of common stock per each share of Series J Preferred Stock. The total carrying value of the Series J Preferred Stock prior to redemption was $193.5 million, net of discounts and fees, and was recorded in "Additional paid-in-capital" and "Convertible Preferred Stock Series J, liquidation preference $50.00 per share" on the Company's consolidated balance sheet as of December 31, 2018.

The Company had the following series of Cumulative Redeemable and Convertible Perpetual Preferred Stock outstanding as of December 31, 2019 and 2018:

									Cumulative Preferential Cash Dividends(1)(2)											Carrying Value (in thousands)
Series		Shares Issued and Outstanding (in thousands)			Par Value				Liquidation Preference(3)(4)				Rate per Annum			Annual Dividend Rate (per share)				December 31, 2019				December 31, 2018
D		4,000			$	0.001			$	25.00			8.00	%		$	2.00			$	89,041			$	89,041
G		3,200			0.001				25.00				7.65	%		1.91				72,664				72,664
I		5,000			0.001				25.00				7.50	%		1.88				120,785				120,785
J (convertible)(4)		4,000			0.001				50.00				4.50	%		2.25				—				193,510
Total		16,200																		$	282,490			$	476,000

_______________________________________________________________________________

(1)

Holders of shares of the Series D, G and I preferred stock are entitled to receive dividends, when and as declared by the Company's Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Company's Board of Directors for the payment of dividends that is not more than 30 nor less than 10 days prior to the dividend payment date.

(2)

The Company declared and paid dividends of $8.0 million, $6.1 million and $9.4 million on its Series D, G and I Cumulative Redeemable Preferred Stock during the years ended December 31, 2019 and 2018, respectively. The Company declared and paid dividends of $9.0 million and $9.0 million on its Series J Convertible Perpetual Preferred Stock during the years ended December 31, 2019 and 2018, respectively. The character of the 2019 dividends was 100% capital gain distribution, of which 34.01% represented unrecaptured section 1250 gain. The character of the 2018 dividends was 100% capital gain distribution, of which 26.02% represented unrecaptured section 1250 gain and 73.98% long term capital gain. There are no dividend arrearages on any of the preferred shares currently outstanding.

(3)	The Company may, at its option, redeem the Series G and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date.

(4)	The Company redeemed all of its Series J Preferred Stock in December 2019.

Dividends—To maintain its qualification as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the REIT. The Company has recorded NOLs and may record NOLs in the future, which may reduce its taxable income in future periods and lower or eliminate entirely the Company's obligation to pay dividends for such periods in order to maintain its REIT qualification. As of December 31, 2018, the Company had $567.7 million of NOL carryforwards at the corporate REIT level that can generally be used to offset both ordinary taxable income and capital gain net income in future years. The NOL carryforwards will begin to expire in 2031 and will fully expire in 2036 if unused. The amount of NOL carryforwards as of December 31, 2019 will be determined upon finalization of the Company's 2019 tax return. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and certain asset impairments), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows. The Senior Term Loan and the Revolving Credit Facility permit the Company to pay common dividends with no restrictions so long as the Company is not in default on any of its debt obligations. The Company declared and paid common stock dividends of $25.3 million, or $0.39 per share, for the year ended December 31, 2019 and $12.3 million, or $0.18 per share, for the year ended December 31, 2018. The character of the 2019 dividends was 100% capital gain distribution, of which 34.01% represented unrecaptured section 1250 gain. The character of the 2018 dividends was 100% capital gain distribution, of which 26.02% represented unrecaptured section 1250 gain and 73.98% long term capital gain.

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Stock Repurchase Program—The Company may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans. During the year ended December 31, 2019, the Company repurchased 7.3 million shares of its outstanding common stock for $74.6 million, for an average cost of $10.16 per share. During the three months ended March 31, 2018, the Company repurchased 0.8 million shares of its outstanding common stock for $8.3 million, for an average cost of $10.22 per share. The Company did not repurchase any shares of its common stock during the nine months ended December 31, 2018 or the year ended December 31, 2017 under stock repurchase programs. As of December 31, 2019, the Company had authorization to repurchase up to $34.2 million of common stock.

Accumulated Other Comprehensive Income (Loss)—"Accumulated other comprehensive income (loss)" reflected in the Company's shareholders' equity is comprised of the following ($ in thousands):

	As of December 31,
	2019				2018
Unrealized gains on available-for-sale securities	$	2,756			$	475
Unrealized losses on cash flow hedges	(37,264		)		(13,546		)
Unrealized losses on cumulative translation adjustment	(4,199		)		(4,199		)
Accumulated other comprehensive loss	$	(38,707	)		$	(17,270	)

Stock-Based Compensation—The Company recorded stock-based compensation expense, including the expense related to performance incentive plans (see below), of $30.4 million, $17.6 million and $18.8 million, respectively, during the years ended December 31, 2019, 2018 and 2017 in "General and administrative" in the Company's consolidated statements of operations. As of December 31, 2019, there was $2.7 million of total unrecognized compensation cost related to all unvested restricted stock units that is expected to be recognized over a weighted average remaining vesting/service period of 1.35 years.

Performance Incentive Plans—The Company's Performance Incentive Plans ("iPIP") are designed to provide, primarily to senior executives and select professionals engaged in the Company's investment activities, long-term compensation which has a direct relationship to the realized returns on investments included in the plans. Awards vest over six years, with 40% being vested at the end of the second year and 15% each year thereafter.

2019-2020 iPIP Plan—The Company's 2019-2020 iPIP plan is an equity-classified award which is measured at the grant date fair value and recognized as compensation cost in "General and administrative" in the Company's consolidated statements of operations and "Noncontrolling interests" in the Company's consolidated statements of changes in equity over the requisite service period. Investments in the 2019-2020 iPIP plan will be held by a consolidated subsidiary of the Company that has two ownership classes, class A units and class B units. The Company owns 100% of the class A units and the class B units were issued to employees as long-term compensation. Except for certain clawback provisions, participants can retain vested class B units upon their termination of employment with the Company. The class B units are entitled to distributions from the net cash realized from the investments in the plan after the Company, through its ownership of the class A units, has received a specified return on its invested capital and a return of its invested capital. Distributions on the class B units are also subject to reductions under a total shareholder return ("TSR") adjustment. The fair value of the class B units was determined using a model that forecasts the underlying cash flows from the investments within the entity to which the class B units have ownership rights. During the year ended December 31, 2019, the Company recorded $2.9 million of expense related to the 2019-2020 iPIP plan. Distributions on the class B units will be 50% in cash and 50% in shares of the Company's common stock or in shares of SAFE's common stock owned by the Company.

2013-2018 iPIP Plans—The remainder of the Company's iPIP plans, as shown in the table below, are liability-classified awards and are remeasured each reporting period at fair value until the awards are settled. Certain employees will be granted awards that entitle employees to receive the residual cash flows from the investments in the plans after the Company has received a specified return on its invested capital and a return of its invested capital. Awards are also subject to reductions under a TSR adjustment. The fair value of awards is determined using a model that forecasts the Company's projected investment performance. Settlement of the awards will be 50% in cash and 50% in shares of the Company's common stock or in shares of SAFE's common stock owned by the Company.

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The following is a summary of the status of the Company’s liability-classified iPIP plans and changes during the year ended December 31, 2019.

	iPIP Investment Pool
	2013-2014			2015-2016			2017-2018
Points at beginning of period	85.77			79.41			82.43
Granted	—			—			—
Forfeited	(4.60	)		(6.13	)		(5.16	)
Points at end of period	81.17			73.28			77.27

During the year ended December 31, 2019, the Company made distributions to participants in the 2015-2016 investment pool. The iPIP participants received total distributions in the amount of $9.4 million as compensation, comprised of cash and 356,065 shares of the Company's common stock with a fair value of $13.11 per share, which are fully-vested and issued under the 2009 LTIP (see below). After deducting statutory minimum tax withholdings, a total of 192,829 shares of the Company's common stock were issued.

During the year ended December 31, 2019, the Company made distributions to participants in the 2013-2014 investment pool. The iPIP participants received total distributions in the amount of $7.4 million as compensation, comprised of cash and 389,545 shares of the Company's common stock with a fair value of $9.21 per share, which are fully-vested and issued under the 2009 LTIP (see below). After deducting statutory minimum tax withholdings, a total of 209,118 shares of the Company's common stock were issued.

As of December 31, 2019 and 2018, the Company had accrued compensation costs relating to iPIP of $41.9 million and $37.5 million, respectively, which are included in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets.

Long-Term Incentive Plan—The Company's 2009 Long-Term Incentive Plan (the "2009 LTIP") is designed to provide incentive compensation for officers, key employees, directors and advisors of the Company. The 2009 LTIP provides for awards of stock options, shares of restricted stock, phantom shares, restricted stock units, dividend equivalent rights and other share-based performance awards. All awards under the 2009 LTIP are made at the discretion of the Company's Board of Directors or a committee of the Board of Directors. The Company's shareholders approved the 2009 LTIP in 2009 and approved the performance-based provisions of the 2009 LTIP, as amended, in 2014. In May 2019, the Company's shareholders approved an increase in the number of shares available for issuance under the 2009 LTIP from a maximum of 8.0 million to 8.9 million and extended the expiration date of the 2009 LTIP from May 2019 to May 2029.

As of December 31, 2019, an aggregate of 2.8 million shares remain available for issuance pursuant to future awards under the Company's 2009 LTIP.

Restricted Stock Units—Changes in non-vested restricted stock units ("Units") during the year ended December 31, 2019 were as follows (number of shares and $ in thousands, except per share amounts):

		Number of Shares			Weighted Average Grant Date Fair Value Per Share				Aggregate Intrinsic Value
Non-vested as of December 31, 2018		357			$	10.68			$	3,277
Granted		485			$	8.84
Vested		(153	)		$	11.12
Forfeited		(91	)		$	9.99
Non-vested as of December 31, 2019		598			$	9.18			$	8,688

The total fair value of Units vested during the years ended December 31, 2019, 2018 and 2017 was $1.8 million, $1.4 million and $0.9 million, respectively. The weighted-average grant date fair value per share of Units granted during the years ended December 31, 2019, 2018 and 2017 was $8.84, $10.16 and $12.09, respectively.

Directors' Awards—Non-employee directors are awarded CSEs or restricted share awards at the time of the annual shareholders' meeting in consideration for their services on the Company's Board of Directors. During the year ended December 31, 2019, the Company awarded to non-employee Directors 65,936 restricted shares of common stock at a fair value per share of $8.74

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at the time of grant. These restricted shares have a vesting term of one year. The Company also issued a total of 6,254 CSEs at a fair value of $10.90 in respect of dividend equivalents on outstanding CSEs during the year ended December 31, 2019. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the CSEs and restricted shares of common stock vest and are settled. As of December 31, 2019, a combined total of 244,360 CSEs and restricted shares of common stock granted to members of the Company's Board of Directors remained outstanding under the Company's Non-Employee Directors Deferral Plan, with an aggregate intrinsic value of $3.5 million.

401(k) Plan—The Company has a savings and retirement plan (the "401(k) Plan"), which is a voluntary, defined contribution plan. All employees are eligible to participate in the 401(k) Plan following completion of three months of continuous service with the Company. Each participant may contribute on a pretax basis up to the maximum percentage of compensation and dollar amount permissible under Section 402(g) of the Internal Revenue Code not to exceed the limits of Code Sections 401(k), 404 and 415. At the discretion of the Company's Board of Directors, the Company may make matching contributions on the participant's behalf of up to 50% of the participant's contributions, up to a maximum of 10% of the participants' compensation. The Company made gross contributions of $0.9 million, $1.1 million and $1.1 million, respectively, for the years ended December 31, 2019, 2018 and 2017.

Earnings per share ("EPS") is calculated using the two-class method, which allocates earnings among common stock and participating securities, if applicable, to calculate EPS when an entity's capital structure includes either two or more classes of common stock or common stock and participating securities.

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The following table presents a reconciliation of income (loss) from continuing operations used in the basic and diluted EPS calculations ($ in thousands, except for per share data):

	For the Years Ended December 31,
	2019				2018				2017
Income (loss) from continuing operations	$	334,325			$	(18,326	)		$	51,851
Net income attributable to noncontrolling interests	(10,283		)		(13,936		)		(4,526		)
Preferred dividends	(32,495		)		(32,495		)		(48,444		)
Premium above book value on redemption of preferred stock	—				—				(16,314		)
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders for basic earnings per common share	$	291,547			$	(64,757	)		$	(17,433	)
Add: Effect of Series J convertible perpetual preferred stock	9,000				—				—
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders for diluted earnings per common share	$	300,547			$	(64,757	)		$	(17,433	)

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	For the Years Ended December 31,
	2019				2018				2017
Earnings allocable to common shares:
Numerator for basic earnings per share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	291,547			$	(64,757	)		$	(17,433	)
Income from discontinued operations	—				—				4,939
Gain from discontinued operations	—				—				123,418
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	291,547			$	(64,757	)		$	110,924
Numerator for diluted earnings per share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	300,547			$	(64,757	)		$	(17,433	)
Income from discontinued operations	—				—				4,939
Gain from discontinued operations	—				—				123,418
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	300,547			$	(64,757	)		$	110,924
Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic earnings per common share	64,696				67,958				71,021
Add: Effect of assumed shares issued under treasury stock method for restricted stock units	146				—				—
Add: Effect of series J convertible perpetual preferred stock	15,824				—				—
Weighted average common shares outstanding for diluted earnings per common share	80,666				67,958				71,021
Basic earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	4.51			$	(0.95	)		$	(0.25	)
Income from discontinued operations	—				—				0.07
Gain from discontinued operations	—				—				1.74
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	4.51			$	(0.95	)		$	1.56
Diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	3.73			$	(0.95	)		$	(0.25	)
Income from discontinued operations	—				—				0.07
Gain from discontinued operations	—				—				1.74
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	3.73			$	(0.95	)		$	1.56

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For the years ended December 31, 2019, 2018 and 2017, the following shares were not included in the diluted EPS calculation because they were anti-dilutive (in thousands)^(1)(2)(3):

	For the Years Ended December 31,
	2019			2018			2017
Joint venture shares	—			—			255
Series J convertible perpetual preferred stock	—			15,704			15,635

_______________________________________________________________________________

(1)	For the year ended December 31, 2017, the effect of 6 and 17 unvested time and market-based Units, respectively, were anti-dilutive due to the Company having a net loss for the period.

(2)	For the year ended December 31, 2018, the effect of the Company's unvested Units, CSEs and restricted stock awards were anti-dilutive due to the Company having a net loss for the period.

(3)

The Company will settle conversions of the 3.125% Convertible Notes by paying the conversion value in cash up to the original principal amount of the notes being converted and shares of common stock to the extent of any conversion premium. The amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value calculated for each trading day in a 40 consecutive day observation period. Based upon the conversion price of the 3.125% Convertible Notes, no shares of common stock would have been issuable upon conversion of the 3.125% Convertible Notes for the years ended December 31, 2019, 2018, and 2017, and therefore the 3.125% Convertible Notes had no effect on diluted EPS for such periods.

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:

Level 1:    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2:    Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3:    Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Certain of the Company's assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.

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The following fair value hierarchy table summarizes the Company's assets and liabilities recorded at fair value on a recurring and non-recurring basis by the above categories ($ in thousands):

					Fair Value Using
	Total				Quoted market prices in active markets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
As of December 31, 2019
Recurring basis:
Derivative assets(1)	$	114			$	—			$	114			$	—
Derivative liabilities(1)	8,680				—				8,680				—
Available-for-sale securities(1)	23,896				—				—				23,896
Non-recurring basis:
Impaired land and development(2)	40,000				—				—				40,000
As of December 31, 2018
Recurring basis:
Derivative assets(1)	$	3,669			$	—			$	3,669			$	—
Derivative liabilities(1)	10,244				—				10,244				—
Available-for-sale securities(1)	$	21,661			$	—			$	—			$	21,661
Non-recurring basis:
Impaired real estate(3)	29,400				—				—				29,400
Impaired real estate available and held for sale(4)	19,300				—				—				19,300
Impaired land and development(5)	78,400				—				—				78,400

_______________________________________________________________________________

(1)	The fair value of the Company's derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. The fair value of the Company's available-for-sale securities are based upon unadjusted third-party broker quotes and are classified as Level 3.

(2)	The Company recorded aggregate impairments of $5.3 million on two land and development assets with an estimated aggregate fair value of $40.0 million. The estimated fair values are based on expected sales proceeds.

(3)	The Company recorded aggregate impairments of $76.3 million on three real estate assets with an estimated aggregate fair value of $29.4 million. The impairments were as follows:

i.	A $23.2 million impairment on a commercial operating property based on a decline in expected operating performance. The fair value is based on the Company's estimate of the recoverability of its investment in the project.

ii.	A $6.0 million impairment on a property based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iii.	A $47.1 million impairment on a commercial operating property based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

(4)	The Company recorded aggregate impairments of $3.7 million on two real estate assets held for sale. The fair values are based on market comparable sales.

(5)	The Company recorded aggregate impairments of $55.4 million on four land and development assets with an estimated aggregate fair value of $78.4 million. The impairments were as follows:

i.	A $25.0 million impairment on a waterfront land and development asset based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

ii.	A $21.6 million impairment on a master planned community based on a strategic decision to sell the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iii.	A $6.9 million impairment on an infill land and development asset based on the deterioration of the asset. The fair value is based on purchase offers received from third parties, which is consistent with the Company's estimate of fair value.

iv.	A $1.9 million impairment on a waterfront land and development asset based on the sale of the asset in 2019.

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The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company's consolidated balance sheets for the years ended December 31, 2019 and 2018 ($ in thousands):

		2019				2018
Beginning balance		$	21,661			$	22,842
Repayments		(45		)		(46		)
Unrealized gains (losses) recorded in other comprehensive income		2,280				(1,135		)
Ending balance		$	23,896			$	21,661

Fair values of financial instruments—The Company's estimated fair values of its loans receivable and other lending investments and outstanding debt was $0.9 billion and $3.6 billion, respectively, as of December 31, 2019 and $1.0 billion and $3.5 billion, respectively, as of December 31, 2018. The Company determined that the significant inputs used to value its loans receivable and other lending investments and debt obligations fall within Level 3 of the fair value hierarchy. The carrying value of other financial instruments including cash and cash equivalents, restricted cash, net investment in leases, accrued interest receivable and accounts payable, approximate the fair values of the instruments. Cash and cash equivalents and restricted cash values are considered Level 1 on the fair value hierarchy. The fair value of other financial instruments, including derivative assets and liabilities, are included in the fair value hierarchy table above.

Given the nature of certain assets and liabilities, clearly determinable market based valuation inputs are often not available, therefore, these assets and liabilities are valued using internal valuation techniques. Subjectivity exists with respect to these internal valuation techniques, therefore, the fair values disclosed may not ultimately be realized by the Company if the assets were sold or the liabilities were settled with third parties. The methods the Company used to estimate the fair values presented in the table above are described more fully below for each type of asset and liability.

Derivatives—The Company uses interest rate swaps, interest rate caps and foreign exchange contracts to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparty's non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. The Company has determined that the significant inputs used to value its derivatives fall within Level 2 of the fair value hierarchy.

Impaired loans—The Company's loans identified as being impaired are nearly all collateral dependent loans and are evaluated for impairment by comparing the estimated fair value of the underlying collateral, less costs to sell, to the carrying value of each loan. Due to the nature of the individual properties collateralizing the Company's loans, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the collateral. This approach requires the Company to make judgments in respect to significant unobservable inputs, which may include discount rates, capitalization rates and the timing and amounts of estimated future cash flows. For income producing properties, cash flows generally include property revenues, operating costs and capital expenditures that are based on current observable market rates and estimates for market rate growth and occupancy levels. For other real estate, cash flows may include lot and unit sales that are based on current observable market rates and estimates for annual revenue growth, operating costs, costs of completion and the inventory sell out pricing and timing. The Company will also consider market comparables if available. In some cases, the Company obtains external "as is" appraisals for loan collateral, generally when third party participations exist, and appraised values may be discounted when real estate markets rapidly deteriorate. The Company has determined that significant inputs used in its internal valuation models and appraisals fall within Level 3 of the fair value hierarchy.

Impaired real estate—If the Company determines a real estate asset available and held for sale is impaired, it records an impairment charge to adjust the asset to its estimated fair market value less costs to sell. Due to the nature of individual real estate properties, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the assets. This approach requires the Company to make judgments with respect to significant unobservable inputs, which may include discount rates, capitalization rates and the timing and amounts of estimated future cash flows. For income producing properties, cash flows generally include property revenues, operating costs and capital expenditures that are based on current observable market rates and estimates for market rate growth and occupancy levels. For other real estate, cash

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flows may include lot and unit sales that are based on current observable market rates and estimates for annual market rate growth, operating costs, costs of completion and the inventory sell out pricing and timing. The Company will also consider market comparables if available. In some cases, the Company obtains external "as is" appraisals for real estate assets and appraised values may be discounted when real estate markets rapidly deteriorate. The Company has determined that significant inputs used in its internal valuation models and appraisals fall within Level 3 of the fair value hierarchy. Additionally, in certain cases, if the Company is under contract to sell an asset, it will mark the asset to the contracted sales price less costs to sell. The Company considers this to be a Level 3 input under the fair value hierarchy.

Loans receivable and other lending investments and net investment in leases—The Company estimates the fair value of its performing loans and other lending investments and net investment in leases using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates or rental rates that would be offered for loans or tenants with similar characteristics and credit quality. The Company determined that the significant inputs used to value its loans and other lending investments and net investment in leases fall within Level 3 of the fair value hierarchy. For certain lending investments, the Company uses market quotes, to the extent they are available, that fall within Level 2 of the fair value hierarchy or broker quotes that fall within Level 3 of the fair value hierarchy.

Debt obligations, net—For debt obligations traded in secondary markets, the Company uses market quotes, to the extent they are available, to determine fair value and are considered Level 2 on the fair value hierarchy. For debt obligations not traded in secondary markets, the Company determines fair value using a discounted cash flow methodology, whereby contractual cash flows are discounted at rates that management determines best reflect current market interest rates that would be charged for debt with similar characteristics and credit quality. The Company has determined that the inputs used to value its debt obligations under the discounted cash flow methodology fall within Level 3 of the fair value hierarchy.

The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Finance, Net Lease, Operating Properties and Land and Development. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans and real estate related securities. The Net Lease segment includes the Company's activities and operations related to the ownership of properties generally leased to single corporate tenants and its investment in SAFE (refer to Note 8). The Operating Properties segment includes the Company's activities and operations related to its commercial and residential properties. The Land and Development segment includes the Company's activities related to its developable land portfolio.

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The Company evaluates performance based on the following financial measures for each segment. The Company's segment information is as follows ($ in thousands):

	Real Estate Finance				Net Lease				Operating Properties				Land and Development				Corporate/Other(1)				Company Total
Year Ended December 31, 2019
Operating lease income	$	—			$	177,679			$	28,423			$	286			$	—			$	206,388
Interest income	75,636				2,018				—				—				—				77,654
Interest income from sales-type leases	—				20,496				—				—				—				20,496
Other income	4,946				16,718				17,384				7,838				8,477				55,363
Land development revenue	—				—				—				119,595				—				119,595
Earnings (losses) from equity method investments	—				29,235				8,298				4,322				(6		)		41,849
Selling profit from sales-type leases	—				180,416				—				—				—				180,416
Income from sales of real estate	—				224,654				11,969				—				—				236,623
Total revenue and other earnings	80,582				651,216				66,074				132,041				8,471				938,384
Real estate expense	—				(24,786		)		(35,322		)		(32,318		)		—				(92,426		)
Land development cost of sales	—				—				—				(109,663		)		—				(109,663		)
Other expense	(462		)		—				—				—				(12,658		)		(13,120		)
Allocated interest expense	(29,587		)		(95,154		)		(10,249		)		(20,706		)		(28,223		)		(183,919		)
Allocated general and administrative(2)	(8,254		)		(25,990		)		(2,887		)		(11,957		)		(19,085		)		(68,173		)
Segment profit (loss)(3)	$	42,279			$	505,286			$	17,616			$	(42,603	)		$	(51,495	)		$	471,083
Other significant items:
Provision for loan losses	$	6,482			$	—			$	—			$	—			$	—			$	6,482
Impairment of assets	—				2,471				3,853				6,427				668				13,419
Depreciation and amortization	—				51,091				4,977				977				1,214				58,259
Capitalized expenditures	—				31,445				5,617				99,031				—				136,093
Year Ended December 31, 2018
Operating lease income	$	—			$	151,958			$	55,677			$	557			$	—			$	208,192
Interest income	97,878				—				—				—				—				97,878
Other income	4,556				4,286				54,361				7,320				11,819				82,342
Land development revenue	—				—				—				409,710				—				409,710
Earnings (losses) from equity method investments	—				8,479				(1,003		)		(3,110		)		(9,373		)		(5,007		)
Gain from consolidation of equity method investment	—				67,877				—				—				—				67,877
Income from sales of real estate	—				45,038				80,966				—				—				126,004
Total revenue and other earnings	102,434				277,638				190,001				414,477				2,446				986,996
Real estate expense	—				(17,033		)		(80,570		)		(41,686		)		—				(139,289		)
Land development cost of sales	—				—				—				(350,181		)		—				(350,181		)
Other expense	(1,578		)		—				—				—				(4,462		)		(6,040		)
Allocated interest expense	(40,653		)		(63,706		)		(18,618		)		(21,897		)		(38,877		)		(183,751		)
Allocated general and administrative(2)	(12,997		)		(20,713		)		(6,574		)		(14,313		)		(19,975		)		(74,572		)
Segment profit (loss) (3)	$	47,206			$	176,186			$	84,239			$	(13,600	)		$	(60,868	)		$	233,163
Other significant non-cash items:
Provision for loan losses	$	16,937			$	—			$	—			$	—			$	—			$	16,937
Impairment of assets	—				10,391				79,991				56,726				—				147,108
Depreciation and amortization	—				38,588				17,417				1,353				1,341				58,699
Capitalized expenditures	—				40,215				19,912				144,595				—				204,722

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	Real Estate Finance				Net Lease				Operating Properties				Land and Development				Corporate/Other(1)				Company Total
Year Ended December 31, 2017
Operating lease income	$	—			$	123,685			$	63,159			$	840			$	—			$	187,684
Interest income	106,548				—				—				—				—				106,548
Other income	2,633				2,603				49,641				126,259				6,955				188,091
Land development revenue	—				—				—				196,879				—				196,879
Earnings (losses) from equity method investments	—				5,086				(772		)		7,292				1,409				13,015
Income from discontinued operations	—				4,939				—				—				—				4,939
Gain from discontinued operations	—				123,418				—				—				—				123,418
Income from sales of real estate	—				87,512				4,537				—				—				92,049
Total revenue and other earnings	109,181				347,243				116,565				331,270				8,364				912,623
Real estate expense	—				(16,742		)		(89,725		)		(41,150		)		—				(147,617		)
Land development cost of sales	—				—				—				(180,916		)		—				(180,916		)
Other expense	(1,413		)		—				—				—				(19,541		)		(20,954		)
Allocated interest expense	(40,359		)		(53,710		)		(20,171		)		(28,033		)		(52,413		)		(194,686		)
Allocated general and administrative(2)	(15,223		)		(19,563		)		(8,075		)		(16,483		)		(20,726		)		(80,070		)
Segment profit (loss) (3)	$	52,186			$	257,228			$	(1,406	)		$	64,688			$	(84,316	)		$	288,380
Other significant non-cash items:
Recovery of loan losses	$	(5,828	)		$	—			$	—			$	—			$	—			$	(5,828	)
Impairment of assets	—				5,486				6,358				20,535				—				32,379
Depreciation and amortization	—				28,132				17,684				1,896				1,321				49,033
Capitalized expenditures	—				4,838				35,754				125,744				—				166,336

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	Real Estate Finance				Net Lease				Operating Properties				Land and Development				Corporate/Other(1)				Company Total
As of December 31, 2019
Real estate
Real estate, net	$	—			$	1,327,082			$	200,137			$	—			$	—			$	1,527,219
Real estate available and held for sale	—				—				8,650				—				—				8,650
Total real estate	—				1,327,082				208,787				—				—				1,535,869
Net investment in leases	—				418,915				—				—				—				418,915
Land and development, net	—				—				—				580,545				—				580,545
Loans receivable and other lending investments, net	783,522				44,339				—				—				—				827,861
Other investments	—				760,068				61,686				42,866				43,255				907,875
Total portfolio assets	$	783,522			$	2,550,404			$	270,473			$	623,411			$	43,255			4,271,065
Cash and other assets																					814,044
Total assets																					$	5,085,109
As of December 31, 2018
Real estate
Real estate, net	$	—			$	1,536,494			$	234,525			$	—			$	—			$	1,771,019
Real estate available and held for sale	—				1,055				21,496				—				—				22,551
Total real estate	—				1,537,549				256,021				—				—				1,793,570
Land and development, net	—				—				—				598,218				—				598,218
Loans receivable and other lending investments, net	988,224				—				—				—				—				988,224
Other investments	—				165,804				65,643				65,312				7,516				304,275
Total portfolio assets	$	988,224			$	1,703,353			$	321,664			$	663,530			$	7,516			3,684,287
Cash and other assets																					1,329,990
Total assets																					$	5,014,277

_______________________________________________________________________________

(1)	Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not included in the other reportable segments above.

(2)	General and administrative excludes stock-based compensation expense of $30.4 million, $17.6 million and $18.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

(3)	The following is a reconciliation of segment profit to net income (loss) ($ in thousands):

	For the Years Ended December 31,
	2019				2018				2017
Segment profit	$	471,083			$	233,163			$	288,380
Add/Less: (Provision for) recovery of loan losses	(6,482		)		(16,937		)		5,828
Less: Impairment of assets	(13,419		)		(147,108		)		(32,379		)
Less: Depreciation and amortization	(58,259		)		(58,699		)		(49,033		)
Less: Stock-based compensation expense	(30,436		)		(17,563		)		(18,812		)
Less: Income tax (expense) benefit	(438		)		(815		)		948
Less: Loss on early extinguishment of debt, net	(27,724		)		(10,367		)		(14,724		)
Net income (loss)	$	334,325			$	(18,326	)		$	180,208

---

The following table sets forth the selected quarterly financial data for the Company ($ in thousands, except per share amounts).

		For the Quarters Ended
		December 31,				September 30,				June 30,				March 31,
2019:
Revenue		$	128,888			$	145,338			$	98,468			$	106,802
Net income (loss)		$	(36,022	)		$	3,626			$	373,691			$	(6,970	)
Net income (loss) attributable to iStar Inc.		$	(38,137	)		$	781			$	370,839			$	(9,441	)
Earnings per common share data(1):
Net income (loss) attributable to common shareholders
Basic		$	(46,260	)		$	(7,343	)		$	362,715			$	(17,565	)
Diluted		$	(46,260	)		$	(7,343	)		$	364,965			$	(17,565	)
Earnings per share
Basic		$	(0.71	)		$	(0.12	)		$	5.67			$	(0.26	)
Diluted		$	(0.71	)		$	(0.12	)		$	4.55			$	(0.26	)
Weighted average number of common shares
Basic		64,910				62,168				64,019				67,747
Diluted		64,910				62,168				80,259				67,747
2018:
Revenue		$	140,165			$	122,141			$	171,571			$	364,245
Net income (loss)		$	(105,028	)		$	(8,832	)		$	60,506			$	35,028
Net income (loss) attributable to iStar Inc.		$	(107,332	)		$	(10,860	)		$	50,997			$	34,933
Earnings per common share data(1):
Net income (loss) attributable to common shareholders
Basic		$	(115,455	)		$	(18,984	)		$	42,873			$	26,809
Diluted		$	(115,455	)		$	(18,984	)		$	45,123			$	29,059
Earnings per share
Basic		$	(1.70	)		$	(0.28	)		$	0.63			$	0.39
Diluted		$	(1.70	)		$	(0.28	)		$	0.54			$	0.35
Weighted average number of common shares
Basic		68,012				67,975				67,932				67,913
Diluted		68,012				67,975				83,694				83,670

_______________________________________________________________________________

(1) Basic and diluted EPS are computed independently based on the weighted-average shares of common stock and stock equivalents outstanding for each period. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year.

Schedule II—Valuation and Qualifying Accounts and Reserves

($ in thousands)

		Balance at Beginning of Period				Charged to Costs and Expenses				Adjustments to Valuation Accounts				Deductions				Balance at End of Period
For the Year Ended December 31, 2017
Reserve for loan losses(1)(2)		$	85,545			$	(5,828	)		$	—			$	(1,228	)		$	78,489
Allowance for doubtful accounts(2)		2,588				473				—				(451		)		2,610
Allowance for deferred tax assets(2)		66,498				7,108				(9,318		)		(1,030		)		63,258
		$	154,631			$	1,753			$	(9,318	)		$	(2,709	)		$	144,357
For the Year Ended December 31, 2018
Reserve for loan losses(1)(2)		$	78,489			$	16,937			$	—			$	(42,031	)		$	53,395
Allowance for doubtful accounts(2)		2,610				1,300				—				(639		)		3,271
Allowance for deferred tax assets(2)		63,258				14,849				—				—				78,107
		$	144,357			$	33,086			$	—			$	(42,670	)		$	134,773
For the Year Ended December 31, 2019
Reserve for loan losses(1)(2)		$	53,395			$	6,482			$	—			$	(31,243	)		$	28,634
Allowance for doubtful accounts(2)		3,271				(696		)		—				(633		)		1,942
Allowance for deferred tax assets(2)		78,107				1,538				—				—				79,645
		$	134,773			$	7,324			$	—			$	(31,876	)		$	110,221

_____________________________________________________________

(1)	Refer to Note 7 to the Company's consolidated financial statements.

(2)	Refer to Note 3 to the Company's consolidated financial statements.

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
OFFICE FACILITIES:
Tempe, Arizona	OFF001	$	—			(1)			$	1,033			$	6,652			$	2,942			$	1,033			$	9,594			$	10,627			$	4,959			1999		40.0
Tempe, Arizona	OFF002	—				(1)			1,033				6,652				491				1,033				7,143				8,176				3,521				1999		40.0
Tempe, Arizona	OFF003	—				(1)			1,033				6,652				556				1,033				7,208				8,241				3,524				1999		40.0
Tempe, Arizona	OFF004	—				(1)			701				4,339				2,171				701				6,510				7,211				2,551				1999		40.0
Alameda, California	OFF005	26,726							9,702				29,831				1,152				9,702				30,983				40,685				1,437				2018		40.0
Ft. Collins, Colorado	OFF006	—							—				16,752				(11,239		)		—				5,513				5,513				237				2002		40.0
Lisle, Illinois	OFF007	22,527							7,681				30,230				—				7,681				30,230				37,911				1,446				2018		40.0
Cockeysville, Maryland	OFF008	115,000							19,529				148,286				(324		)		19,529				147,962				167,491				4,563				2018		40.0
Chelmsford, Massachusetts	OFF009	7,096				(1)			1,600				21,947				285				1,600				22,232				23,832				9,982				2002		40.0
Jersey City, New Jersey	OFF010	63,500							—				99,296				—				—				99,296				99,296				2,097				2019		40.0
Mt. Laurel, New Jersey	OFF011	47,901				(1)			7,726				74,429				10				7,724				74,441				82,165				31,757				2002		40.0
Riverview, New Jersey	OFF012	7,755				(1)			1,008				13,763				206				1,008				13,969				14,977				5,492				2004		40.0
Riverview, New Jersey	OFF013	18,471				(1)			2,456				28,955				814				2,456				29,769				32,225				11,753				2004		40.0
North Hills, New York	OFF014	70,312							19,631				104,527				—				19,631				104,527				124,158				4,104				2018		40.0
Austin, Texas	OFF015	91,000							—				88,136				15,681				—				103,817				103,817				921				2019		40.0
Irving, Texas	OFF016	—				(1)			1,364				10,628				5,780				2,373				15,399				17,772				8,414				1999		40.0
Oakton, Virginia	OFF017	54,813							14,242				68,610				—				14,242				68,610				82,852				3,105				2018		40.0
Subtotal		$	525,101						$	88,739			$	759,685			$	18,525			$	89,746			$	777,203			$	866,949			$	99,863
INDUSTRIAL FACILITIES:
Montague, Michigan	IND001	—				(1)			598				9,814				—				598				9,814				10,412				4,213				2007		40.0
Little Falls, Minnesota	IND002	—				(1)			6,705				17,690				—				6,225				18,170				24,395				6,774				2005		40.0
Jackson, Ohio	IND003	39,662							1,990				56,329				16,995				1,990				73,324				75,314				2,544				2018		40.0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
El Reno, Oklahoma	IND004	8,226							401				7,644				—				401				7,644				8,045				614				2018		40.0
Fort Worth, Texas	IND005	8,226							2,341				17,142				—				2,341				17,142				19,483				805				2018		40.0
Chippewa Falls, Wisconsin	IND006	29,961							2,845				55,805				—				2,845				55,805				58,650				2,637				2018		40.0
Subtotal		$	86,075						$	14,880			$	164,424			$	16,995			$	14,400			$	181,899			$	196,299			$	17,587
LAND:
Scottsdale, Arizona	LAN001	—							1,400				—				800				2,200				—				2,200				—				2011		0
Scottsdale, Arizona	LAN002	—							34,492				—				—				34,492				—				34,492				—				2019		0
Whittmann, Arizona	LAN003	—				(1	)		96,700				—				—				96,700				—				96,700				—				2010		0
Mammoth Lakes, California	LAN004	—							28,464				2,836				(20,742		)		7,722				2,836				10,558				2,836				2010		0
San Jose, California	LAN005	—							8,921				—				—				8,921				—				8,921				—				2017		0
Santa Clarita Valley, California	LAN006	—							59,100				—				(24,100		)		35,000				—				35,000				—				2010		0
Fort Myers, Florida	LAN007	—							5,883				—				(2,816		)		3,067				—				3,067				—				2014		0
Indiantown, Florida	LAN008	—							8,100				—				—				8,100				—				8,100				—				2009		0
Naples, Florida	LAN009	—							26,600				—				(142		)		26,458				—				26,458				4				2010		0
Chicago, Illinois	LAN010	—							31,500				—				—				31,500				—				31,500				—				2016		0
Asbury Park, New Jersey	LAN011	—							43,300				—				31,622				74,922				—				74,922				1,050			(3)	2009		0
Asbury Park, New Jersey	LAN012	—							3,992				—				148,681				152,673				—				152,673				—				2009		0
Asbury Park, New Jersey	LAN013	—							111				5,954				1,980				111				7,934				8,045				—				2009		0
Brooklyn, New York	LAN014	—							58,900				—				(19,874		)		39,026				—				39,026				—				2011		0
Long Beach, New York	LAN015	—							52,461				—				(22,461		)		30,000				—				30,000				—				2009		0
Wawarsing, New York	LAN016	—							4,600				—				—				4,600				—				4,600				—				2018		0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
Chesterfield County, Virginia	LAN017	—							72,138				—				45,873				118,011				—				118,011				5,141			(3)	2009		0
Ranson, West Virginia	LAN018	—							9,083				—				(4,083		)		5,000				—				5,000				—				2016		0
Subtotal		$	—						$	545,745			$	8,790			$	134,738			$	678,503			$	10,770			$	689,273			$	9,031
ENTERTAINMENT:
Birmingham, Alabama	ENT001	1,668							1,939				1,840				—				1,939				1,840				3,779				173				2018		40.0
Avondale, Arizona	ENT002	1,332							389				2,074				1				389				2,075				2,464				117				2018		40.0
Glendale, Arizona	ENT003	2,350							1,750				2,118				—				1,750				2,118				3,868				188				2018		40.0
Gilbert, Arizona	ENT004	4,948							1,969				3,552				—				1,969				3,552				5,521				247				2018		40.0
Mesa, Arizona	ENT005	1,492							970				1,710				—				970				1,710				2,680				114				2018		40.0
Scottsdale, Arizona	ENT006	1,746							1,205				1,933				—				1,205				1,933				3,138				122				2018		40.0
Tucson, Arizona	ENT007	976							456				877				1				456				878				1,334				68				2018		40.0
Chula Vista, California	ENT008	2,630							2,032				4,869				—				2,032				4,869				6,901				332				2018		40.0
Fontana, California	ENT009	1,626							1,097				1,882				1				1,097				1,883				2,980				147				2018		40.0
Moreno Valley, California	ENT010	1,549							990				1,910				—				990				1,910				2,900				137				2018		40.0
Murrieta, California	ENT011	2,838							1,649				3,803				—				1,649				3,803				5,452				259				2018		40.0
Norco, California	ENT012	2,649							1,503				3,608				—				1,503				3,608				5,111				237				2018		40.0
Palmdale, California	ENT013	1,136							777				1,963				—				777				1,963				2,740				158				2018		40.0
San Diego, California	ENT014	—				(1)			—				18,000				—				—				18,000				18,000				6,880				2003		40.0
Thousand Oaks, California	ENT015	—				(1)			—				1,953				25,772				—				27,725				27,725				7,507				2008		40.0
Upland, California	ENT016	1,626							1,167				1,930				—				1,167				1,930				3,097				141				2018		40.0
Brampton, ONT, Canada	ENT017	2,137							1,231				2,491				—				1,231				2,491				3,722				176				2018		40.0
Aurora, Colorado	ENT018	1,645							1,057				1,719				—				1,057				1,719				2,776				133				2018		40.0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
Colorado Springs, Colorado	ENT019	1,120							497				820				—				497				820				1,317				72				2018		40.0
Lakewood, Colorado	ENT020	1,559							713				2,206				—				713				2,206				2,919				112				2018		40.0
Lone Tree, Colorado	ENT021	5,625							2,880				5,586				—				2,880				5,586				8,466				345				2018		40.0
Westminster, Colorado	ENT022	1,650							1,018				1,886				—				1,018				1,886				2,904				134				2018		40.0
Wheat Ridge, Colorado	ENT023	1,070							669				1,671				—				669				1,671				2,340				119				2018		40.0
Apopka, Florida	ENT024	1,174							757				1,347				—				757				1,347				2,104				103				2018		40.0
Boca Raton, Florida	ENT025	—				(1)			—				41,809				—				—				41,809				41,809				22,913				2005		27.0
Boynton Beach, Florida	ENT026	—				(1)			6,550				—				17,118				6,533				17,135				23,668				5,424				2006		40.0
Margate, Florida	ENT027	1,259							513				493				—				513				493				1,006				31				2018		40.0
Melbourne, Florida	ENT028	1,326							843				1,537				—				843				1,537				2,380				119				2018		40.0
St. Petersburg, Florida	ENT029	—				(1)			4,200				18,272				—				4,200				18,272				22,472				6,783				2005		40.0
W. Palm Beach, Florida	ENT030	—				(1)			—				19,337				—				—				19,337				19,337				7,176				2005		40.0
Augusta, Georgia	ENT031	1,942							1,383				3,776				—				1,383				3,776				5,159				227				2018		40.0
Kennesaw, Georgia	ENT032	4,621							2,098				5,113				(1		)		2,098				5,112				7,210				300				2018		40.0
Lawrenceville, Georgia	ENT033	1,455							911				1,285				—				911				1,285				2,196				95				2018		40.0
Marietta, Georgia	ENT034	2,105							1,180				1,436				—				1,180				1,436				2,616				102				2018		40.0
Marietta, Georgia	ENT035	1,252							715				760				—				715				760				1,475				66				2018		40.0
Norcross, Georgia	ENT036	2,352							1,110				380				—				1,110				380				1,490				60				2018		40.0
Roswell, Georgia	ENT037	2,084							893				311				1				893				312				1,205				32				2018		40.0
Algonquin, Illinois	ENT038	3,081							1,312				4,041				—				1,312				4,041				5,353				314				2018		40.0
Buffalo Grove, Illinois	ENT039	1,676							861				3,945				—				861				3,945				4,806				238				2018		40.0
Chicago, Illinois	ENT040	—				(1)			8,803				57				30,479				8,803				30,536				39,339				9,403				2006		40.0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
Glendale Heights, Illinois	ENT041	1,082							455				819				1				455				820				1,275				47				2018		40.0
Lake Zurich, Illinois	ENT042	1,199							924				238				1				924				239				1,163				97				2018		40.0
Mount Prospect, Illinois	ENT043	1,225							704				956				(1		)		704				955				1,659				66				2018		40.0
Romeoville, Illinois	ENT044	2,950							2,254				3,251				—				2,254				3,251				5,505				289				2018		40.0
Roselle, Illinois	ENT045	1,091							730				682				—				730				682				1,412				72				2018		40.0
River Grove, Illinois	ENT046	1,772							1,754				3,289				(1		)		1,754				3,288				5,042				238				2018		40.0
Vernon Hills, Illinois	ENT047	978							600				666				—				600				666				1,266				64				2018		40.0
Waukegan, Illinois	ENT048	622							342				670				—				342				670				1,012				50				2018		40.0
Woodridge, Illinois	ENT049	1,169							829				1,597				(1		)		829				1,596				2,425				120				2018		40.0
Columbia, Maryland	ENT050	1,704							1,762				1,300				—				1,762				1,300				3,062				124				2018		40.0
Ellicott City, Maryland	ENT051	1,325							889				1,632				1				889				1,633				2,522				96				2018		40.0
Blaine, Minnesota	ENT052	2,619							1,801				2,814				(1		)		1,801				2,813				4,614				250				2018		40.0
Brooklyn Park, Minnesota	ENT053	2,612							1,455				2,036				—				1,455				2,036				3,491				180				2018		40.0
Burnsville, Minnesota	ENT054	—				(1)			2,962				—				17,164				2,962				17,164				20,126				6,265				2006		40.0
Eden Prairie, Minnesota	ENT055	2,668							1,496				2,117				(1		)		1,496				2,116				3,612				166				2018		40.0
Lakeville, Minnesota	ENT056	2,670							1,910				3,373				—				1,910				3,373				5,283				230				2018		40.0
Rochester, Minnesota	ENT057	—				(1)			2,437				8,715				2,098				2,437				10,813				13,250				4,410				2006		40.0
St. Peters, Missouri	ENT058	2,904							1,936				3,381				—				1,936				3,381				5,317				227				2018		40.0
Valley Park, Missouri	ENT059	1,366							803				1,408				—				803				1,408				2,211				92				2018		40.0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
Asbury Park, New Jersey	ENT060	—							750				10,670				678				750				11,348				12,098				516				2017		40.0
Fairlawn, New Jersey	ENT061	1,589							1,141				2,094				—				1,141				2,094				3,235				123				2018		40.0
Turnersville, New Jersey	ENT062	1,457							1,354				1,314				—				1,354				1,314				2,668				151				2018		40.0
Brooklyn, New York	ENT063	—							3,277				—				501				587				3,191				3,778				84				2013		40.0
N. Ridgeville, Ohio	ENT064	949							290				1,057				—				290				1,057				1,347				47				2018		40.0
Belle Vernon, Pennsylvania	ENT065	825							410				759				—				410				759				1,169				68				2018		40.0
Denton, Texas	ENT066	1,169							712				763				—				712				763				1,475				58				2018		40.0
Ft. Worth, Texas	ENT067	955							379				266				—				379				266				645				29				2018		40.0
Watauga, Texas	ENT068	2,125							1,073				2,274				—				1,073				2,274				3,347				144				2018		40.0
Lynnwood, Washington	ENT069	2,134							1,608				4,010				—				1,608				4,010				5,618				269				2018		40.0
Quincy, Washington	ENT070	—				(1)			1,500				6,500				—				1,500				6,500				8,000				3,058				2003		40.0
Subtotal		$	108,858						$	96,624			$	242,951			$	93,811			$	93,917			$	339,469			$	433,386			$	88,934
RETAIL:
Scottsdale, Arizona	RET001	—							2,657				2,666				248				2,657				2,914				5,571				673				2011		40.0
Colorado Springs, Colorado	RET002	—				(1)			2,631				279				5,195				2,607				5,498				8,105				1,721				2006		40.0
St. Augustine, Florida	RET003	—				(1)			3,950				—				10,285				3,908				10,327				14,235				3,413				2005		40.0
Honolulu, Hawaii	RET004	—							3,393				21,155				(7,507		)		3,393				13,648				17,041				4,207				2009		40.0
Chicago, Illinois	RET005	—							—				336				1,775				—				2,111				2,111				1,261				2010		40.0
Albuquerque, New Mexico	RET006	—				(1)			1,733				—				8,728				1,705				8,756				10,461				3,017				2005		40.0
Hamburg, New York	RET007	—				(1)			731				6,073				699				711				6,792				7,503				2,666				2005		40.0
Anthony, Texas	RET008	—				(1)			3,538				4,215				(187		)		3,514				4,052				7,566				1,393				2005		40.0
Draper, Utah	RET009	—				(1)			3,502				—				5,975				3,502				5,975				9,477				1,956				2005		40.0

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									Initial Cost to Company								Cost Capitalized Subsequent to Acquisition(2)				Gross Amount Carried at Close of Period
Location		Encumbrances							Land				Building and Improvements								Land				Building and Improvements				Total				Accumulated Depreciation				Date Acquired		Depreciable Life (Years)
Subtotal		$	—						$	22,135			$	34,724			$	25,211			$	21,997			$	60,073			$	82,070			$	20,307
HOTEL:
Honolulu, Hawaii	HOT001	—							17,996				17,996				(31,160		)		3,419				1,413				4,832				4,531				2009		40.0
Asbury Park, New Jersey	HOT002	—							297				18,299				3,850				297				22,149				22,446				614				2019		40.0
Asbury Park, New Jersey	HOT003	—							120				6,548				—				120				6,548				6,668				82				2019		40.0
Asbury Park, New Jersey	HOT004	—							3,815				40,194				3,632				3,815				43,826				47,641				6,472				2016		40.0
Subtotal		$	—						$	22,228			$	83,037			$	(23,678	)		$	7,651			$	73,936			$	81,587			$	11,699
APARTMENT/RESIDENTIAL:
Mammoth, California	APA001	—							10,078				40,312				(50,009		)		76				305				381				—				2007		0
Atlanta, Georgia	APA002	—							2,963				11,850				(7,200		)		1,523				6,090				7,613				—				2010		0
Jersey City, New Jersey	APA003	—							36,405				64,719				(100,769		)		127				228				355				—				2009		0
Subtotal		$	—						$	49,446			$	116,881			$	(157,978	)		$	1,726			$	6,623			$	8,349			$	—
MIXED USE:
Riverside, California	MXU001	—							5,869				629				2				5,869				631				6,500				577				2010		40.0
Subtotal		$	—						$	5,869			$	629			$	2			$	5,869			$	631			$	6,500			$	577
Total		$	720,034						$	845,666			$	1,411,121			$	107,626			$	913,809			$	1,450,604			$	2,364,413		(4)	$	247,998		(5)

_______________________________________________________________________________

(1)	Consists of properties pledged as collateral under the Company's secured credit facilities with a carrying value of $546.6 million.

(2)	Includes impairments and unit sales.

(3)	These properties have land improvements which have depreciable lives of 15 to 20 years.

(4)	The aggregate cost for Federal income tax purposes was approximately $2.70 billion at December 31, 2019.

(5)	Includes $9.6 million and $4.5 million relating to accumulated depreciation for land and development assets and real estate assets held for sale, respectively, as of December 31, 2019.

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The following table reconciles real estate from January 1, 2017 to December 31, 2019:

		2019				2018				2017
Balance at January 1		$	2,710,512			$	2,577,195			$	2,997,351
Improvements and additions		134,035				203,124				167,676
Acquisitions through foreclosure		—				4,600				—
Other acquisitions		231,436				762,207				5,164
Dispositions		(464,648		)		(656,900		)		(561,431		)
Other(1)		(236,545		)		—				—
Impairments		(10,377		)		(179,714		)		(31,565		)
Balance at December 31		$	2,364,413			$	2,710,512			$	2,577,195

_______________________________________________________________________________

(1)	Refer to Note 5.

The following table reconciles accumulated depreciation from January 1, 2017 to December 31, 2019:

		2019				2018				2017
Balance at January 1		$	(318,724	)		$	(366,265	)		$	(426,982	)
Additions		(45,615		)		(48,376		)		(44,270		)
Other(1)		44,200				—				—
Dispositions		72,141				95,917				104,987
Balance at December 31		$	(247,998	)		$	(318,724	)		$	(366,265	)

_______________________________________________________________________________

(1)	Refer to Note 5.

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Schedule IV—Mortgage Loans on Real Estate

As of December 31, 2019

($ in thousands)

Type of Loan/Borrower

Underlying Property Type

Contractual Interest Accrual Rates

Contractual Interest Payment Rates

Effective Maturity Dates

Periodic Payment Terms(1)

Prior Liens

Face Amount of Mortgages

Carrying Amount of Mortgages(2)(3)

Senior Mortgages:

Borrower A

Mixed Use/Mixed Collateral

LIBOR + 4.50%

LIBOR + 4.50%

July 2020

IO

$

—

$

97,366

$

97,443

Borrower B

Land

LIBOR + 6.0%

LIBOR + 6.0%

March 2021

IO

$

—

94,175

93,721

Borrower C

Mixed Use/Mixed Collateral

LIBOR +6.75%

LIBOR +6.75%

June 2021

IO

—

47,908

48,536

Borrower D

Office

Variable: LIBOR +4.00% to LIBOR +12.35%

Variable: LIBOR +4.00% to LIBOR +12.35%

August 2020

IO

—

52,056

52,493

Borrower E

Mixed Use/Mixed Collateral

LIBOR + 4.75%

LIBOR + 4.75%

July 2020

IO

—

49,682

49,539

Borrower F

Office

LIBOR + 5%

LIBOR + 5%

October 2020

IO

—

12,605

12,543

Borrower G

Apartment/Residential

LIBOR + 5.25%

LIBOR + 5.25%

June 2021

IO

—

46,592

46,308

Borrower H

Apartment/Residential

LIBOR + 6%

LIBOR +6%

April 2021

IO

—

38,912

38,614

Borrower I

Apartment/Residential

LIBOR +5.75%

LIBOR +5.75%

March 2021

IO

—

34,301

34,158

Borrower J

Hotel

LIBOR +4.50%

LIBOR +4.50%

February 2020

IO

—

35,656

35,640

Borrower K

Retail

LIBOR + 3.0%

LIBOR + 3.0%

July 2009

IO

—

56,341

16,119

Senior mortgages individually <3%

Apartment/Residential, Retail, Mixed Use/Mixed Collateral, Office, Hotel, Land, or Other

Fixed: 9.68% Variable: LIBOR + 5% to LIBOR + 5.25%

Fixed: 9.68% Variable: LIBOR + 5% to LIBOR + 5.25%

2020 to 2024

IO

—

25,884

25,769

591,478

550,883

Subordinate Mortgages:

Subordinate mortgages individually <3%

Hotel

Fixed: 6.8% to 14.0%

Fixed: 6.8% to 14%

2020 to 2057

IO

—

10,874

10,878

10,874

10,878

Total mortgages

$

602,352

$

561,761

_______________________________________________________________________________

(1)	IO = Interest only.

(2)	Amounts are presented net of asset-specific reserves of $21.7 million on impaired loans. Impairment is measured using the estimated fair value of collateral, less costs to sell.

(3)	The carrying amount of mortgages approximated the federal income tax basis.

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iStar Inc.

Schedule IV—Mortgage Loans on Real Estate (Continued)

As of December 31, 2019

($ in thousands)

Reconciliation of Mortgage Loans on Real Estate:

The following table reconciles Mortgage Loans on Real Estate from January 1, 2017 to December 31, 2019⁽¹⁾:

	2019				2018				2017
Balance at January 1	$	730,515			$	752,129			$	915,905
Additions:
New mortgage loans	11,667				381,133				265,966
Additions under existing mortgage loans	164,120				157,702				132,703
Other(2)	25,740				25,778				23,388
Deductions(3):
Collections of principal	(355,769		)		(501,466		)		(528,321		)
Recovery of (provision for) loan losses	(493		)		(45		)		28
Transfers to real estate and equity investments	(13,987		)		(84,684		)		(57,505		)
Amortization of premium	(32		)		(32		)		(35		)
Balance at December 31	$	561,761			$	730,515			$	752,129

______________________________________________________________

(1)	Balances represent the carrying value of loans, which are net of asset specific reserves.

(2)	Amount includes amortization of discount, deferred interest capitalized and mark-to-market adjustments resulting from changes in foreign exchange rates.

(3)	Amounts are presented net of charge-offs of $19.2 million and $1.2 million for the years ended December 31, 2019 and 2017, respectively.

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(a)	and (c) Financial statements and schedules—see Index to Financial Statements and Schedules included in Item 8.

(b)	Exhibits—see index on following page.

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