Loans and Investments (Tables)
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9 Months Ended |
Sep. 30, 2022 |
Loans and Investments |
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Schedule of Structured Business loan and investment portfolio |
Our Structured Business loan and investment portfolio consists of ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Wtd. Avg. | | | | | | | | | | | | | | | | | Remaining | | Wtd. Avg. | | Wtd. Avg. | | | | | | Percent of | | Loan | | Wtd. Avg. | | Months to | | First Dollar | | Last Dollar | | | | September 30, 2022 | | Total | | Count | | Pay Rate (1) | | Maturity | | LTV Ratio (2) | | LTV Ratio (3) | | Bridge loans (4) | | $ | 14,618,526 | | 98 | % | 693 | | 6.90 | % | 21.9 | | 0 | % | 76 | % | Mezzanine loans | | | 187,388 | | 1 | % | 37 | | 7.86 | % | 60.0 | | 40 | % | 80 | % | Preferred equity investments | | | 147,615 | | 1 | % | 9 | | 5.51 | % | 32.4 | | 58 | % | 87 | % | Other loans (5) | | | 36,114 | | <1 | % | 3 | | 7.49 | % | 35.7 | | 0 | % | 58 | % | | | | 14,989,643 | | 100 | % | 742 | | 6.90 | % | 22.5 | | 1 | % | 76 | % | Allowance for credit losses | | | (122,296) | | | | | | | | | | | | | | Unearned revenue | | | (75,921) | | | | | | | | | | | | | | Loans and investments, net | | $ | 14,791,426 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | December 31, 2021 | | | | | | | | | | | | | | Bridge loans (4) | | $ | 11,750,710 | | 97 | % | 528 | | 4.19 | % | 23.8 | | 0 | % | 76 | % | Mezzanine loans | | | 223,378 | | 2 | % | 39 | | 7.32 | % | 56.3 | | 34 | % | 84 | % | Preferred equity investments | | | 155,513 | | 1 | % | 11 | | 5.57 | % | 38.0 | | 58 | % | 87 | % | Other loans (5) | | | 29,394 | | <1 | % | 2 | | 4.63 | % | 48.1 | | 0 | % | 67 | % | | | | 12,158,995 | | 100 | % | 580 | | 4.26 | % | 24.6 | | 1 | % | 76 | % | Allowance for credit losses | | | (113,241) | | | | | | | | | | | | | | Unearned revenue | | | (64,706) | | | | | | | | | | | | | | Loans and investments, net | | $ | 11,981,048 | | | | | | | | | | | | | |
(1) | “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “accrual rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table. |
(2) | The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position. |
(3) | The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss. |
(4) | At September 30, 2022 and December 31, 2021, bridge loans included 215 and 120, respectively, of SFR loans with a total gross loan commitment of $1.42 billion and $804.6 million, respectively, of which $825.8 million and $408.2 million, respectively, was funded. |
(5) | At September 30, 2022 and December 31, 2021, other loans included 3 and 2 variable rate SFR permanent loans , respectively. |
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Summary of the loan portfolio's internal risk ratings and LTV ratios by asset class |
A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at September 30, 2022 is as follows ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Wtd. Avg. | | Wtd. Avg. | | | | UPB by Origination Year | | | | | First Dollar | | Last Dollar | | Asset Class / Risk Rating | | 2022 | | 2021 | | 2020 | | 2019 | | 2018 | | Prior | | Total | | LTV Ratio | | LTV Ratio | | Multifamily: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | $ | 278,255 | | $ | 302,181 | | $ | 5,935 | | $ | 38,375 | | $ | — | | $ | 20,300 | | $ | 645,046 | | | | | | Pass/Watch | | | 3,208,311 | | | 4,006,812 | | | 599,665 | | | 279,891 | | | 41,650 | | | — | | | 8,136,329 | | | | | | Special Mention | | | 1,132,268 | | | 3,354,479 | | | 197,450 | | | 91,917 | | | 64,000 | | | 7,594 | | | 4,847,708 | | | | | | Substandard | | | — | | | 10,125 | | | 52,350 | | | 40,325 | | | — | | | — | | | 102,800 | | | | | | Total Multifamily | | $ | 4,618,834 | | $ | 7,673,597 | | $ | 855,400 | | $ | 450,508 | | $ | 105,650 | | $ | 27,894 | | $ | 13,731,883 | | 1 | % | 77 | % | Single-Family Rental: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 92 | % | | | | | Pass | | $ | 1,133 | | $ | 14,459 | | $ | 8,886 | | $ | — | | $ | — | | $ | — | | $ | 24,478 | | | | | | Pass/Watch | | | 341,478 | | | 325,308 | | | 121,458 | | | 20,270 | | | — | | | — | | | 808,514 | | | | | | Special Mention | | | — | | | 5,336 | | | 23,557 | | | — | | | — | | | — | | | 28,893 | | | | | | Total Single-Family Rental | | $ | 342,611 | | $ | 345,103 | | $ | 153,901 | | $ | 20,270 | | $ | — | | $ | — | | $ | 861,885 | | 0 | % | 63 | % | Land: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 6 | % | | | | | Special Mention | | $ | — | | $ | — | | $ | 8,100 | | $ | — | | $ | — | | $ | — | | $ | 8,100 | | | | | | Substandard | | | — | | | — | | | — | | | — | | | — | | | 127,928 | | | 127,928 | | | | | | Total Land | | $ | — | | $ | — | | $ | 8,100 | | $ | — | | $ | — | | $ | 127,928 | | $ | 136,028 | | 0 | % | 97 | % | Office: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 1 | % | | | | | Pass/Watch | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 44,015 | | $ | — | | $ | 44,015 | | | | | | Special Mention | | | — | | | — | | | 35,410 | | | — | | | — | | | — | | | 35,410 | | | | | | Total Office | | $ | — | | $ | — | | $ | 35,410 | | $ | — | | $ | 44,015 | | $ | — | | $ | 79,425 | | 0 | % | 87 | % | Healthcare: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 1 | % | | | | | Pass/Watch | | $ | — | | $ | — | | $ | — | | $ | 14,558 | | $ | — | | $ | — | | $ | 14,558 | | | | | | Special Mention | | | — | | | — | | | — | | | 51,069 | | | — | | | — | | | 51,069 | | | | | | Total Healthcare | | $ | — | | $ | — | | $ | — | | $ | 65,627 | | $ | — | | $ | — | | $ | 65,627 | | 0 | % | 77 | % | Student Housing: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | < 1 | % | | | | | Pass | | $ | — | | $ | 25,700 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 25,700 | | | | | | Substandard | | | — | | | — | | | 20,500 | | | — | | | — | | | — | | | 20,500 | | | | | | Total Student Housing | | $ | — | | $ | 25,700 | | $ | 20,500 | | $ | — | | $ | — | | $ | — | | $ | 46,200 | | 33 | % | 76 | % | Hotel: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | < 1 | % | | | | | Substandard | | $ | — | | $ | — | | $ | — | | $ | 40,850 | | $ | — | | $ | — | | $ | 40,850 | | | | | | Total Hotel | | $ | — | | $ | — | | $ | — | | $ | 40,850 | | $ | — | | $ | — | | $ | 40,850 | | 0 | % | 70 | % | Retail: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | < 1 | % | | | | | Pass | | $ | — | | $ | — | | $ | — | | $ | 4,000 | | $ | — | | $ | — | | $ | 4,000 | | | | | | Substandard | | | — | | | — | | | — | | | — | | | 18,600 | | | 3,445 | | | 22,045 | | | | | | Total Retail | | $ | — | | $ | — | | $ | — | | $ | 4,000 | | $ | 18,600 | | $ | 3,445 | | $ | 26,045 | | 12 | % | 71 | % | Other: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | < 1 | % | | | | | Doubtful | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,700 | | $ | 1,700 | | | | | | Total Other | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,700 | | $ | 1,700 | | 63 | % | 63 | % | | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | < 1 | % | | | | | Grand Total | | $ | 4,961,445 | | $ | 8,044,400 | | $ | 1,073,311 | | $ | 581,255 | | $ | 168,265 | | $ | 160,967 | | $ | 14,989,643 | | 1 | % | 76 | % |
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Summary of the changes in the allowance for credit losses |
A summary of the changes in the allowance for credit losses is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2022 | | | Land | | Multifamily | | Office | | Retail | | Student Housing | | Hotel | | Healthcare | | Other | | Total | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 77,918 | | $ | 27,958 | | $ | 7,031 | | $ | 5,819 | | $ | 161 | | $ | 16 | | $ | 3 | | $ | 2,425 | | $ | 121,331 | Provision for credit losses (net of recoveries) | | | (8) | | | (675) | | | 306 | | | — | | | 14 | | | 2 | | | 1 | | | 1,325 | | | 965 | Ending balance | | $ | 77,910 | | $ | 27,283 | | $ | 7,337 | | $ | 5,819 | | $ | 175 | | $ | 18 | | $ | 4 | | $ | 3,750 | | $ | 122,296 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2021 | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 78,057 | | $ | 30,160 | | $ | 7,822 | | $ | 13,819 | | $ | 2,365 | | $ | 225 | | $ | 3,866 | | $ | 2,133 | | $ | 138,447 | Provision for credit losses (net of recoveries) | | | (45) | | | (2,093) | | | (95) | | | — | | | (542) | | | (209) | | | (3,851) | | | (78) | | | (6,913) | Ending balance | | $ | 78,012 | | $ | 28,067 | | $ | 7,727 | | $ | 13,819 | | $ | 1,823 | | $ | 16 | | $ | 15 | | $ | 2,055 | | $ | 131,534 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2022 | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 77,970 | | $ | 18,707 | | $ | 8,073 | | $ | 5,819 | | $ | 636 | | $ | 8 | | $ | 8 | | $ | 2,020 | | $ | 113,241 | Provision for credit losses (net of recoveries) | | | (60) | | | 8,576 | | | (736) | | | — | | | (461) | | | 10 | | | (4) | | | 1,730 | | | 9,055 | Ending balance | | $ | 77,910 | | $ | 27,283 | | $ | 7,337 | | $ | 5,819 | | $ | 175 | | $ | 18 | | $ | 4 | | $ | 3,750 | | $ | 122,296 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2021 | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 78,150 | | $ | 36,468 | | $ | 1,846 | | $ | 13,861 | | $ | 4,078 | | $ | 7,759 | | $ | 3,880 | | $ | 2,287 | | $ | 148,329 | Provision for credit losses (net of recoveries) | | | (138) | | | (8,401) | | | 5,881 | | | (42) | | | (2,255) | | | (7,743) | | | (3,865) | | | (232) | | | (16,795) | Ending balance | | $ | 78,012 | | $ | 28,067 | | $ | 7,727 | | $ | 13,819 | | $ | 1,823 | | $ | 16 | | $ | 15 | | $ | 2,055 | | $ | 131,534 |
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Summary of our loans considered impaired by asset class |
A summary of our specific loans considered impaired by asset class is as follows (in thousands): | | | | | | | | | | | | | | | | | September 30, 2022 | | | | | | | | | | | | | Wtd. Avg. First | | Wtd. Avg. Last | | | | | | Carrying | | Allowance for | | Dollar LTV | | Dollar LTV | | Asset Class | | UPB (1) | | Value | | Credit Losses | | Ratio | | Ratio | | Land | | $ | 134,215 | | $ | 127,868 | | $ | 77,869 | | 0 | % | 99 | % | Retail | | | 22,045 | | | 17,563 | | | 5,817 | | 14 | % | 79 | % | Commercial | | | 1,700 | | | 1,700 | | | 1,700 | | 63 | % | 63 | % | Total | | $ | 157,960 | | $ | 147,131 | | $ | 85,386 | | 3 | % | 96 | % |
| | | | | | | | | | | | | | | | | December 31, 2021 | | Land | | $ | 134,215 | | $ | 127,868 | | $ | 77,869 | | 0 | % | 99 | % | Retail | | | 22,045 | | | 17,291 | | | 5,817 | | 14 | % | 77 | % | Office | | | 1,980 | | | 1,980 | | | 1,500 | | 0 | % | 51 | % | Commercial | | | 1,700 | | | 1,700 | | | 1,700 | | 63 | % | 63 | % | Total | | $ | 159,940 | | $ | 148,839 | | $ | 86,886 | | 3 | % | 95 | % |
(1) | Represents the UPB of seven and eight impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2022 and December 31, 2021, respectively. |
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Summary of our non-performing loans by asset class |
A summary of our non-performing loans by asset class is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | December 31, 2021 | | | | | | Less Than | | Greater Than | | | | | Less Than | | Greater Than | | | | | 90 Days | | 90 Days | | | | 90 Days | | 90 Days | | | UPB | | Past Due | | Past Due | | UPB | | Past Due | | Past Due | Student Housing | | $ | 20,500 | | $ | — | | $ | 20,500 | | $ | 21,500 | | $ | — | | $ | 21,500 | Retail | | | 3,445 | | | — | | | 3,445 | | | 920 | | | — | | | 920 | Commercial | | | 1,700 | | | — | | | 1,700 | | | 1,700 | | | — | | | 1,700 | Total | | $ | 25,645 | | $ | — | | $ | 25,645 | | $ | 24,120 | | $ | — | | $ | 24,120 |
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