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Real Estate Debt Investments
9 Months Ended
Sep. 30, 2021
Real Estate [Abstract]  
Real Estate Debt Investments Real Estate Debt Investments
The following table presents the Company’s one debt investment (dollars in thousands):
Principal Amount
Carrying Value(1)
Asset Type:
September 30, 2021 (Unaudited)
December 31, 2020
September 30, 2021 (Unaudited)
December 31, 2020
Effective Interest Rate(2)
Mezzanine loan$— $74,182 $— $55,864 14.0 %
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(1)As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated investment as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. As of December 31, 2020, the cumulative excess equity in losses included in the mezzanine loan carrying value were $18.3 million. During the nine months ended September 30, 2021, the Espresso joint venture recorded net gains on sub-portfolio sales, which generated equity in earnings for the Company. As a result, the cumulative excess equity in losses included in the mezzanine loan carrying value were reduced to zero prior to its payoff.
(2)Represents the effective interest rate through the date of the final repayment in August 2021.
During the nine months ended September 30, 2021, the Company received principal repayments on its debt investment totaling $74.4 million, which includes payment-in-kind interest. The debt investment was repaid in full in August 2021. The borrower funded principal repayments through net proceeds generated from the sale of underlying collateral and available operating cash flow.
For the nine months ended September 30, 2021, the mezzanine loan represented 100% of the Company’s interest income on debt investments as presented on the consolidated statements of operations.