Note 8 - Other Investments

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Other Real Estate Investments and Other Assets [Text Block]

8.   Other Investments:

The Company has provided capital to owners and developers of real estate properties and loans through its Preferred Equity program. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its net investment. As of December 31, 2021, the Company’s net investment under the Preferred Equity program was $98.7 million relating to 39 properties, including 28 net leased properties which are accounted for as direct financing leases. For the year ended December 31, 2021, the Company earned $21.4 million from its preferred equity investments, including net profit participation of $8.6 million. As of December 31, 2020, the Company’s net investment under the Preferred Equity program was $98.2 million relating to 113 properties, including 103 net leased properties which are accounted for as direct financing leases. For the year ended December 31, 2020, the Company earned $28.4 million from its preferred equity investments, including net profit participation of $13.7 million.

During 2021, the Company invested $60.7 million in four new investments, including a preferred equity investment of $54.9 million in a property located in San Antonio, TX.

During 2020, the Company entered into a preferred equity investment of $10.0 million through a partnership, which provided a mezzanine financing loan that is encumbered by a property located in Queens, NY.

As of December 31, 2021, these preferred equity investment properties had non-recourse mortgage loans aggregating $237.4 million (excluding fair market value of debt adjustments aggregating $3.3 million). These loans have scheduled maturities ranging from two months to 2.5 years and bear interest at rates ranging from 4.19% to 8.88%. Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its invested capital.

Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions):

	December 31,
	2021		2020
Assets:
Real estate, net	$	317.3	$	95.7
Other assets		131.1		216.5
Total Assets	$	448.4	$	312.2
Liabilities and Partners’/Members’ Capital:
Mortgages payable, net	$	240.7	$	146.7
Other liabilities		15.9		4.5
Partners’/Members’ capital		191.8		161.0
Total Liabilities and Partners’/Members’ Capital	$	448.4	$	312.2

	Year Ended December 31,
	2021			2020			2019
Revenues	$	54.0		$	44.6		$	66.6
Operating expenses		(21.7	)		(11.1	)		(16.0	)
Depreciation and amortization		(2.9	)		(2.9	)		(3.2	)
Gain on sale of properties		-			0.2			13.6
Interest expense		(9.1	)		(7.0	)		(11.9	)
Other expense, net		0.5			(4.0	)		(7.9	)
Net income	$	19.8		$	19.8		$	41.2