|
(Mark One)
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2017
|
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Maryland
(State or other jurisdiction of
incorporation or organization)
|
|
95-6881527
(I.R.S. Employer
Identification Number)
|
1114 Avenue of the Americas, 39
th
Floor
|
|
|
New York, NY
(Address of principal executive offices)
|
|
10036
(Zip code)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
|
Page
|
|
||
|
||
|
|
|
|
||
|
||
|
||
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Operating lease income
|
$
|
47,002
|
|
|
$
|
49,975
|
|
|
$
|
94,349
|
|
|
$
|
100,470
|
|
Interest income
|
28,645
|
|
|
34,400
|
|
|
57,703
|
|
|
67,620
|
|
||||
Other income
|
139,510
|
|
|
10,096
|
|
|
151,374
|
|
|
21,636
|
|
||||
Land development revenue
|
132,710
|
|
|
27,888
|
|
|
152,760
|
|
|
42,835
|
|
||||
Total revenues
|
347,867
|
|
|
122,359
|
|
|
456,186
|
|
|
232,561
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
48,807
|
|
|
56,047
|
|
|
99,952
|
|
|
113,068
|
|
||||
Real estate expense
|
34,684
|
|
|
35,328
|
|
|
70,274
|
|
|
69,572
|
|
||||
Land development cost of sales
|
122,466
|
|
|
17,262
|
|
|
138,376
|
|
|
28,838
|
|
||||
Depreciation and amortization
|
13,171
|
|
|
13,673
|
|
|
25,451
|
|
|
27,581
|
|
||||
General and administrative
|
27,218
|
|
|
19,665
|
|
|
52,392
|
|
|
42,768
|
|
||||
(Recovery of) provision for loan losses
|
(600
|
)
|
|
700
|
|
|
(5,528
|
)
|
|
2,206
|
|
||||
Impairment of assets
|
10,284
|
|
|
3,012
|
|
|
14,696
|
|
|
3,012
|
|
||||
Other expense
|
16,276
|
|
|
3,182
|
|
|
18,145
|
|
|
3,922
|
|
||||
Total costs and expenses
|
272,306
|
|
|
148,869
|
|
|
413,758
|
|
|
290,967
|
|
||||
Income (loss) before earnings from equity method investments and other items
|
75,561
|
|
|
(26,510
|
)
|
|
42,428
|
|
|
(58,406
|
)
|
||||
Loss on early extinguishment of debt, net
|
(3,315
|
)
|
|
(1,457
|
)
|
|
(3,525
|
)
|
|
(1,582
|
)
|
||||
Earnings from equity method investments
|
5,515
|
|
|
39,447
|
|
|
11,217
|
|
|
47,714
|
|
||||
Income (loss) from continuing operations before income taxes
|
77,761
|
|
|
11,480
|
|
|
50,120
|
|
|
(12,274
|
)
|
||||
Income tax (expense) benefit
|
(1,644
|
)
|
|
1,190
|
|
|
(2,251
|
)
|
|
1,604
|
|
||||
Income (loss) from continuing operations
|
76,117
|
|
|
12,670
|
|
|
47,869
|
|
|
(10,670
|
)
|
||||
Income from discontinued operations
|
173
|
|
|
3,633
|
|
|
4,939
|
|
|
7,214
|
|
||||
Gain from discontinued operations
|
123,418
|
|
|
—
|
|
|
123,418
|
|
|
—
|
|
||||
Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
—
|
|
||||
Income from sales of real estate
(1)
|
844
|
|
|
43,484
|
|
|
8,954
|
|
|
53,943
|
|
||||
Net income
|
196,007
|
|
|
59,787
|
|
|
180,635
|
|
|
50,487
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(5,710
|
)
|
|
(8,825
|
)
|
|
(4,610
|
)
|
|
(7,883
|
)
|
||||
Net income attributable to iStar Inc.
|
190,297
|
|
|
50,962
|
|
|
176,025
|
|
|
42,604
|
|
||||
Preferred dividends
|
(12,830
|
)
|
|
(12,830
|
)
|
|
(25,660
|
)
|
|
(25,660
|
)
|
||||
Net (income) loss allocable to Participating Security holders
(2)
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Net income allocable to common shareholders
|
$
|
177,467
|
|
|
$
|
38,112
|
|
|
$
|
150,365
|
|
|
$
|
16,933
|
|
Per common share data:
|
|
|
|
|
|
|
|
||||||||
Income attributable to iStar Inc. from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.81
|
|
|
$
|
0.47
|
|
|
$
|
0.37
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.69
|
|
|
$
|
0.34
|
|
|
$
|
0.35
|
|
|
$
|
0.13
|
|
Net income attributable to iStar Inc.:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.46
|
|
|
$
|
0.52
|
|
|
$
|
2.09
|
|
|
$
|
0.22
|
|
Diluted
|
$
|
2.04
|
|
|
$
|
0.37
|
|
|
$
|
1.76
|
|
|
$
|
0.22
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
72,142
|
|
|
73,984
|
|
|
72,104
|
|
|
75,522
|
|
||||
Diluted
|
88,195
|
|
|
118,510
|
|
|
88,156
|
|
|
75,872
|
|
(1)
|
Income from sales of real estate represents gains from sales of real estate that do not qualify as discontinued operations.
|
(2)
|
Participating Security holders are non-employee directors who hold common stock equivalents ("CSEs") and restricted stock awards granted under the Company's Long Term Incentive Plans that are eligible to participate in dividends (refer to
Note 14
and
Note 15
).
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
196,007
|
|
|
$
|
59,787
|
|
|
$
|
180,635
|
|
|
$
|
50,487
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization
(1)
|
(313
|
)
|
|
118
|
|
|
(191
|
)
|
|
375
|
|
||||
Unrealized gains/(losses) on available-for-sale securities
|
583
|
|
|
446
|
|
|
566
|
|
|
465
|
|
||||
Unrealized gains/(losses) on cash flow hedges
|
(146
|
)
|
|
(357
|
)
|
|
394
|
|
|
(1,319
|
)
|
||||
Unrealized gains/(losses) on cumulative translation adjustment
|
172
|
|
|
30
|
|
|
(229
|
)
|
|
(10
|
)
|
||||
Other comprehensive income (loss)
|
296
|
|
|
237
|
|
|
540
|
|
|
(489
|
)
|
||||
Comprehensive income
|
196,303
|
|
|
60,024
|
|
|
181,175
|
|
|
49,998
|
|
||||
Comprehensive (income) loss attributable to noncontrolling interests
|
(5,710
|
)
|
|
(8,825
|
)
|
|
(4,610
|
)
|
|
(7,883
|
)
|
||||
Comprehensive income attributable to iStar Inc.
|
$
|
190,593
|
|
|
$
|
51,199
|
|
|
$
|
176,565
|
|
|
$
|
42,115
|
|
(1)
|
Reclassified to "Interest expense" in the Company's consolidated statements of operations are
$30
and
$60
for the
three and six months
ended
June 30, 2017
, respectively, and
$23
and
$183
for the
three and six months
ended
June 30, 2016
, respectively. Reclassified to "Earnings from equity method investments" in the Company's consolidated statements of operations are
$70
and
$164
for the
three and six months
ended
June 30, 2017
, respectively, and
$95
and
$192
for the
three and six months
ended
June 30, 2016
, respectively.
|
|
|
iStar Inc. Shareholders' Equity
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Preferred
Stock
(1)
|
|
Preferred Stock Series J
(1)
|
|
Common
Stock at
Par
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||
Balance as of December 31, 2016
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
72
|
|
|
$
|
3,602,172
|
|
|
$
|
(2,581,488
|
)
|
|
$
|
(4,218
|
)
|
|
$
|
43,120
|
|
|
$
|
1,059,684
|
|
Dividends declared—preferred
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,660
|
)
|
|
—
|
|
|
—
|
|
|
(25,660
|
)
|
||||||||
Issuance of stock/restricted stock unit amortization, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,699
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,699
|
|
||||||||
Net income for the period
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,025
|
|
|
—
|
|
|
5,946
|
|
|
181,971
|
|
||||||||
Change in accumulated other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540
|
|
|
—
|
|
|
540
|
|
||||||||
Change in additional paid in capital attributable to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,988
|
)
|
|
(12,988
|
)
|
||||||||
Balance as of June 30, 2017
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
72
|
|
|
$
|
3,603,981
|
|
|
$
|
(2,431,123
|
)
|
|
$
|
(3,678
|
)
|
|
$
|
36,078
|
|
|
$
|
1,205,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of December 31, 2015
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
81
|
|
|
$
|
3,689,330
|
|
|
$
|
(2,625,474
|
)
|
|
$
|
(4,851
|
)
|
|
$
|
42,218
|
|
|
$
|
1,101,330
|
|
Dividends declared—preferred
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,660
|
)
|
|
—
|
|
|
—
|
|
|
(25,660
|
)
|
||||||||
Issuance of stock/restricted stock unit amortization, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,371
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,371
|
|
||||||||
Net income for the period
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,604
|
|
|
—
|
|
|
10,520
|
|
|
53,124
|
|
||||||||
Change in accumulated other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(489
|
)
|
|
—
|
|
|
(489
|
)
|
||||||||
Repurchase of stock
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(91,826
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,835
|
)
|
||||||||
Change in additional paid in capital attributable to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
460
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
460
|
|
||||||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
444
|
|
|
444
|
|
||||||||
Change in noncontrolling interest
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,292
|
)
|
|
(7,292
|
)
|
||||||||
Balance as of June 30, 2016
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
72
|
|
|
$
|
3,599,335
|
|
|
$
|
(2,608,530
|
)
|
|
$
|
(5,340
|
)
|
|
$
|
45,890
|
|
|
$
|
1,031,453
|
|
(1)
|
Refer to
Note 13
for details on the Company's Preferred Stock.
|
(2)
|
For the
six months
ended
June 30, 2017
and
2016
, net income (loss) shown above excludes
$(1,336)
and
$(2,637)
of net loss attributable to redeemable noncontrolling interests.
|
(3)
|
Includes a payment to acquire a noncontrolling interest (refer to Note 5).
|
|
For the Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
180,635
|
|
|
$
|
50,487
|
|
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
||||
(Recovery of) provision for loan losses
|
(5,528
|
)
|
|
2,206
|
|
||
Impairment of assets
|
14,696
|
|
|
3,012
|
|
||
Depreciation and amortization
|
26,352
|
|
|
29,182
|
|
||
Non-cash expense for stock-based compensation
|
9,796
|
|
|
6,211
|
|
||
Amortization of discounts/premiums and deferred financing costs on debt obligations, net
|
6,615
|
|
|
8,901
|
|
||
Amortization of discounts/premiums on loans, net
|
(6,978
|
)
|
|
(7,237
|
)
|
||
Deferred interest on loans, net
|
(1,290
|
)
|
|
4,631
|
|
||
Gain from discontinued operations
|
(123,418
|
)
|
|
—
|
|
||
Earnings from equity method investments
|
(11,217
|
)
|
|
(47,714
|
)
|
||
Distributions from operations of other investments
|
35,502
|
|
|
31,479
|
|
||
Deferred operating lease income
|
(3,204
|
)
|
|
(4,993
|
)
|
||
Income from sales of real estate
|
(9,462
|
)
|
|
(53,943
|
)
|
||
Land development revenue in excess of cost of sales
|
(14,384
|
)
|
|
(13,997
|
)
|
||
Loss on early extinguishment of debt, net
|
775
|
|
|
1,582
|
|
||
Debt discount on repayments of debt obligations
|
(5,745
|
)
|
|
(5,369
|
)
|
||
Other operating activities, net
|
9,770
|
|
|
2,651
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Changes in accrued interest and operating lease income receivable, net
|
2,881
|
|
|
4,436
|
|
||
Changes in deferred expenses and other assets, net
|
(6,821
|
)
|
|
1,677
|
|
||
Changes in accounts payable, accrued expenses and other liabilities
|
3,941
|
|
|
(13,052
|
)
|
||
Cash flows provided by operating activities
|
102,916
|
|
|
150
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Originations and fundings of loans receivable, net
|
(130,701
|
)
|
|
(158,262
|
)
|
||
Capital expenditures on real estate assets
|
(16,346
|
)
|
|
(35,674
|
)
|
||
Capital expenditures on land and development assets
|
(53,894
|
)
|
|
(58,961
|
)
|
||
Acquisitions of real estate assets
|
—
|
|
|
(3,915
|
)
|
||
Repayments of and principal collections on loans receivable and other lending investments, net
|
367,028
|
|
|
202,014
|
|
||
Net proceeds from sales of real estate
|
154,291
|
|
|
247,956
|
|
||
Net proceeds from sales of land and development assets
|
146,713
|
|
|
33,660
|
|
||
Net proceeds from sales of other investments
|
—
|
|
|
39,810
|
|
||
Distributions from other investments
|
11,275
|
|
|
8,632
|
|
||
Contributions to other investments
|
(139,139
|
)
|
|
(8,283
|
)
|
||
Changes in restricted cash held in connection with investing activities
|
1,757
|
|
|
3,220
|
|
||
Other investing activities, net
|
5,317
|
|
|
(5,677
|
)
|
||
Cash flows provided by investing activities
|
346,301
|
|
|
264,520
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings from debt obligations
|
854,637
|
|
|
646,401
|
|
||
Repayments and repurchases of debt obligations
|
(626,492
|
)
|
|
(991,184
|
)
|
||
Proceeds from loan participations payable
|
—
|
|
|
22,844
|
|
||
Preferred dividends paid
|
(25,660
|
)
|
|
(25,660
|
)
|
||
Repurchase of stock
|
—
|
|
|
(90,481
|
)
|
||
Payments for deferred financing costs
|
(12,243
|
)
|
|
(8,003
|
)
|
||
Payments for withholding taxes upon vesting of stock-based compensation
|
(511
|
)
|
|
(1,203
|
)
|
||
Other financing activities, net
|
(13,420
|
)
|
|
(7,144
|
)
|
||
Cash flows provided by (used in) financing activities
|
176,311
|
|
|
(454,430
|
)
|
||
Effect of exchange rate changes on cash
|
7
|
|
|
22
|
|
||
Changes in cash and cash equivalents
|
625,535
|
|
|
(189,738
|
)
|
||
Cash and cash equivalents at beginning of period
|
328,744
|
|
|
711,101
|
|
||
Cash and cash equivalents at end of period
|
$
|
954,279
|
|
|
$
|
521,363
|
|
Supplemental disclosure of non-cash investing and financing activity:
|
|
|
|
||||
Fundings and repayments of loan receivables and loan participations, net
|
$
|
(52,406
|
)
|
|
$
|
12,267
|
|
Accounts payable for capital expenditures on land and development assets
|
2,984
|
|
|
5,575
|
|
||
Accounts payable for capital expenditures on real estate assets
|
1,488
|
|
|
—
|
|
||
Receivable from sales of real estate and land parcels
|
3,139
|
|
|
1,741
|
|
||
Developer fee payable
|
—
|
|
|
6,438
|
|
||
Accruals for repurchase of stock
|
—
|
|
|
2,260
|
|
|
Net Lease
(1)
|
|
Operating
Properties
|
|
Total
|
||||||
As of June 30, 2017
|
|
|
|
|
|
||||||
Land, at cost
|
$
|
227,231
|
|
|
$
|
211,057
|
|
|
$
|
438,288
|
|
Buildings and improvements, at cost
|
950,548
|
|
|
322,079
|
|
|
1,272,627
|
|
|||
Less: accumulated depreciation
|
(314,373
|
)
|
|
(53,560
|
)
|
|
(367,933
|
)
|
|||
Real estate, net
|
863,406
|
|
|
479,576
|
|
|
1,342,982
|
|
|||
Real estate available and held for sale
(2)
|
924
|
|
|
67,121
|
|
|
68,045
|
|
|||
Total real estate
|
$
|
864,330
|
|
|
$
|
546,697
|
|
|
$
|
1,411,027
|
|
As of December 31, 2016
|
|
|
|
|
|
||||||
Land, at cost
|
$
|
231,506
|
|
|
$
|
211,054
|
|
|
$
|
442,560
|
|
Buildings and improvements, at cost
|
987,050
|
|
|
311,283
|
|
|
1,298,333
|
|
|||
Less: accumulated depreciation
|
(307,444
|
)
|
|
(46,175
|
)
|
|
(353,619
|
)
|
|||
Real estate, net
|
911,112
|
|
|
476,162
|
|
|
1,387,274
|
|
|||
Real estate available and held for sale
(2)
|
155,051
|
|
|
82,480
|
|
|
237,531
|
|
|||
Total real estate
|
$
|
1,066,163
|
|
|
$
|
558,642
|
|
|
$
|
1,624,805
|
|
(1)
|
In 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the "Net Lease Venture") and gave a right of first refusal to the Net Lease Venture on all new net lease investments (refer to Note 7 for more information on the Net Lease Venture). The Company is responsible for sourcing new opportunities and managing the Net Lease Venture and its assets in exchange for a promote and management fee.
|
(2)
|
As of
December 31, 2016
, net lease includes the Company's ground lease ("GL") assets that were reclassified to "Real estate available and held for sale" (refer to "Dispositions" below). As of
December 31, 2016
, the carrying value of the Company's GL assets were previously classified as
$104.5 million
in "Real estate, net,"
$37.5 million
in "Deferred expenses and other assets, net,"
$8.2 million
in "Deferred operating lease income receivable, net" and
$3.5 million
in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheet. As of
June 30, 2017
and
December 31, 2016
, the Company had
$67.1 million
and
$82.5 million
, respectively, of residential properties available for sale in its operating properties portfolio.
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
|
$
|
678
|
|
|
$
|
4,543
|
|
|
$
|
6,430
|
|
|
$
|
8,986
|
|
Expenses
|
|
(505
|
)
|
|
(910
|
)
|
|
(1,491
|
)
|
|
(1,772
|
)
|
||||
Income from discontinued operations
|
|
$
|
173
|
|
|
$
|
3,633
|
|
|
$
|
4,939
|
|
|
$
|
7,214
|
|
(1)
|
The transactions closed on April 14, 2017 and revenues, expenses and income from discontinued operations excludes the period from April 14, 2017 to June 30, 2017. Revenues primarily consisted of operating lease income and expenses primarily consisted of depreciation and amortization and real estate expense.
|
(2)
|
For the six months ended June 30, 2017, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was
$5.7 million
and
$0.5 million
, respectively. For the six months ended June 30, 2016, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was
$9.4 million
and
$4.6 million
, respectively.
|
|
As of
|
||||||
|
June 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Land and land development, at cost
|
$
|
862,774
|
|
|
$
|
952,051
|
|
Less: accumulated depreciation
|
(7,277
|
)
|
|
(6,486
|
)
|
||
Total land and development, net
|
$
|
855,497
|
|
|
$
|
945,565
|
|
|
As of
|
||||||
Type of Investment
|
June 30,
2017 |
|
December 31,
2016 |
||||
Senior mortgages
|
$
|
597,335
|
|
|
$
|
940,738
|
|
Corporate/Partnership loans
|
543,589
|
|
|
490,389
|
|
||
Subordinate mortgages
|
22,841
|
|
|
24,941
|
|
||
Total gross carrying value of loans
|
1,163,765
|
|
|
1,456,068
|
|
||
Reserves for loan losses
|
(78,789
|
)
|
|
(85,545
|
)
|
||
Total loans receivable, net
|
1,084,976
|
|
|
1,370,523
|
|
||
Other lending investments—securities
|
85,589
|
|
|
79,916
|
|
||
Total loans receivable and other lending investments, net
|
$
|
1,170,565
|
|
|
$
|
1,450,439
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Reserve for loan losses at beginning of period
|
|
$
|
79,389
|
|
|
$
|
109,671
|
|
|
$
|
85,545
|
|
|
$
|
108,165
|
|
(Recovery of) provision for loan losses
|
|
(600
|
)
|
|
700
|
|
|
(5,528
|
)
|
|
2,206
|
|
||||
Charge-offs
|
|
—
|
|
|
—
|
|
|
(1,228
|
)
|
|
—
|
|
||||
Reserve for loan losses at end of period
|
|
$
|
78,789
|
|
|
$
|
110,371
|
|
|
$
|
78,789
|
|
|
$
|
110,371
|
|
|
Individually
Evaluated for
Impairment
(1)
|
|
Collectively
Evaluated for
Impairment
(2)
|
|
Total
|
||||||
As of June 30, 2017
|
|
|
|
|
|
||||||
Loans
|
$
|
249,659
|
|
|
$
|
919,793
|
|
|
$
|
1,169,452
|
|
Less: Reserve for loan losses
|
(60,989
|
)
|
|
(17,800
|
)
|
|
(78,789
|
)
|
|||
Total
(3)
|
$
|
188,670
|
|
|
$
|
901,993
|
|
|
$
|
1,090,663
|
|
As of December 31, 2016
|
|
|
|
|
|
||||||
Loans
|
$
|
253,941
|
|
|
$
|
1,209,062
|
|
|
$
|
1,463,003
|
|
Less: Reserve for loan losses
|
(62,245
|
)
|
|
(23,300
|
)
|
|
(85,545
|
)
|
|||
Total
(3)
|
$
|
191,696
|
|
|
$
|
1,185,762
|
|
|
$
|
1,377,458
|
|
(1)
|
The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of
$0.7 million
and
$0.4 million
as of
June 30, 2017
and
December 31, 2016
, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and 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 premiums of
$4.5 million
and
$1.9 million
as of
June 30, 2017
and
December 31, 2016
, respectively.
|
(3)
|
The Company's recorded investment in loans as of
June 30, 2017
and
December 31, 2016
includes accrued interest of
$5.7 million
and
$6.9 million
, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of
June 30, 2017
and
December 31, 2016
, the total excludes
$85.6 million
and
$79.9 million
, respectively, of securities that are evaluated for impairment under ASC 320.
|
|
As of June 30, 2017
|
|
As of December 31, 2016
|
||||||||||
|
Performing
Loans
|
|
Weighted
Average
Risk Ratings
|
|
Performing
Loans
|
|
Weighted
Average
Risk Ratings
|
||||||
Senior mortgages
|
$
|
518,362
|
|
|
2.53
|
|
|
$
|
859,250
|
|
|
3.12
|
|
Corporate/Partnership loans
|
389,550
|
|
|
3.03
|
|
|
335,677
|
|
|
3.09
|
|
||
Subordinate mortgages
|
11,881
|
|
|
2.55
|
|
|
14,135
|
|
|
3.00
|
|
||
Total
|
$
|
919,793
|
|
|
2.74
|
|
|
$
|
1,209,062
|
|
|
3.11
|
|
|
Current
|
|
Less Than
and Equal
to 90 Days
|
|
Greater
Than
90 Days
(1)
|
|
Total
Past Due
|
|
Total
|
||||||||||
As of June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior mortgages
|
$
|
524,362
|
|
|
$
|
—
|
|
|
$
|
76,282
|
|
|
$
|
76,282
|
|
|
$
|
600,644
|
|
Corporate/Partnership loans
|
389,550
|
|
|
—
|
|
|
156,375
|
|
|
156,375
|
|
|
545,925
|
|
|||||
Subordinate mortgages
|
22,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,883
|
|
|||||
Total
|
$
|
936,795
|
|
|
$
|
—
|
|
|
$
|
232,657
|
|
|
$
|
232,657
|
|
|
$
|
1,169,452
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior mortgages
|
$
|
868,505
|
|
|
$
|
—
|
|
|
$
|
76,677
|
|
|
$
|
76,677
|
|
|
$
|
945,182
|
|
Corporate/Partnership loans
|
335,677
|
|
|
—
|
|
|
157,146
|
|
|
157,146
|
|
|
492,823
|
|
|||||
Subordinate mortgages
|
24,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,998
|
|
|||||
Total
|
$
|
1,229,180
|
|
|
$
|
—
|
|
|
$
|
233,823
|
|
|
$
|
233,823
|
|
|
$
|
1,463,003
|
|
(1)
|
As of
June 30, 2017
, the Company had
four
loans which were greater than
90 days
delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from
1.0
to
8.0 years
outstanding. As of December 31, 2016, the Company had
four
loans which were greater than
90 days
delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from
1.0
to
8.0 years
outstanding.
|
|
As of June 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subordinate mortgages
|
$
|
11,002
|
|
|
$
|
10,985
|
|
|
$
|
—
|
|
|
$
|
10,862
|
|
|
$
|
10,846
|
|
|
$
|
—
|
|
Subtotal
|
11,002
|
|
|
10,985
|
|
|
—
|
|
|
10,862
|
|
|
10,846
|
|
|
—
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior mortgages
|
82,282
|
|
|
82,390
|
|
|
(48,518
|
)
|
|
85,933
|
|
|
85,780
|
|
|
(49,774
|
)
|
||||||
Corporate/Partnership loans
|
156,375
|
|
|
145,849
|
|
|
(12,471
|
)
|
|
157,146
|
|
|
146,783
|
|
|
(12,471
|
)
|
||||||
Subtotal
|
238,657
|
|
|
228,239
|
|
|
(60,989
|
)
|
|
243,079
|
|
|
232,563
|
|
|
(62,245
|
)
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior mortgages
|
82,282
|
|
|
82,390
|
|
|
(48,518
|
)
|
|
85,933
|
|
|
85,780
|
|
|
(49,774
|
)
|
||||||
Corporate/Partnership loans
|
156,375
|
|
|
145,849
|
|
|
(12,471
|
)
|
|
157,146
|
|
|
146,783
|
|
|
(12,471
|
)
|
||||||
Subordinate mortgages
|
11,002
|
|
|
10,985
|
|
|
—
|
|
|
10,862
|
|
|
10,846
|
|
|
—
|
|
||||||
Total
|
$
|
249,659
|
|
|
$
|
239,224
|
|
|
$
|
(60,989
|
)
|
|
$
|
253,941
|
|
|
$
|
243,409
|
|
|
$
|
(62,245
|
)
|
(1)
|
All of the Company's non-accrual loans are considered impaired and included in the table above.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior mortgages
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,150
|
|
|
$
|
111
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,100
|
|
|
$
|
111
|
|
Subordinate mortgages
|
11,023
|
|
|
—
|
|
|
5,785
|
|
|
—
|
|
|
10,970
|
|
|
—
|
|
|
3,857
|
|
|
—
|
|
||||||||
Subtotal
|
11,023
|
|
|
—
|
|
|
14,935
|
|
|
111
|
|
|
10,970
|
|
|
—
|
|
|
9,957
|
|
|
111
|
|
||||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior mortgages
|
82,368
|
|
|
—
|
|
|
126,978
|
|
|
—
|
|
|
83,556
|
|
|
—
|
|
|
126,903
|
|
|
—
|
|
||||||||
Corporate/Partnership loans
|
156,839
|
|
|
—
|
|
|
5,224
|
|
|
—
|
|
|
156,941
|
|
|
—
|
|
|
5,396
|
|
|
—
|
|
||||||||
Subtotal
|
239,207
|
|
|
—
|
|
|
132,202
|
|
|
—
|
|
|
240,497
|
|
|
—
|
|
|
132,299
|
|
|
—
|
|
||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior mortgages
|
82,368
|
|
|
—
|
|
|
136,128
|
|
|
111
|
|
|
83,556
|
|
|
—
|
|
|
133,003
|
|
|
111
|
|
||||||||
Corporate/Partnership loans
|
156,839
|
|
|
—
|
|
|
5,224
|
|
|
—
|
|
|
156,941
|
|
|
—
|
|
|
5,396
|
|
|
—
|
|
||||||||
Subordinate mortgages
|
11,023
|
|
|
—
|
|
|
5,785
|
|
|
—
|
|
|
10,970
|
|
|
—
|
|
|
3,857
|
|
|
—
|
|
||||||||
Total
|
$
|
250,230
|
|
|
$
|
—
|
|
|
$
|
147,137
|
|
|
$
|
111
|
|
|
$
|
251,467
|
|
|
$
|
—
|
|
|
$
|
142,256
|
|
|
$
|
111
|
|
|
Face
Value
|
|
Amortized Cost Basis
|
|
Net Unrealized Gain (Loss)
|
|
Estimated Fair Value
|
|
Net Carrying Value
|
||||||||||
As of June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Municipal debt securities
|
$
|
21,230
|
|
|
$
|
21,230
|
|
|
$
|
992
|
|
|
$
|
22,222
|
|
|
$
|
22,222
|
|
Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities
|
63,418
|
|
|
63,367
|
|
|
1,544
|
|
|
64,911
|
|
|
63,367
|
|
|||||
Total
|
$
|
84,648
|
|
|
$
|
84,597
|
|
|
$
|
2,536
|
|
|
$
|
87,133
|
|
|
$
|
85,589
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Municipal debt securities
|
$
|
21,240
|
|
|
$
|
21,240
|
|
|
$
|
426
|
|
|
$
|
21,666
|
|
|
$
|
21,666
|
|
Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities
|
58,454
|
|
|
58,250
|
|
|
2,753
|
|
|
61,003
|
|
|
58,250
|
|
|||||
Total
|
$
|
79,694
|
|
|
$
|
79,490
|
|
|
$
|
3,179
|
|
|
$
|
82,669
|
|
|
$
|
79,916
|
|
|
|
|
Equity in Earnings
|
||||||||||||||||||||
|
Carrying Value as of
|
|
For the Three Months Ended June 30,
|
|
For the Six Months
Ended June 30, |
||||||||||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Real estate equity investments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
iStar Net Lease I LLC ("Net Lease Venture")
|
$
|
128,997
|
|
|
$
|
92,669
|
|
|
$
|
1,032
|
|
|
$
|
944
|
|
|
$
|
2,013
|
|
|
$
|
1,890
|
|
Safety, Income and Growth, Inc. ("SAFE")
(1)
|
50,287
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|
—
|
|
||||||
Marina Palms, LLC ("Marina Palms")
|
7,191
|
|
|
35,185
|
|
|
1,183
|
|
|
5,180
|
|
|
4,300
|
|
|
13,401
|
|
||||||
Other real estate equity investments
(2)
|
63,107
|
|
|
53,202
|
|
|
2,892
|
|
|
28,600
|
|
|
4,249
|
|
|
26,898
|
|
||||||
Subtotal
|
249,582
|
|
|
181,056
|
|
|
5,155
|
|
|
34,724
|
|
|
10,610
|
|
|
42,189
|
|
||||||
Other strategic investments
(3)
|
27,239
|
|
|
33,350
|
|
|
360
|
|
|
4,723
|
|
|
607
|
|
|
5,525
|
|
||||||
Total
|
$
|
276,821
|
|
|
$
|
214,406
|
|
|
$
|
5,515
|
|
|
$
|
39,447
|
|
|
$
|
11,217
|
|
|
$
|
47,714
|
|
(1)
|
Equity in earnings is for the period from April 14, 2017 to June 30, 2017.
|
(2)
|
In June 2016, a majority-owned consolidated subsidiary of the Company sold its interest in a real estate equity method investment for net proceeds of
$39.8 million
and recognized a gain of
$31.5 million
, of which
$10.1 million
of the gain was attributable to the noncontrolling interest.
|
(3)
|
In conjunction with the sale of the Company's interests in Oak Hill Advisors, L.P. in 2011, the Company retained a share of the carried interest related to various funds. During the
three and six months
ended June 30, 2016, the Company recognized
$0.5 million
and
$3.7 million
, respectively, of carried interest income.
|
|
Revenues
|
|
Expenses
|
|
Net Income Attributable to Parent Entities
|
||||||
For the Six Months Ended June 30, 2017
|
|
|
|
|
|
||||||
Marina Palms
|
$
|
31,847
|
|
|
$
|
(19,771
|
)
|
|
$
|
12,076
|
|
|
|
|
|
|
|
||||||
For the Six Months Ended June 30, 2016
|
|
|
|
|
|
||||||
Marina Palms
|
$
|
87,494
|
|
|
$
|
(47,764
|
)
|
|
$
|
39,730
|
|
|
As of
|
||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Intangible assets, net
(1)
|
$
|
20,452
|
|
|
$
|
30,727
|
|
Other receivables
(2)
|
56,851
|
|
|
52,820
|
|
||
Other assets
|
29,449
|
|
|
34,351
|
|
||
Restricted cash
|
23,380
|
|
|
25,883
|
|
||
Leasing costs, net
(3)
|
11,367
|
|
|
11,802
|
|
||
Corporate furniture, fixtures and equipment, net
(4)
|
5,133
|
|
|
5,691
|
|
||
Deferred financing fees, net
|
489
|
|
|
838
|
|
||
Deferred expenses and other assets, net
|
$
|
147,121
|
|
|
$
|
162,112
|
|
(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
$33.5 million
and
$31.9 million
as of
June 30, 2017
and
December 31, 2016
, respectively. The amortization of above market leases and lease incentive assets decreased operating lease income in the Company's consolidated statements of operations by
$0.8 million
and
$1.6 million
for the
three and six months
ended
June 30, 2017
, respectively, and
$1.1 million
and
$2.2 million
for the
three and six months
ended
June 30, 2016
, respectively. These intangible lease assets are amortized over the term of the lease. The amortization expense for in-place leases was
$0.7 million
and
$1.2 million
for the
three and six months
ended
June 30, 2017
, respectively, and
$0.6 million
and
$1.1 million
for the
three and six months
ended
June 30, 2016
, respectively. These amounts are included in "Depreciation and amortization" in the Company's consolidated statements of operations.
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, included
$26.0 million
of receivables related to the construction and development of an amphitheater.
|
(3)
|
Accumulated amortization of leasing costs was
$7.0 million
and
$6.7 million
as of
June 30, 2017
and
December 31, 2016
, respectively.
|
(4)
|
Accumulated depreciation on corporate furniture, fixtures and equipment was
$9.8 million
and
$9.0 million
as of
June 30, 2017
and
December 31, 2016
, respectively.
|
|
As of
|
||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Other liabilities
(1)
|
$
|
81,526
|
|
|
$
|
75,993
|
|
Accrued expenses
(2)
|
84,174
|
|
|
72,693
|
|
||
Accrued interest payable
|
56,716
|
|
|
54,033
|
|
||
Intangible liabilities, net
(3)
|
7,843
|
|
|
8,851
|
|
||
Accounts payable, accrued expenses and other liabilities
|
$
|
230,259
|
|
|
$
|
211,570
|
|
(1)
|
As of
June 30, 2017
and
December 31, 2016
, other liabilities includes
$24.0 million
related to profit sharing arrangements with developers for certain properties sold. As of
June 30, 2017
and
December 31, 2016
, includes
$1.5 million
and
$1.2 million
, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets. As of
June 30, 2017
and
December 31, 2016
, other liabilities also includes
$7.3 million
and
$8.5 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.
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, accrued expenses includes
$2.5 million
and
$1.7 million
, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets.
|
(3)
|
Intangible liabilities, net includes below market lease liabilities related to the acquisition of real estate assets. Accumulated amortization on below market lease liabilities was
$7.5 million
and
$6.4 million
as of
June 30, 2017
and
December 31, 2016
, respectively. The amortization of below market leases increased operating lease income in the Company's consolidated statements of operations by
$0.8 million
and
$1.0 million
for the
three and six months
ended
June 30, 2017
, respectively, and
$0.3 million
and
$0.6 million
for the
three and six months
ended
June 30, 2016
, respectively.
|
|
As of
|
||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets (liabilities)
|
$
|
82,219
|
|
|
$
|
66,498
|
|
Valuation allowance
|
(82,219
|
)
|
|
(66,498
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Carrying Value as of
|
||||||
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Loan participations payable
(1)
|
|
$
|
107,844
|
|
|
$
|
160,251
|
|
Debt discounts and deferred financing costs, net
|
|
(402
|
)
|
|
(930
|
)
|
||
Total loan participations payable, net
|
|
$
|
107,442
|
|
|
$
|
159,321
|
|
(1)
|
As of
June 30, 2017
, the Company had
two
loan participations payable with a weighted average interest rate of
6.2%
. As of December 31, 2016, the Company had
three
loan participations payable with a weighted average interest rate of
4.8%
.
|
|
Carrying Value as of
|
|
Stated
Interest Rates |
|
Scheduled
Maturity Date |
|||||||
|
June 30, 2017
|
|
December 31, 2016
|
|
|
|||||||
Secured credit facilities and mortgages:
|
|
|
|
|
|
|
|
|||||
2015 $250 Million Secured Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
LIBOR + 2.75%
|
|
(1)
|
March 2018
|
2016 Senior Secured Credit Facility
|
498,750
|
|
|
498,648
|
|
|
LIBOR + 3.75%
|
|
(2)
|
July 2020
|
||
Mortgages collateralized by net lease assets
|
225,624
|
|
|
249,987
|
|
|
4.851% - 7.26%
|
|
(3)
|
Various through 2032
|
||
Total secured credit facilities and mortgages
|
724,374
|
|
|
748,635
|
|
|
|
|
|
|
||
Unsecured notes:
|
|
|
|
|
|
|
|
|||||
5.85% senior notes
|
—
|
|
|
99,722
|
|
|
5.85
|
%
|
|
March 2017
|
||
9.00% senior notes
|
—
|
|
|
275,000
|
|
|
9.00
|
%
|
|
June 2017
|
||
4.00% senior notes
(4)
|
550,000
|
|
|
550,000
|
|
|
4.00
|
%
|
|
November 2017
|
||
7.125% senior notes
|
300,000
|
|
|
300,000
|
|
|
7.125
|
%
|
|
February 2018
|
||
4.875% senior notes
(5)
|
300,000
|
|
|
300,000
|
|
|
4.875
|
%
|
|
July 2018
|
||
5.00% senior notes
(6)
|
770,000
|
|
|
770,000
|
|
|
5.00
|
%
|
|
July 2019
|
||
6.50% senior notes
(7)
|
275,000
|
|
|
275,000
|
|
|
6.50
|
%
|
|
July 2021
|
||
6.00% senior notes
(8)
|
375,000
|
|
|
—
|
|
|
6.00
|
%
|
|
April 2022
|
||
Total unsecured notes
|
2,570,000
|
|
|
2,569,722
|
|
|
|
|
|
|
||
Other debt obligations:
|
|
|
|
|
|
|
|
|||||
Trust preferred securities
|
100,000
|
|
|
100,000
|
|
|
LIBOR + 1.50%
|
|
|
October 2035
|
||
Total debt obligations
|
3,394,374
|
|
|
3,418,357
|
|
|
|
|
|
|
||
Debt discounts and deferred financing costs, net
|
(26,261
|
)
|
|
(28,449
|
)
|
|
|
|
|
|
||
Total debt obligations, net
(9)
|
$
|
3,368,113
|
|
|
$
|
3,389,908
|
|
|
|
|
|
|
(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
0.5%
or (c) LIBOR plus
1.0%
and subject to a margin ranging from
1.25%
to
1.75%
, or (ii) LIBOR subject to a margin ranging from
2.25%
to
2.75%
. At maturity, the Company may convert outstanding borrowings to a
one year
term loan which matures in quarterly installments through March 2019.
|
(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
0.5%
or (c) LIBOR plus
1.0%
and subject to a margin of
2.75%
or (ii) LIBOR subject to a margin of
3.75%
with a minimum LIBOR rate of
1.0%
.
|
(3)
|
As of
June 30, 2017
and
December 31, 2016
, includes a loan with a floating rate of LIBOR plus
2.0%
. As of
June 30, 2017
, the weighted average interest rate of these loans is
5.2%
.
|
(4)
|
The Company can prepay these senior notes without penalty beginning August 1, 2017.
|
(5)
|
The Company can prepay these senior notes without penalty beginning January 1, 2018.
|
(6)
|
The Company can prepay these senior notes without penalty beginning July 1, 2018.
|
(7)
|
The Company can prepay these senior notes without penalty beginning July 1, 2020.
|
(8)
|
The Company can prepay these senior notes without penalty beginning April 1, 2021.
|
(9)
|
The Company capitalized interest relating to development activities of
$2.0 million
and
$4.0 million
during the
three and six months
ended
June 30, 2017
, respectively, and
$1.4 million
and
$2.8 million
during the
three and six months
ended
June 30, 2016
, respectively.
|
|
Unsecured Debt
|
|
Secured Debt
|
|
Total
|
||||||
2017 (remaining six months)
|
$
|
550,000
|
|
|
$
|
—
|
|
|
$
|
550,000
|
|
2018
|
600,000
|
|
|
10,091
|
|
|
610,091
|
|
|||
2019
|
770,000
|
|
|
28,350
|
|
|
798,350
|
|
|||
2020
|
—
|
|
|
498,750
|
|
|
498,750
|
|
|||
2021
|
275,000
|
|
|
118,287
|
|
|
393,287
|
|
|||
Thereafter
|
475,000
|
|
|
68,896
|
|
|
543,896
|
|
|||
Total principal maturities
|
2,670,000
|
|
|
724,374
|
|
|
3,394,374
|
|
|||
Unamortized discounts and deferred financing costs, net
|
(18,419
|
)
|
|
(7,842
|
)
|
|
(26,261
|
)
|
|||
Total debt obligations, net
|
$
|
2,651,581
|
|
|
$
|
716,532
|
|
|
$
|
3,368,113
|
|
(1)
|
The Company has
$550.0 million
of debt obligations maturing during the remainder of 2017, and
$610.0 million
of other debt obligations maturing before the end of August 2018, as listed in the debt obligations table above. The Company's plans to satisfy these obligations primarily consist of using cash on hand and accessing the debt and/or equity markets to obtain capital to satisfy the maturing obligations. In addition, management intends to execute on its business strategy of disposing of assets as well as collecting loan repayments from borrowers to further generate available liquidity. Should these sources of capital not be sufficiently available, the Company will slow its pace of making new investments and will need to identify alternative sources of capital. As of
August 2, 2017
, the Company had approximately
$1.2 billion
of cash and available capacity under existing borrowing arrangements.
|
|
As of
|
||||||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Encumbered Assets
|
|
Unencumbered Assets
|
|
Encumbered Assets
|
|
Unencumbered Assets
|
||||||||
Real estate, net
|
$
|
871,613
|
|
|
$
|
471,369
|
|
|
$
|
881,212
|
|
|
$
|
506,062
|
|
Real estate available and held for sale
|
—
|
|
|
68,045
|
|
|
—
|
|
|
237,531
|
|
||||
Land and development, net
|
25,100
|
|
|
830,397
|
|
|
35,165
|
|
|
910,400
|
|
||||
Loans receivable and other lending investments, net
(1)(2)
|
137,722
|
|
|
943,592
|
|
|
172,581
|
|
|
1,142,050
|
|
||||
Other investments
|
—
|
|
|
276,821
|
|
|
—
|
|
|
214,406
|
|
||||
Cash and other assets
|
—
|
|
|
1,200,845
|
|
|
—
|
|
|
590,299
|
|
||||
Total
|
$
|
1,034,435
|
|
|
$
|
3,791,069
|
|
|
$
|
1,088,958
|
|
|
$
|
3,600,748
|
|
(1)
|
As of
June 30, 2017
and
December 31, 2016
, the amounts presented exclude general reserves for loan losses of
$17.8 million
and
$23.3 million
, respectively.
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, the amounts presented exclude loan participations of
$107.1 million
and
$159.1 million
, respectively.
|
|
Loans and Other Lending Investments
(1)
|
|
Real Estate
|
|
Other
Investments
|
|
Total
|
||||||||
Performance-Based Commitments
|
$
|
313,615
|
|
|
$
|
7,886
|
|
|
$
|
21,420
|
|
|
$
|
342,921
|
|
Strategic Investments
|
—
|
|
|
—
|
|
|
45,634
|
|
|
45,634
|
|
||||
Total
(2)
|
$
|
313,615
|
|
|
$
|
7,886
|
|
|
$
|
67,054
|
|
|
$
|
388,555
|
|
(1)
|
Excludes
$130.3 million
of commitments on loan participations sold that are not the obligation of the Company.
|
(2)
|
The Company did not have any Discretionary Fundings as of
June 30, 2017
.
|
Derivatives Designated in Hedging Relationships
|
|
Location of Gain (Loss)
Recognized in Income
|
|
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
(Ineffective Portion)
|
||
For the Three Months Ended June 30, 2017
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Interest Expense
|
|
(44
|
)
|
|
384
|
|
|
N/A
|
Interest rate cap
|
|
Earnings from equity method investments
|
|
(9
|
)
|
|
(9
|
)
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
(93
|
)
|
|
(62
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
(70
|
)
|
|
—
|
|
|
N/A
|
For the Three Months Ended June 30, 2016
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Interest Expense
|
|
(192
|
)
|
|
(23
|
)
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
(165
|
)
|
|
(95
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
38
|
|
|
—
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
For the Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
||
Interest rate swaps
|
|
Interest Expense
|
|
424
|
|
|
355
|
|
|
N/A
|
Interest rate cap
|
|
Earnings from equity method investments
|
|
(14
|
)
|
|
(14
|
)
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
(15
|
)
|
|
(150
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
(369
|
)
|
|
—
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
For the Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
||
Interest rate cap
|
|
Interest Expense
|
|
—
|
|
|
(185
|
)
|
|
N/A
|
Interest rate cap
|
|
Earnings from equity method investments
|
|
(1
|
)
|
|
—
|
|
|
N/A
|
Interest rate swaps
|
|
Interest Expense
|
|
(694
|
)
|
|
2
|
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
(624
|
)
|
|
(192
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
(49
|
)
|
|
—
|
|
|
N/A
|
|
|
|
|
Amount of Gain (Loss)
Recognized in Income
|
||||||||||||||
|
|
Location of Gain
(Loss) Recognized in
Income
|
|
For the Three Months Ended June 30,
|
|
For the Six Months
Ended June 30, |
||||||||||||
Derivatives not Designated in Hedging Relationships
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
Interest rate cap
|
|
Other Expense
|
|
$
|
(41
|
)
|
|
$
|
(252
|
)
|
|
$
|
6
|
|
|
$
|
(1,055
|
)
|
Foreign exchange contracts
|
|
Other Expense
|
|
(645
|
)
|
|
523
|
|
|
(769
|
)
|
|
341
|
|
Derivative Type
|
|
Notional
Amount
|
|
Notional
(USD Equivalent)
|
|
Maturity
|
||||
Sells Indian rupee ("INR")/Buys USD Forward
|
|
₨
|
350,000
|
|
|
$
|
5,344
|
|
|
July 2017
|
Derivative Type
|
|
Notional
Amount
|
|
Notional
(USD Equivalent)
|
|
Maturity
|
||||
Sells euro ("EUR")/Buys USD Forward
|
|
€
|
7,000
|
|
|
$
|
7,496
|
|
|
July 2017
|
Sells pound sterling ("GBP")/Buys USD Forward
|
|
£
|
3,200
|
|
|
$
|
3,988
|
|
|
July 2017
|
Derivative Type
|
|
Notional
Amount
|
|
Variable Rate
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity
|
||
Interest rate swap
|
|
$
|
26,116
|
|
|
LIBOR + 2.00%
|
|
3.47%
|
|
October 2012
|
|
November 2019
|
Derivative Type
|
|
Notional
Amount
|
|
Variable Rate
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity
|
||
Interest rate cap
|
|
$
|
500,000
|
|
|
LIBOR
|
|
1.00%
|
|
July 2014
|
|
July 2017
|
|
|
|
|
|
|
Cumulative Preferential Cash
Dividends
(1)(2)
|
||||||||||||
Series
|
|
Shares Issued and
Outstanding
(in thousands)
|
|
Par Value
|
|
Liquidation Preference
(3)(4)
|
|
Rate per Annum
|
|
Equivalent to
Fixed Annual
Rate (per share)
|
||||||||
D
|
|
4,000
|
|
|
$
|
0.001
|
|
|
$
|
25.00
|
|
|
8.00
|
%
|
|
$
|
2.00
|
|
E
|
|
5,600
|
|
|
0.001
|
|
|
25.00
|
|
|
7.875
|
%
|
|
1.97
|
|
|||
F
|
|
4,000
|
|
|
0.001
|
|
|
25.00
|
|
|
7.80
|
%
|
|
1.95
|
|
|||
G
|
|
3,200
|
|
|
0.001
|
|
|
25.00
|
|
|
7.65
|
%
|
|
1.91
|
|
|||
I
|
|
5,000
|
|
|
0.001
|
|
|
25.00
|
|
|
7.50
|
%
|
|
1.88
|
|
|||
J (convertible)
|
|
4,000
|
|
|
0.001
|
|
|
50.00
|
|
|
4.50
|
%
|
|
2.25
|
|
|||
|
|
25,800
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Holders of shares of the Series D, E, F, G, I and J 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
$4.0 million
,
$5.5 million
,
$3.9 million
,
$3.1 million
and
$4.7 million
on its Series D, E, F, G and I Cumulative Redeemable Preferred Stock during the
six months
ended
June 30, 2017
and
2016
. The Company declared and paid dividends of
$4.5 million
on its Series J Convertible Perpetual Preferred Stock during the
six months
ended
June 30, 2017
and
2016
. The character of the 2016 dividends was as follows:
47.30%
was a capital gain distribution, of which
76.15%
represents unrecaptured section 1250 gain and
23.85%
long term capital gain, and
52.70%
was ordinary income. There are
no
dividend arrearages on any of the preferred shares currently outstanding.
|
(3)
|
The Company may, at its option, redeem the Series E, F, 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)
|
Each share of the Series J Preferred Stock is convertible at the holder's option at any time, initially into
3.9087
shares of the Company's common stock (equal to an initial conversion price of approximately
$12.79
per share), subject to specified adjustments. The Company may not redeem the Series J Preferred Stock prior to March 15, 2018. On or after March 15, 2018, the Company may, at its option, redeem the Series J 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
$50.00
per share, plus accrued and unpaid dividends, if any, to the redemption date.
|
|
As of
|
||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Unrealized gains on available-for-sale securities
|
$
|
715
|
|
|
$
|
149
|
|
Unrealized gains on cash flow hedges
|
230
|
|
|
27
|
|
||
Unrealized losses on cumulative translation adjustment
|
(4,623
|
)
|
|
(4,394
|
)
|
||
Accumulated other comprehensive income (loss)
|
$
|
(3,678
|
)
|
|
$
|
(4,218
|
)
|
•
|
In January 2015, the Company granted an additional
10
iPIP points in the 2013-2014 investment pool and
34
iPIP points in the 2015-2016 investment pool.
|
•
|
In January 2016, the Company granted an additional
10
iPIP points in the 2013-2014 investment pool and an additional
40
iPIP points in the 2015-2016 investment pool.
|
•
|
In June 2016, the Company granted an additional
2.5
iPIP points in the 2015-2016 investment pool.
|
•
|
In February 2017, the Company granted an additional
5
iPIP points in the 2013-2014 investment pool, an additional
18
iPIP points in the 2015-2016 investment pool, and
44
iPIP points in the 2017-2018 investment pool.
|
•
|
115,571
service-based Units granted on February 22, 2017, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will cliff vest in
one
installment on December 31, 2019, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. 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 Units vest and are settled. As of
June 30, 2017
,
111,642
of such service-based Units were outstanding.
|
•
|
60,000
service-based Units granted on June 15, 2016, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will vest in equal annual installments over
four
years on each anniversary of the grant date, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Upon vesting of these Units, the holder will receive shares of the Company's common stock in the amount of the vested Units, net of statutory minimum required tax withholdings. 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 Units vest and are settled.
|
•
|
104,026
service-based Units granted on January 29, 2016, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will cliff vest in
one
installment on December 31, 2018, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. 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 Units vest and are settled.
|
•
|
37,514
target amount of performance-based Units granted on January 30, 2015, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The performance is based on the Company's TSR, measured over a performance period ending on December 31, 2017, which is the date the awards cliff vest. Vesting will range from
0%
to
200%
of the target amount of the awards, depending on the Company’s TSR performance relative to the NAREIT All REITs Index (one-half of the target amount of the award) and the Russell 2000 Index (one-half of the target amount of the award) during the performance period. The Company, as well as any companies not included in each index at the beginning and end of the performance period, are excluded from calculation of the performance of such index. To the extent Units vest based on the Company's TSR performance, holders will receive an equivalent number of shares of common stock (after deducting shares for minimum required statutory withholdings), if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. 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 Units vest and are settled. The fair values of the performance-based Units were determined by utilizing a Monte Carlo model to simulate a range of possible future stock prices for the Company's common stock. The assumptions used to estimate the fair value of these performance-based awards were
0.75%
for risk-free interest rate and
28.14%
for expected stock price volatility.
|
•
|
54,201
service-based Units granted on January 30, 2015, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the
|
•
|
4,751
service-based Units granted on various dates, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units have an original vesting term of
three
years. Upon vesting of these Units, holders will receive shares of the Company's common stock in the amount of the vested Units, net of statutory minimum required tax withholdings. 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 Units vest and are settled.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income (loss) from continuing operations
|
$
|
76,117
|
|
|
$
|
12,670
|
|
|
$
|
47,869
|
|
|
$
|
(10,670
|
)
|
Income from sales of real estate
|
844
|
|
|
43,484
|
|
|
8,954
|
|
|
53,943
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(5,710
|
)
|
|
(8,825
|
)
|
|
(4,610
|
)
|
|
(7,883
|
)
|
||||
Preferred dividends
|
(12,830
|
)
|
|
(12,830
|
)
|
|
(25,660
|
)
|
|
(25,660
|
)
|
||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for basic earnings per common share
(1)
|
$
|
58,421
|
|
|
$
|
34,499
|
|
|
$
|
26,553
|
|
|
$
|
9,730
|
|
Add: Effect of joint venture shares
|
5
|
|
|
3
|
|
|
9
|
|
|
2
|
|
||||
Add: Effect of 1.50% senior convertible unsecured notes
|
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
||||
Add: Effect of 3.00% senior convertible unsecured notes
|
—
|
|
|
1,782
|
|
|
—
|
|
|
—
|
|
||||
Add: Effect of Series J convertible perpetual preferred stock
|
2,250
|
|
|
2,250
|
|
|
4,500
|
|
|
—
|
|
||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for diluted earnings per common share
(1)
|
$
|
60,676
|
|
|
$
|
39,674
|
|
|
$
|
31,062
|
|
|
$
|
9,732
|
|
(1)
|
For the
three months
ended June 30,
2016
, includes income from continuing operations allocable to Participating Security Holders of
$20
and
$14
on a basic and dilutive basis. For the
six months
ended June 30,
2016
, includes income from continuing operations allocable to Participating Security Holders of
$11
on a basic and dilutive basis.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Earnings allocable to common shares:
|
|
|
|
|
|
|
|
||||||||
Numerator for basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
58,421
|
|
|
$
|
34,481
|
|
|
$
|
26,553
|
|
|
$
|
9,724
|
|
Income from discontinued operations
|
173
|
|
|
3,631
|
|
|
4,939
|
|
|
7,209
|
|
||||
Gain from discontinued operations
|
123,418
|
|
|
—
|
|
|
123,418
|
|
|
—
|
|
||||
Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
—
|
|
||||
Net income attributable to iStar Inc. and allocable to common shareholders
|
$
|
177,467
|
|
|
$
|
38,112
|
|
|
$
|
150,365
|
|
|
$
|
16,933
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator for diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
60,676
|
|
|
$
|
39,661
|
|
|
$
|
31,062
|
|
|
$
|
9,726
|
|
Income from discontinued operations
|
173
|
|
|
3,632
|
|
|
4,939
|
|
|
7,209
|
|
||||
Gain from discontinued operations
|
123,418
|
|
|
—
|
|
|
123,418
|
|
|
—
|
|
||||
Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
—
|
|
||||
Net income attributable to iStar Inc. and allocable to common shareholders
|
$
|
179,722
|
|
|
$
|
43,293
|
|
|
$
|
154,874
|
|
|
$
|
16,935
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic and diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for basic earnings per common share
|
72,142
|
|
|
73,984
|
|
|
72,104
|
|
|
75,522
|
|
||||
Add: Effect of assumed shares issued under treasury stock method for restricted stock units
|
120
|
|
|
34
|
|
|
119
|
|
|
52
|
|
||||
Add: Effect of joint venture shares
|
298
|
|
|
298
|
|
|
298
|
|
|
298
|
|
||||
Add: Effect of 1.50% senior convertible unsecured notes
|
—
|
|
|
11,567
|
|
|
—
|
|
|
—
|
|
||||
Add: Effect of 3.00% senior convertible unsecured notes
|
—
|
|
|
16,992
|
|
|
—
|
|
|
—
|
|
||||
Add: Effect of series J convertible perpetual preferred stock
|
15,635
|
|
|
15,635
|
|
|
15,635
|
|
|
—
|
|
||||
Weighted average common shares outstanding for diluted earnings per common share
|
88,195
|
|
|
118,510
|
|
|
88,156
|
|
|
75,872
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
0.81
|
|
|
$
|
0.47
|
|
|
$
|
0.37
|
|
|
$
|
0.13
|
|
Income from discontinued operations
|
—
|
|
|
0.05
|
|
|
0.07
|
|
|
0.09
|
|
||||
Gain from discontinued operations
|
1.71
|
|
|
—
|
|
|
1.71
|
|
|
—
|
|
||||
Income tax expense from discontinued operations
|
(0.06
|
)
|
|
—
|
|
|
(0.06
|
)
|
|
—
|
|
||||
Net income attributable to iStar Inc. and allocable to common shareholders
|
$
|
2.46
|
|
|
$
|
0.52
|
|
|
$
|
2.09
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
0.69
|
|
|
$
|
0.34
|
|
|
$
|
0.35
|
|
|
$
|
0.13
|
|
Income from discontinued operations
|
—
|
|
|
0.03
|
|
|
0.06
|
|
|
0.09
|
|
||||
Gain from discontinued operations
|
1.40
|
|
|
—
|
|
|
1.40
|
|
|
—
|
|
||||
Income tax expense from discontinued operations
|
(0.05
|
)
|
|
—
|
|
|
(0.05
|
)
|
|
—
|
|
||||
Net income attributable to iStar Inc. and allocable to common shareholders
|
$
|
2.04
|
|
|
$
|
0.37
|
|
|
$
|
1.76
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
3.00% convertible senior unsecured notes
|
—
|
|
|
—
|
|
|
—
|
|
|
16,992
|
|
Series J convertible perpetual preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
15,635
|
|
1.50% convertible senior unsecured notes
|
—
|
|
|
—
|
|
|
—
|
|
|
11,567
|
|
Joint venture shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
For the
three and six months
ended June 30,
2017
, the effect of
5
and
20
unvested time and performance-based Units were anti-dilutive, respectively.
|
(2)
|
For the
three and six months
ended June 30,
2016
, the effect of
54
and
103
unvested time and performance-based Units were anti-dilutive, respectively.
|
|
|
|
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 June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Recurring basis:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
(1)
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
—
|
|
Derivative liabilities
(1)
|
751
|
|
|
—
|
|
|
751
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
|
22,222
|
|
|
—
|
|
|
—
|
|
|
22,222
|
|
||||
Non-recurring basis:
|
|
|
|
|
|
|
|
||||||||
Impaired land and development
(2)
|
7,400
|
|
|
—
|
|
|
—
|
|
|
7,400
|
|
||||
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Recurring basis:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
(1)
|
$
|
727
|
|
|
$
|
—
|
|
|
$
|
727
|
|
|
$
|
—
|
|
Derivative liabilities
(1)
|
47
|
|
|
—
|
|
|
47
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
|
21,666
|
|
|
—
|
|
|
—
|
|
|
21,666
|
|
||||
Non-recurring basis:
|
|
|
|
|
|
|
|
||||||||
Impaired loans
(3)
|
7,200
|
|
|
—
|
|
|
—
|
|
|
7,200
|
|
||||
Impaired real estate
(4)
|
3,063
|
|
|
—
|
|
|
—
|
|
|
3,063
|
|
(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 an impairment on
one
land and development asset with a fair value of
$7.4 million
based on a discount rate of
15%
using discounted cash flows over a
two
year sellout period.
|
(3)
|
The Company recorded a provision for loan losses on
one
loan with a fair value of
$5.2 million
using an appraisal based on market comparable sales. In addition, the Company recorded a recovery of loan losses on
one
loan with a fair value of
$2.0 million
based on proceeds to be received.
|
(4)
|
The Company recorded an impairment on
one
real estate asset with a fair value of
$3.1 million
based on a discount rate of
11%
using discounted cash flows over a
two
year sellout period.
|
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
21,666
|
|
|
$
|
1,161
|
|
Purchases
|
|
—
|
|
|
4,366
|
|
||
Repayments
|
|
(10
|
)
|
|
(10
|
)
|
||
Unrealized gains recorded in other comprehensive income
|
|
566
|
|
|
464
|
|
||
Ending balance
|
|
$
|
22,222
|
|
|
$
|
5,981
|
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land and Development
|
|
Corporate/Other
(1)
|
|
Company Total
|
||||||||||||
Six Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating lease income
|
$
|
—
|
|
|
$
|
62,104
|
|
|
$
|
31,929
|
|
|
$
|
316
|
|
|
$
|
—
|
|
|
$
|
94,349
|
|
Interest income
|
57,703
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,703
|
|
||||||
Other income
|
556
|
|
|
1,056
|
|
|
23,688
|
|
|
124,256
|
|
|
1,818
|
|
|
151,374
|
|
||||||
Land development revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
152,760
|
|
|
—
|
|
|
152,760
|
|
||||||
Earnings from equity method investments
|
—
|
|
|
2,062
|
|
|
1,101
|
|
|
7,448
|
|
|
606
|
|
|
11,217
|
|
||||||
Income from discontinued operations
|
—
|
|
|
4,939
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,939
|
|
||||||
Gain from discontinued operations
|
—
|
|
|
123,418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,418
|
|
||||||
Income from sales of real estate
|
—
|
|
|
6,212
|
|
|
2,742
|
|
|
—
|
|
|
—
|
|
|
8,954
|
|
||||||
Total revenue and other earnings
|
58,259
|
|
|
199,791
|
|
|
59,460
|
|
|
284,780
|
|
|
2,424
|
|
|
604,714
|
|
||||||
Real estate expense
|
—
|
|
|
(8,640
|
)
|
|
(44,171
|
)
|
|
(17,463
|
)
|
|
—
|
|
|
(70,274
|
)
|
||||||
Land development cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(138,376
|
)
|
|
—
|
|
|
(138,376
|
)
|
||||||
Other expense
|
(1,004
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,141
|
)
|
|
(18,145
|
)
|
||||||
Allocated interest expense
|
(22,396
|
)
|
|
(29,404
|
)
|
|
(10,612
|
)
|
|
(15,240
|
)
|
|
(22,300
|
)
|
|
(99,952
|
)
|
||||||
Allocated general and administrative
(2)
|
(8,287
|
)
|
|
(10,563
|
)
|
|
(4,119
|
)
|
|
(8,930
|
)
|
|
(10,697
|
)
|
|
(42,596
|
)
|
||||||
Segment profit (loss)
(3)
|
$
|
26,572
|
|
|
$
|
151,184
|
|
|
$
|
558
|
|
|
$
|
104,771
|
|
|
$
|
(47,714
|
)
|
|
$
|
235,371
|
|
Other significant non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recovery of loan losses
|
$
|
(5,528
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,528
|
)
|
Impairment of assets
|
—
|
|
|
219
|
|
|
4,413
|
|
|
10,064
|
|
|
—
|
|
|
14,696
|
|
||||||
Depreciation and amortization
|
—
|
|
|
15,039
|
|
|
8,962
|
|
|
791
|
|
|
659
|
|
|
25,451
|
|
||||||
Capitalized expenditures
|
—
|
|
|
1,687
|
|
|
16,566
|
|
|
56,879
|
|
|
—
|
|
|
75,132
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating lease income
|
$
|
—
|
|
|
$
|
63,350
|
|
|
$
|
36,909
|
|
|
$
|
211
|
|
|
$
|
—
|
|
|
$
|
100,470
|
|
Interest income
|
67,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,620
|
|
||||||
Other income
|
1,620
|
|
|
512
|
|
|
14,557
|
|
|
2,232
|
|
|
2,715
|
|
|
21,636
|
|
||||||
Land development revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
42,835
|
|
|
—
|
|
|
42,835
|
|
||||||
Earnings from equity method investments
|
—
|
|
|
1,890
|
|
|
30,934
|
|
|
9,348
|
|
|
5,542
|
|
|
47,714
|
|
||||||
Income from discontinued operations
|
—
|
|
|
7,214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,214
|
|
||||||
Income from sales of real estate
|
—
|
|
|
9,267
|
|
|
44,676
|
|
|
—
|
|
|
—
|
|
|
53,943
|
|
||||||
Total revenue and other earnings
|
69,240
|
|
|
82,233
|
|
|
127,076
|
|
|
54,626
|
|
|
8,257
|
|
|
341,432
|
|
||||||
Real estate expense
|
—
|
|
|
(9,065
|
)
|
|
(41,916
|
)
|
|
(18,591
|
)
|
|
—
|
|
|
(69,572
|
)
|
||||||
Land development cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,838
|
)
|
|
—
|
|
|
(28,838
|
)
|
||||||
Other expense
|
(839
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,083
|
)
|
|
(3,922
|
)
|
||||||
Allocated interest expense
|
(29,333
|
)
|
|
(32,700
|
)
|
|
(12,469
|
)
|
|
(17,027
|
)
|
|
(21,539
|
)
|
|
(113,068
|
)
|
||||||
Allocated general and administrative
(2)
|
(7,617
|
)
|
|
(8,609
|
)
|
|
(3,508
|
)
|
|
(6,597
|
)
|
|
(10,226
|
)
|
|
(36,557
|
)
|
||||||
Segment profit (loss)
(3)
|
$
|
31,451
|
|
|
$
|
31,859
|
|
|
$
|
69,183
|
|
|
$
|
(16,427
|
)
|
|
$
|
(26,591
|
)
|
|
$
|
89,475
|
|
Other significant non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for loan losses
|
$
|
2,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,206
|
|
Impairment of assets
|
—
|
|
|
—
|
|
|
3,012
|
|
|
—
|
|
|
—
|
|
|
3,012
|
|
||||||
Depreciation and amortization
|
—
|
|
|
16,028
|
|
|
10,305
|
|
|
699
|
|
|
549
|
|
|
27,581
|
|
||||||
Capitalized expenditures
|
—
|
|
|
2,476
|
|
|
28,243
|
|
|
66,274
|
|
|
—
|
|
|
96,993
|
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land and Development
|
|
Corporate/Other
(1)
|
|
Company Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate, net
|
$
|
—
|
|
|
$
|
863,406
|
|
|
$
|
479,576
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,342,982
|
|
Real estate available and held for sale
|
—
|
|
|
924
|
|
|
67,121
|
|
|
—
|
|
|
—
|
|
|
68,045
|
|
||||||
Total real estate
|
—
|
|
|
864,330
|
|
|
546,697
|
|
|
—
|
|
|
—
|
|
|
1,411,027
|
|
||||||
Land and development, net
|
—
|
|
|
—
|
|
|
—
|
|
|
855,497
|
|
|
—
|
|
|
855,497
|
|
||||||
Loans receivable and other lending investments, net
|
1,170,565
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,170,565
|
|
||||||
Other investments
|
—
|
|
|
179,284
|
|
|
7,882
|
|
|
62,417
|
|
|
27,238
|
|
|
276,821
|
|
||||||
Total portfolio assets
|
$
|
1,170,565
|
|
|
$
|
1,043,614
|
|
|
$
|
554,579
|
|
|
$
|
917,914
|
|
|
$
|
27,238
|
|
|
3,713,910
|
|
|
Cash and other assets
|
|
|
|
|
|
|
|
|
|
|
1,200,845
|
|
|||||||||||
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,914,755
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate, net
|
$
|
—
|
|
|
$
|
911,112
|
|
|
$
|
476,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,387,274
|
|
Real estate available and held for sale
|
—
|
|
|
155,051
|
|
|
82,480
|
|
|
—
|
|
|
—
|
|
|
237,531
|
|
||||||
Total real estate
|
—
|
|
|
1,066,163
|
|
|
558,642
|
|
|
—
|
|
|
—
|
|
|
1,624,805
|
|
||||||
Land and development, net
|
—
|
|
|
—
|
|
|
—
|
|
|
945,565
|
|
|
—
|
|
|
945,565
|
|
||||||
Loans receivable and other lending investments, net
|
1,450,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,450,439
|
|
||||||
Other investments
|
—
|
|
|
92,669
|
|
|
3,583
|
|
|
84,804
|
|
|
33,350
|
|
|
214,406
|
|
||||||
Total portfolio assets
|
$
|
1,450,439
|
|
|
$
|
1,158,832
|
|
|
$
|
562,225
|
|
|
$
|
1,030,369
|
|
|
$
|
33,350
|
|
|
4,235,215
|
|
|
Cash and other assets
|
|
|
|
|
|
|
|
|
|
|
590,299
|
|
|||||||||||
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,825,514
|
|
(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
$3.9 million
and
$9.8 million
for the
three and six months
ended
June 30, 2017
respectively, and
$1.6 million
and
$6.2 million
for the
three and six months
ended
June 30, 2016
, respectively.
|
(3)
|
The following is a reconciliation of segment profit to net income (loss) ($ in thousands):
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment profit
|
$
|
232,281
|
|
|
$
|
79,072
|
|
|
$
|
235,371
|
|
|
$
|
89,475
|
|
Less: Recovery of (provision for) loan losses
|
600
|
|
|
(700
|
)
|
|
5,528
|
|
|
(2,206
|
)
|
||||
Less: Impairment of assets
|
(10,284
|
)
|
|
(3,012
|
)
|
|
(14,696
|
)
|
|
(3,012
|
)
|
||||
Less: Stock-based compensation expense
|
(3,915
|
)
|
|
(1,633
|
)
|
|
(9,796
|
)
|
|
(6,211
|
)
|
||||
Less: Depreciation and amortization
|
(13,171
|
)
|
|
(13,673
|
)
|
|
(25,451
|
)
|
|
(27,581
|
)
|
||||
Less: Income tax (expense) benefit
|
(1,644
|
)
|
|
1,190
|
|
|
(2,251
|
)
|
|
1,604
|
|
||||
Less: Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
—
|
|
||||
Less: Loss on early extinguishment of debt, net
|
(3,315
|
)
|
|
(1,457
|
)
|
|
(3,525
|
)
|
|
(1,582
|
)
|
||||
Net income
|
$
|
196,007
|
|
|
$
|
59,787
|
|
|
$
|
180,635
|
|
|
$
|
50,487
|
|
Property/Collateral Types
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land & Development
|
|
Total
|
|
% of
Total |
|||||||||||
Office / Industrial
|
|
$
|
36,964
|
|
|
$
|
760,965
|
|
|
$
|
122,658
|
|
|
$
|
—
|
|
|
$
|
920,587
|
|
|
22.2
|
%
|
Land and Development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
925,191
|
|
|
925,191
|
|
|
22.3
|
%
|
|||||
Hotel
|
|
338,422
|
|
|
—
|
|
|
102,815
|
|
|
—
|
|
|
441,237
|
|
|
10.6
|
%
|
|||||
Entertainment / Leisure
|
|
—
|
|
|
489,387
|
|
|
—
|
|
|
—
|
|
|
489,387
|
|
|
11.8
|
%
|
|||||
Mixed Use / Mixed Collateral
|
|
297,024
|
|
|
—
|
|
|
180,153
|
|
|
—
|
|
|
477,177
|
|
|
11.5
|
%
|
|||||
Condominium
|
|
258,010
|
|
|
—
|
|
|
66,490
|
|
|
—
|
|
|
324,500
|
|
|
7.7
|
%
|
|||||
Other Property Types
|
|
228,527
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
228,534
|
|
|
5.5
|
%
|
|||||
Retail
|
|
29,418
|
|
|
57,348
|
|
|
136,016
|
|
|
—
|
|
|
222,782
|
|
|
5.4
|
%
|
|||||
Ground Leases
(1)
|
|
—
|
|
|
96,229
|
|
|
—
|
|
|
—
|
|
|
96,229
|
|
|
2.3
|
%
|
|||||
Strategic Investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,238
|
|
|
0.7
|
%
|
|||||
Total
|
|
$
|
1,188,365
|
|
|
$
|
1,403,929
|
|
|
$
|
608,139
|
|
|
$
|
925,191
|
|
|
$
|
4,152,862
|
|
|
100.0
|
%
|
Geographic Region
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land & Development
|
|
Total
|
|
% of
Total |
|||||||||||
Northeast
|
|
$
|
569,385
|
|
|
$
|
399,468
|
|
|
$
|
47,212
|
|
|
$
|
258,381
|
|
|
$
|
1,274,446
|
|
|
30.7
|
%
|
West
|
|
98,197
|
|
|
312,383
|
|
|
42,616
|
|
|
364,834
|
|
|
818,030
|
|
|
19.6
|
%
|
|||||
Southeast
|
|
174,602
|
|
|
249,574
|
|
|
146,511
|
|
|
123,714
|
|
|
694,401
|
|
|
16.7
|
%
|
|||||
Mid-Atlantic
|
|
—
|
|
|
153,835
|
|
|
47,014
|
|
|
124,298
|
|
|
325,147
|
|
|
7.8
|
%
|
|||||
Southwest
|
|
59,984
|
|
|
160,019
|
|
|
243,055
|
|
|
22,464
|
|
|
485,522
|
|
|
11.7
|
%
|
|||||
Central
|
|
187,775
|
|
|
97,988
|
|
|
71,590
|
|
|
31,500
|
|
|
388,853
|
|
|
9.4
|
%
|
|||||
Various
(2)
|
|
98,422
|
|
|
30,662
|
|
|
10,141
|
|
|
—
|
|
|
139,225
|
|
|
3.4
|
%
|
|||||
Strategic Investments
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,238
|
|
|
0.7
|
%
|
|||||
Total
|
|
$
|
1,188,365
|
|
|
$
|
1,403,929
|
|
|
$
|
608,139
|
|
|
$
|
925,191
|
|
|
$
|
4,152,862
|
|
|
100.0
|
%
|
(1)
|
Represents the market value of our equity method investment in SAFE.
|
|
June 30, 2017
|
|||||||||||||||||
|
Number of Loans
|
|
Gross Carrying Value
|
|
Reserve for Loan Losses
|
|
Carrying Value
|
|
% of Total
|
|
Reserve for Loan Losses as a % of Gross Carrying Value
|
|||||||
Performing loans
|
36
|
|
|
$
|
914,106
|
|
|
$
|
(17,800
|
)
|
|
$
|
896,306
|
|
|
82.6%
|
|
1.9%
|
Non-performing loans
|
5
|
|
|
249,659
|
|
|
(60,989
|
)
|
|
188,670
|
|
|
17.4%
|
|
24.4%
|
|||
Total
|
41
|
|
|
$
|
1,163,765
|
|
|
$
|
(78,789
|
)
|
|
$
|
1,084,976
|
|
|
100.0%
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
December 31, 2016
|
|||||||||||||||||
|
Number of Loans
|
|
Gross Carrying Value
|
|
Reserve for Loan Losses
|
|
Carrying Value
|
|
% of Total
|
|
Reserve for Loan Losses as a % of Gross Carrying Value
|
|||||||
Performing loans
|
35
|
|
|
$
|
1,202,127
|
|
|
$
|
(23,300
|
)
|
|
$
|
1,178,827
|
|
|
86.0%
|
|
1.9%
|
Non-performing loans
|
6
|
|
|
253,941
|
|
|
(62,245
|
)
|
|
191,696
|
|
|
14.0%
|
|
24.5%
|
|||
Total
|
41
|
|
|
$
|
1,456,068
|
|
|
$
|
(85,545
|
)
|
|
$
|
1,370,523
|
|
|
100.0%
|
|
5.9%
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Senior mortgages
|
$
|
515,053
|
|
|
$
|
854,805
|
|
Corporate/Partnership loans
|
387,214
|
|
|
333,244
|
|
||
Subordinate mortgages
|
11,839
|
|
|
14,078
|
|
||
Total
|
$
|
914,106
|
|
|
$
|
1,202,127
|
|
|
|
|
|
||||
Weighted average LTV
|
62
|
%
|
|
64
|
%
|
||
Yield
|
9.7
|
%
|
|
8.9
|
%
|
Net Lease Statistics
(1)
|
|||||
|
June 30, 2017
|
|
December 31, 2016
|
||
Square feet (mm)
(2)
|
15,959
|
|
|
17,214
|
|
Leased %
|
99
|
%
|
|
98
|
%
|
Weighted average lease term (years)
(3)
|
11.5
|
|
|
14.7
|
|
Yield
|
8.1
|
%
|
|
8.4
|
%
|
(1)
|
Statistics exclude our equity method investment in SAFE.
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, includes 4,005 and
3,081
square feet, respectively, at our equity method investment of which we own 51.9%.
|
(3)
|
Weighted average lease term as of June 30, 2017 includes a lease extension that was effective July 3, 2017.
|
Commercial Operating Property Statistics
|
||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||
|
Stabilized Operating
(1)
|
Transitional Operating
(1)
|
|
Total
|
||||||||||||||||
|
June 30, 2017
|
December 31, 2016
|
|
June 30, 2017
|
December 31, 2016
|
|
June 30, 2017
|
December 31, 2016
|
||||||||||||
Gross book value ($mm)
(2)
|
$
|
343
|
|
$
|
337
|
|
|
$
|
198
|
|
$
|
189
|
|
|
$
|
541
|
|
$
|
526
|
|
Occupancy
(3)
|
87
|
%
|
86
|
%
|
|
59
|
%
|
54
|
%
|
|
77
|
%
|
74
|
%
|
||||||
Yield
|
8.5
|
%
|
8.5
|
%
|
|
3.8
|
%
|
1.5
|
%
|
|
6.9
|
%
|
5.5
|
%
|
(1)
|
Stabilized commercial properties generally have occupancy levels above 80% and/or generate yields resulting in a sufficient return based upon the properties’ risk profiles. Transitional commercial properties are generally those properties that do not meet these criteria.
|
(2)
|
Gross carrying value represents carrying value gross of accumulated depreciation.
|
(3)
|
Occupancy is as of
June 30, 2017
and
December 31, 2016
.
|
Residential Operating Property Statistics
|
|||||||
($ in millions)
|
|||||||
|
Six Months Ended
|
||||||
|
June 30, 2017
|
|
June 30, 2016
|
||||
Condominium units sold
|
12
|
|
|
69
|
|
||
Proceeds
|
$
|
17.6
|
|
|
$
|
58.7
|
|
Income from sales of real estate
|
$
|
2.7
|
|
|
$
|
18.8
|
|
Land and Development Portfolio Rollforward
|
|||||||
(in millions)
|
|||||||
|
Six Months Ended
|
||||||
|
June 30, 2017
|
|
June 30, 2016
|
||||
Beginning balance
(1)
|
$
|
945.6
|
|
|
$
|
1,002.0
|
|
Asset sales
(2)
|
(133.8
|
)
|
|
(22.4
|
)
|
||
Capital expenditures
|
56.9
|
|
|
66.3
|
|
||
Other
|
(13.2
|
)
|
|
0.1
|
|
||
Ending balance
(1)
|
$
|
855.5
|
|
|
$
|
1,046.0
|
|
Land and Development Statistics
|
|||||||
(in millions)
|
|||||||
|
Six Months Ended
|
||||||
|
June 30, 2017
|
|
June 30, 2016
|
||||
Land development revenue
|
$
|
152.8
|
|
|
$
|
42.8
|
|
Land development cost of sales
|
138.4
|
|
|
28.8
|
|
||
Gross margin
|
$
|
14.4
|
|
|
$
|
14.0
|
|
Earnings from land development equity method investments
|
7.4
|
|
|
9.3
|
|
||
Total
|
$
|
21.8
|
|
|
$
|
23.3
|
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Operating lease income
|
$
|
47,002
|
|
|
$
|
49,975
|
|
|
$
|
(2,973
|
)
|
|
(6
|
)%
|
Interest income
|
28,645
|
|
|
34,400
|
|
|
(5,755
|
)
|
|
(17
|
)%
|
|||
Other income
|
139,510
|
|
|
10,096
|
|
|
129,414
|
|
|
>100%
|
|
|||
Land development revenue
|
132,710
|
|
|
27,888
|
|
|
104,822
|
|
|
>100%
|
|
|||
Total revenue
|
347,867
|
|
|
122,359
|
|
|
225,508
|
|
|
>100%
|
|
|||
Interest expense
|
48,807
|
|
|
56,047
|
|
|
(7,240
|
)
|
|
(13
|
)%
|
|||
Real estate expense
|
34,684
|
|
|
35,328
|
|
|
(644
|
)
|
|
(2
|
)%
|
|||
Land development cost of sales
|
122,466
|
|
|
17,262
|
|
|
105,204
|
|
|
>100%
|
|
|||
Depreciation and amortization
|
13,171
|
|
|
13,673
|
|
|
(502
|
)
|
|
(4
|
)%
|
|||
General and administrative
|
27,218
|
|
|
19,665
|
|
|
7,553
|
|
|
38
|
%
|
|||
(Recovery of) provision for loan losses
|
(600
|
)
|
|
700
|
|
|
(1,300
|
)
|
|
>100%
|
|
|||
Impairment of assets
|
10,284
|
|
|
3,012
|
|
|
7,272
|
|
|
>100%
|
|
|||
Other expense
|
16,276
|
|
|
3,182
|
|
|
13,094
|
|
|
>100%
|
|
|||
Total costs and expenses
|
272,306
|
|
|
148,869
|
|
|
123,437
|
|
|
83
|
%
|
|||
Loss on early extinguishment of debt, net
|
(3,315
|
)
|
|
(1,457
|
)
|
|
(1,858
|
)
|
|
>100%
|
|
|||
Earnings from equity method investments
|
5,515
|
|
|
39,447
|
|
|
(33,932
|
)
|
|
(86
|
)%
|
|||
Income tax (expense) benefit
|
(1,644
|
)
|
|
1,190
|
|
|
(2,834
|
)
|
|
>(100%)
|
|
|||
Income from discontinued operations
|
173
|
|
|
3,633
|
|
|
(3,460
|
)
|
|
(95
|
)%
|
|||
Gain from discontinued operations
|
123,418
|
|
|
—
|
|
|
123,418
|
|
|
100
|
%
|
|||
Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
100
|
%
|
|||
Income from sales of real estate
|
844
|
|
|
43,484
|
|
|
(42,640
|
)
|
|
(98
|
)%
|
|||
Net income
|
$
|
196,007
|
|
|
$
|
59,787
|
|
|
$
|
136,220
|
|
|
>100%
|
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Operating lease income
|
$
|
94,349
|
|
|
$
|
100,470
|
|
|
$
|
(6,121
|
)
|
|
(6
|
)%
|
Interest income
|
57,703
|
|
|
67,620
|
|
|
(9,917
|
)
|
|
(15
|
)%
|
|||
Other income
|
151,374
|
|
|
21,636
|
|
|
129,738
|
|
|
>100%
|
|
|||
Land development revenue
|
152,760
|
|
|
42,835
|
|
|
109,925
|
|
|
>100%
|
|
|||
Total revenue
|
456,186
|
|
|
232,561
|
|
|
223,625
|
|
|
96
|
%
|
|||
Interest expense
|
99,952
|
|
|
113,068
|
|
|
(13,116
|
)
|
|
(12
|
)%
|
|||
Real estate expense
|
70,274
|
|
|
69,572
|
|
|
702
|
|
|
1
|
%
|
|||
Land development cost of sales
|
138,376
|
|
|
28,838
|
|
|
109,538
|
|
|
>100%
|
|
|||
Depreciation and amortization
|
25,451
|
|
|
27,581
|
|
|
(2,130
|
)
|
|
(8
|
)%
|
|||
General and administrative
|
52,392
|
|
|
42,768
|
|
|
9,624
|
|
|
23
|
%
|
|||
(Recovery of) provision for loan losses
|
(5,528
|
)
|
|
2,206
|
|
|
(7,734
|
)
|
|
>(100%)
|
|
|||
Impairment of assets
|
14,696
|
|
|
3,012
|
|
|
11,684
|
|
|
>100%
|
|
|||
Other expense
|
18,145
|
|
|
3,922
|
|
|
14,223
|
|
|
>100%
|
|
|||
Total costs and expenses
|
413,758
|
|
|
290,967
|
|
|
122,791
|
|
|
42
|
%
|
|||
Loss on early extinguishment of debt, net
|
(3,525
|
)
|
|
(1,582
|
)
|
|
(1,943
|
)
|
|
>100%
|
|
|||
Earnings from equity method investments
|
11,217
|
|
|
47,714
|
|
|
(36,497
|
)
|
|
(76
|
)%
|
|||
Income tax (expense) benefit
|
(2,251
|
)
|
|
1,604
|
|
|
(3,855
|
)
|
|
>(100%)
|
|
|||
Income from discontinued operations
|
4,939
|
|
|
7,214
|
|
|
(2,275
|
)
|
|
(32
|
)%
|
|||
Gain from discontinued operations
|
123,418
|
|
|
—
|
|
|
123,418
|
|
|
100
|
%
|
|||
Income tax expense from discontinued operations
|
(4,545
|
)
|
|
—
|
|
|
(4,545
|
)
|
|
100
|
%
|
|||
Income from sales of real estate
|
8,954
|
|
|
53,943
|
|
|
(44,989
|
)
|
|
(83
|
)%
|
|||
Net income
|
$
|
180,635
|
|
|
$
|
50,487
|
|
|
$
|
130,148
|
|
|
>100%
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Adjusted Income
|
|
|
|
|
|
|
|
||||||||
Net income allocable to common shareholders
|
$
|
177,467
|
|
|
$
|
38,112
|
|
|
$
|
150,365
|
|
|
$
|
16,933
|
|
Add: Depreciation and amortization
(1)
|
15,620
|
|
|
17,335
|
|
|
30,672
|
|
|
34,508
|
|
||||
Add: (Recovery of) provision for loan losses
|
(600
|
)
|
|
700
|
|
|
(5,528
|
)
|
|
2,206
|
|
||||
Add: Impairment of assets
(2)
|
10,284
|
|
|
3,012
|
|
|
14,696
|
|
|
3,927
|
|
||||
Add: Stock-based compensation expense
|
3,915
|
|
|
1,633
|
|
|
9,796
|
|
|
6,211
|
|
||||
Add: Loss on early extinguishment of debt, net
|
565
|
|
|
1,457
|
|
|
775
|
|
|
1,582
|
|
||||
Less: Losses on charge-offs and dispositions
(3)
|
(8,811
|
)
|
|
(1,148
|
)
|
|
(14,127
|
)
|
|
(4,563
|
)
|
||||
Less: Participating Security allocation
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(28
|
)
|
||||
Adjusted income allocable to common shareholders
|
$
|
198,440
|
|
|
$
|
61,089
|
|
|
$
|
186,649
|
|
|
$
|
60,776
|
|
(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)
|
For the six months ended June 30, 2016, impairment of assets includes impairments on cost and equity method investments recorded in "Other income" and "Earnings from equity method investments," respectively, in our consolidated statements of operations.
|
(3)
|
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 Adjusted Income.
|
|
For the Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating Properties
|
$
|
14,957
|
|
|
$
|
33,367
|
|
Net Lease
|
1,389
|
|
|
2,307
|
|
||
Total capital expenditures on real estate assets
|
$
|
16,346
|
|
|
$
|
35,674
|
|
|
|
|
|
||||
Land and Development
|
$
|
53,894
|
|
|
$
|
58,961
|
|
Total capital expenditures on land and development assets
|
$
|
53,894
|
|
|
$
|
58,961
|
|
|
Amounts Due By Period
|
||||||||||||||||||||||
|
Total
|
|
Less Than 1
Year
|
|
1 - 3
Years
|
|
3 - 5
Years
|
|
5 - 10
Years
|
|
After 10
Years
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Long-Term Debt Obligations
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unsecured notes
|
$
|
2,570,000
|
|
|
$
|
550,000
|
|
|
$
|
1,370,000
|
|
|
$
|
650,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured credit facilities
|
498,750
|
|
|
5,000
|
|
|
10,000
|
|
|
483,750
|
|
|
—
|
|
|
—
|
|
||||||
Mortgages
|
225,624
|
|
|
17,916
|
|
|
39,703
|
|
|
118,190
|
|
|
49,815
|
|
|
—
|
|
||||||
Trust preferred securities
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
||||||
Total principal maturities
|
3,394,374
|
|
|
572,916
|
|
|
1,419,703
|
|
|
1,251,940
|
|
|
49,815
|
|
|
100,000
|
|
||||||
Interest Payable
(1)
|
522,435
|
|
|
172,191
|
|
|
221,258
|
|
|
89,214
|
|
|
15,634
|
|
|
24,138
|
|
||||||
Loan Participations Payable
(2)
|
107,842
|
|
|
102,461
|
|
|
5,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Operating Lease Obligations
|
20,414
|
|
|
5,766
|
|
|
7,973
|
|
|
3,761
|
|
|
2,914
|
|
|
—
|
|
||||||
Total
|
$
|
4,045,065
|
|
|
$
|
853,334
|
|
|
$
|
1,654,315
|
|
|
$
|
1,344,915
|
|
|
$
|
68,363
|
|
|
$
|
124,138
|
|
(1)
|
Variable-rate debt assumes 1-month LIBOR of
1.22%
and 3-month LIBOR of
1.30%
that were in effect as of
June 30, 2017
.
|
(2)
|
Refer to Note 9 to the consolidated financial statements.
|
|
As of
|
||||||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Encumbered Assets
|
|
Unencumbered Assets
|
|
Encumbered Assets
|
|
Unencumbered Assets
|
||||||||
Real estate, net
|
$
|
871,613
|
|
|
$
|
471,369
|
|
|
$
|
881,212
|
|
|
$
|
506,062
|
|
Real estate available and held for sale
|
—
|
|
|
68,045
|
|
|
—
|
|
|
237,531
|
|
||||
Land and development, net
|
25,100
|
|
|
830,397
|
|
|
35,165
|
|
|
910,400
|
|
||||
Loans receivable and other lending investments, net
(1)(2)
|
137,722
|
|
|
943,592
|
|
|
172,581
|
|
|
1,142,050
|
|
||||
Other investments
|
—
|
|
|
276,821
|
|
|
—
|
|
|
214,406
|
|
||||
Cash and other assets
|
—
|
|
|
1,200,845
|
|
|
—
|
|
|
590,299
|
|
||||
Total
|
$
|
1,034,435
|
|
|
$
|
3,791,069
|
|
|
$
|
1,088,958
|
|
|
$
|
3,600,748
|
|
(1)
|
As of
June 30, 2017
and
December 31, 2016
, the amounts presented exclude general reserves for loan losses of
$17.8 million
and
$23.3 million
,
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, the amounts presented exclude loan participations of
$107.1 million
and
$159.1 million
, respectively.
|
|
Loans and Other Lending Investments
(1)
|
|
Real Estate
|
|
Other
Investments
|
|
Total
|
||||||||
Performance-Based Commitments
|
$
|
313,615
|
|
|
$
|
7,886
|
|
|
$
|
21,420
|
|
|
$
|
342,921
|
|
Strategic Investments
|
—
|
|
|
—
|
|
|
45,634
|
|
|
45,634
|
|
||||
Total
(2)
|
$
|
313,615
|
|
|
$
|
7,886
|
|
|
$
|
67,054
|
|
|
$
|
388,555
|
|
(1)
|
Excludes
$130.3 million
of commitments on loan participations sold that are not our obligation.
|
(2)
|
We did not have any Discretionary Fundings as of
June 30, 2017
.
|
Change in Interest Rates
|
|
Net Income
(1)
|
||
-10 Basis Points
|
|
$
|
(1,003
|
)
|
Base Interest Rate
|
|
—
|
|
|
+10 Basis Points
|
|
1,003
|
|
|
+50 Basis Points
|
|
5,015
|
|
|
+100 Basis Points
|
|
10,030
|
|
(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
June 30, 2017
,
$459.9 million
of our floating rate loans have a cumulative weighted average interest rate floor of
0.3%
and
$606.6 million
of our floating rate debt has a cumulative weighted average interest rate floor of
0.9%
.
|
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of a Publicly Announced Plan
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans
(1)
|
||||||
April 1 to April 30
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
May 1 to May 31
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
June 1 to June 30
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
(1)
|
In August 2016, the Company's Board of Directors authorized an increase to
$50.0 million
in the stock repurchase program. The program authorizes the repurchase of common stock from time to time in open market and privately negotiated purchases, including pursuant to one or more trading plans. There is no fixed expiration date to this stock repurchase program.
|
Exhibit
Number
|
Document Description
|
10.1**
|
Management Agreement, dated as of June 27, 2017, among SFTY Manager LLC, Safety, Income and Growth, Inc. and Safety Income and Growth Operating Partnership LP.
|
10.2**
|
Exclusivity and Expense Reimbursement Agreement, dated as of June 27, 2017, among iStar Inc. and Safety, Income and Growth, Inc.
|
10.3**
|
Registration Rights Agreement, dated as of June 27, 2017, between iStar Inc. and Safety, Income and Growth, Inc.
|
10.4**
|
Option Purchase Agreement, dated as of June 27, 2017, between iStar Inc. and Safety Income and Growth Operating Partnership LP.
|
31.0
|
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
|
32.0
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.
|
101*
|
The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2017 is formatted in XBRL ("eXtensible Business Reporting Language"): (i) the Consolidated Balance Sheets as of June 30, 2017 (unaudited) and December 31, 2016, (ii) the Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2017 and 2016, (iii) the Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended June 30, 2017 and 2016, (iv) the Consolidated Statements of Changes in Equity (unaudited) for the six months ended June 30, 2017 and 2016, (v) the Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2017 and 2016 and (vi) the Notes to the Consolidated Financial Statements (unaudited).
|
*
|
In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections.
|
**
|
Incorporated by reference t the Current Report on Form 8-K filed by Safety, Income and Growth, Inc. on July 3, 2017 with the Securities and Exchange Commission. (File No. 001-38122)
|
|
|
iStar Inc.
Registrant
|
Date:
|
August 4, 2017
|
/s/ JAY SUGARMAN
|
|
|
Jay Sugarman
Chairman of the Board of Directors and Chief
Executive Officer (principal executive officer)
|
|
|
|
|
|
iStar Inc.
Registrant
|
Date:
|
August 4, 2017
|
/s/ GEOFFREY G. JERVIS
|
|
|
Geoffrey G. Jervis
Chief Operating Officer and Chief Financial Officer (principal financial and accounting officer)
|
Date:
|
August 4, 2017
|
By:
|
|
/s/ JAY SUGARMAN
|
||
|
|
|
|
Name:
|
|
Jay Sugarman
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
Date:
|
August 4, 2017
|
By:
|
|
/s/ GEOFFREY G. JERVIS
|
||
|
|
|
|
Name:
|
|
Geoffrey G. Jervis
|
|
|
|
|
Title:
|
|
Chief Financial Officer (principal financial and accounting officer)
|
Date:
|
August 4, 2017
|
By:
|
|
/s/ JAY SUGARMAN
|
||
|
|
|
|
Name:
|
|
Jay Sugarman
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
Date:
|
August 4, 2017
|
By:
|
|
/s/ GEOFFREY G. JERVIS
|
||
|
|
|
|
Name:
|
|
Geoffrey G. Jervis
|
|
|
|
|
Title:
|
|
Chief Financial Officer (principal financial and accounting officer)
|