|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
COLONY CREDIT REAL ESTATE, INC.
|
|
||
|
(Exact Name of Registrant as Specified in Its Charter)
|
|
||
|
|
|
|
|
|
Maryland
|
|
38-4046290
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A common stock, par value $0.01 per share
|
CLNC
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
•
|
Colony Credit Real Estate, Inc. and the consolidated CLNY Investment Entities for periods on or prior to the closing of the Combination on January 31, 2018; and
|
•
|
The combined operations of Colony Credit Real Estate, Inc., NorthStar I and NorthStar II beginning February 1, 2018, following the closing of the Combination.
|
|
||
Index
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
•
|
operating costs and business disruption may be greater than expected;
|
•
|
our operating results may differ materially from the information presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as in Colony Credit Real Estate’s other filings with the Securities and Exchange Commission;
|
•
|
the fair value of our investments may be subject to uncertainties;
|
•
|
our use of leverage could hinder our ability to make distributions and may significantly impact our liquidity position;
|
•
|
given our dependence on our external manager, an affiliate of Colony Capital, Inc., any adverse changes in the financial health or otherwise of our manager or Colony Capital, Inc. could hinder our operating performance and return on stockholder’s investment;
|
•
|
the ability to realize substantial efficiencies as well as anticipated strategic and financial benefits, including, but not limited to expected returns on equity and/or yields on investments;
|
•
|
adverse impacts on our liquidity, including our ability to continue to generate liquidity from sales of legacy, non-strategic assets;
|
•
|
our ability to liquidate our legacy, non-strategic assets within the projected timeframe or at the projected values;
|
•
|
the timing of and ability to deploy available capital;
|
•
|
our ability to maintain or grow the dividend at all in the future;
|
•
|
the timing of and ability to complete repurchases of our stock;
|
•
|
our ability to refinance certain mortgage debt on similar terms to those currently existing or at all;
|
•
|
and the impact of legislative, regulatory and competitive changes.
|
|
September 30, 2019 (Unaudited)
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
60,332
|
|
|
$
|
77,317
|
|
Restricted cash
|
139,549
|
|
|
110,146
|
|
||
Loans and preferred equity held for investment, net
|
2,516,197
|
|
|
2,020,497
|
|
||
Real estate securities, available for sale, at fair value
|
255,937
|
|
|
228,185
|
|
||
Real estate, net
|
1,568,682
|
|
|
1,959,690
|
|
||
Investments in unconsolidated ventures ($14,323 and $160,851 at fair value, respectively)
|
571,365
|
|
|
903,037
|
|
||
Receivables, net
|
42,559
|
|
|
48,806
|
|
||
Deferred leasing costs and intangible assets, net
|
125,072
|
|
|
134,068
|
|
||
Assets held for sale
|
183,895
|
|
|
—
|
|
||
Other assets
|
76,266
|
|
|
62,006
|
|
||
Mortgage loans held in securitization trusts, at fair value
|
1,904,003
|
|
|
3,116,978
|
|
||
Total assets
|
$
|
7,443,857
|
|
|
$
|
8,660,730
|
|
Liabilities
|
|
|
|
||||
Securitization bonds payable, net
|
$
|
—
|
|
|
$
|
81,372
|
|
Mortgage and other notes payable, net
|
1,245,721
|
|
|
1,173,019
|
|
||
Credit facilities
|
1,907,556
|
|
|
1,365,918
|
|
||
Due to related party (Note 11)
|
14,227
|
|
|
15,019
|
|
||
Accrued and other liabilities
|
138,024
|
|
|
106,187
|
|
||
Intangible liabilities, net
|
23,916
|
|
|
15,096
|
|
||
Liabilities related to assets held for sale
|
5,487
|
|
|
—
|
|
||
Escrow deposits payable
|
87,349
|
|
|
65,995
|
|
||
Dividends payable
|
19,087
|
|
|
18,986
|
|
||
Mortgage obligations issued by securitization trusts, at fair value
|
1,793,435
|
|
|
2,973,936
|
|
||
Total liabilities
|
5,234,802
|
|
|
5,815,528
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Equity
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value per share
|
|
|
|
||||
Class A, 950,000,000 and 905,000,000 shares authorized, 128,538,703 and 83,410,376 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
|
1,285
|
|
|
834
|
|
||
Class B-3, no shares authorized, issued and outstanding as of September 30, 2019 and 45,000,000 shares authorized and 44,399,444 shares issued and outstanding as of December 31, 2018
|
—
|
|
|
444
|
|
||
Additional paid-in capital
|
2,905,906
|
|
|
2,899,353
|
|
||
Accumulated deficit
|
(809,344
|
)
|
|
(193,327
|
)
|
||
Accumulated other comprehensive income (loss)
|
28,915
|
|
|
(399
|
)
|
||
Total stockholders’ equity
|
2,126,762
|
|
|
2,706,905
|
|
||
Noncontrolling interests in investment entities
|
31,410
|
|
|
72,683
|
|
||
Noncontrolling interests in the Operating Partnership
|
50,883
|
|
|
65,614
|
|
||
Total equity
|
2,209,055
|
|
|
2,845,202
|
|
||
Total liabilities and equity
|
$
|
7,443,857
|
|
|
$
|
8,660,730
|
|
|
September 30, 2019 (Unaudited)
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,877
|
|
|
$
|
12,561
|
|
Restricted cash
|
18,022
|
|
|
18,464
|
|
||
Loans and preferred equity held for investment, net
|
14,085
|
|
|
167,219
|
|
||
Real estate, net
|
392,147
|
|
|
547,444
|
|
||
Receivables, net
|
19,764
|
|
|
17,811
|
|
||
Deferred leasing costs and intangible assets, net
|
41,186
|
|
|
38,681
|
|
||
Assets held for sale
|
112,024
|
|
|
—
|
|
||
Other assets
|
28,437
|
|
|
1,698
|
|
||
Mortgage loans held in securitization trusts, at fair value
|
1,904,003
|
|
|
3,116,978
|
|
||
Total assets
|
$
|
2,543,545
|
|
|
$
|
3,920,856
|
|
Liabilities
|
|
|
|
||||
Securitization bonds payable, net
|
$
|
—
|
|
|
$
|
43,870
|
|
Mortgage and other notes payable, net
|
342,559
|
|
|
325,187
|
|
||
Credit facilities
|
23,124
|
|
|
—
|
|
||
Accrued and other liabilities
|
60,749
|
|
|
32,452
|
|
||
Intangible liabilities, net
|
21,727
|
|
|
11,993
|
|
||
Liabilities related to assets held for sale
|
5,487
|
|
|
—
|
|
||
Escrow deposits payable
|
5,796
|
|
|
9,603
|
|
||
Mortgage obligations issued by securitization trusts, at fair value
|
1,793,435
|
|
|
2,973,936
|
|
||
Total liabilities
|
$
|
2,252,877
|
|
|
$
|
3,397,041
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net interest income
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
46,991
|
|
|
$
|
40,139
|
|
|
$
|
127,473
|
|
|
$
|
113,073
|
|
Interest expense
|
|
(23,167
|
)
|
|
(13,148
|
)
|
|
(63,505
|
)
|
|
(30,266
|
)
|
||||
Interest income on mortgage loans held in securitization trusts
|
|
22,586
|
|
|
39,261
|
|
|
99,718
|
|
|
104,622
|
|
||||
Interest expense on mortgage obligations issued by securitization trusts
|
|
(20,299
|
)
|
|
(36,294
|
)
|
|
(91,690
|
)
|
|
(97,031
|
)
|
||||
Net interest income
|
|
26,111
|
|
|
29,958
|
|
|
71,996
|
|
|
90,398
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Property and other income
|
|
|
|
|
|
|
|
|
||||||||
Property operating income
|
|
63,492
|
|
|
51,684
|
|
|
191,393
|
|
|
119,706
|
|
||||
Other income
|
|
820
|
|
|
2,253
|
|
|
1,431
|
|
|
3,152
|
|
||||
Total property and other income
|
|
64,312
|
|
|
53,937
|
|
|
192,824
|
|
|
122,858
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Management fee expense
|
|
11,355
|
|
|
11,877
|
|
|
34,070
|
|
|
31,668
|
|
||||
Property operating expense
|
|
29,756
|
|
|
21,217
|
|
|
86,076
|
|
|
49,186
|
|
||||
Transaction, investment and servicing expense
|
|
1,433
|
|
|
3,631
|
|
|
3,013
|
|
|
38,212
|
|
||||
Interest expense on real estate
|
|
14,281
|
|
|
13,341
|
|
|
41,786
|
|
|
29,447
|
|
||||
Depreciation and amortization
|
|
25,934
|
|
|
30,538
|
|
|
82,853
|
|
|
72,689
|
|
||||
Provision for loan losses
|
|
110,314
|
|
|
35,059
|
|
|
220,572
|
|
|
34,542
|
|
||||
Impairment of operating real estate
|
|
272,722
|
|
|
29,378
|
|
|
282,846
|
|
|
29,378
|
|
||||
Administrative expense (including $2,910, $1,822, $7,466 and $3,905 of equity-based compensation expense, respectively)
|
|
7,732
|
|
|
6,797
|
|
|
22,395
|
|
|
16,909
|
|
||||
Total expenses
|
|
473,527
|
|
|
151,838
|
|
|
773,611
|
|
|
302,031
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
(1,976
|
)
|
|
(939
|
)
|
|
4,602
|
|
|
3,254
|
|
||||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
2,724
|
|
|
(549
|
)
|
|
2,772
|
|
|
(2,752
|
)
|
||||
Other loss, net
|
|
(2,688
|
)
|
|
(15
|
)
|
|
(13,829
|
)
|
|
460
|
|
||||
Loss before equity in earnings of unconsolidated ventures and income taxes
|
|
(385,044
|
)
|
|
(69,446
|
)
|
|
(515,246
|
)
|
|
(87,813
|
)
|
||||
Equity in earnings (loss) of unconsolidated ventures
|
|
(15,905
|
)
|
|
8,324
|
|
|
17,962
|
|
|
39,773
|
|
||||
Income tax benefit (expense)
|
|
(1,046
|
)
|
|
2,456
|
|
|
(544
|
)
|
|
2,847
|
|
||||
Net loss
|
|
(401,995
|
)
|
|
(58,666
|
)
|
|
(497,828
|
)
|
|
(45,193
|
)
|
||||
Net loss attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||||||
Investment entities
|
|
37,445
|
|
|
4,688
|
|
|
38,623
|
|
|
2,788
|
|
||||
Operating Partnership
|
|
8,519
|
|
|
1,275
|
|
|
10,741
|
|
|
996
|
|
||||
Net loss attributable to Colony Credit Real Estate, Inc. common stockholders
|
|
$
|
(356,031
|
)
|
|
$
|
(52,703
|
)
|
|
$
|
(448,464
|
)
|
|
$
|
(41,409
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common share - basic and diluted (Note 19)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(3.51
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding - basic and diluted (Note 19)
|
|
128,541
|
|
|
127,887
|
|
|
128,341
|
|
|
118,252
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss
|
|
$
|
(401,995
|
)
|
|
$
|
(58,666
|
)
|
|
$
|
(497,828
|
)
|
|
$
|
(45,193
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on real estate securities, available for sale
|
|
5,102
|
|
|
6,192
|
|
|
22,723
|
|
|
3,347
|
|
||||
Change in fair value of net investment hedges
|
|
12,791
|
|
|
(416
|
)
|
|
21,124
|
|
|
(416
|
)
|
||||
Foreign currency translation loss
|
|
(14,445
|
)
|
|
(402
|
)
|
|
(13,832
|
)
|
|
(402
|
)
|
||||
Total other comprehensive income
|
|
3,448
|
|
|
5,374
|
|
|
30,015
|
|
|
2,529
|
|
||||
Comprehensive loss
|
|
(398,547
|
)
|
|
(53,292
|
)
|
|
(467,813
|
)
|
|
(42,664
|
)
|
||||
Comprehensive (income) loss attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||||||
Investment entities
|
|
37,445
|
|
|
4,688
|
|
|
38,623
|
|
|
2,788
|
|
||||
Operating Partnership
|
|
8,439
|
|
|
1,148
|
|
|
10,040
|
|
|
936
|
|
||||
Comprehensive loss attributable to common stockholders
|
|
$
|
(352,663
|
)
|
|
$
|
(47,456
|
)
|
|
$
|
(419,150
|
)
|
|
$
|
(38,940
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders’ Equity |
|
|
Noncontrolling Interests in Investment Entities
|
|
Noncontrolling Interests in the Operating Partnership
|
|
Total
Equity
|
|
||||||||||||||||||||||||||
|
Class A
|
|
Class B-3
|
|
|||||||||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
821,031
|
|
|
$
|
258,777
|
|
|
$
|
—
|
|
|
$
|
1,079,808
|
|
|
|
$
|
327,762
|
|
|
$
|
—
|
|
|
$
|
1,407,570
|
|
|
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,003
|
)
|
|
—
|
|
|
(1,003
|
)
|
|
|||||||||
Adjustments related to the Combination
|
82,484
|
|
|
825
|
|
|
44,399
|
|
|
444
|
|
|
2,073,186
|
|
|
(79,774
|
)
|
|
—
|
|
|
1,994,681
|
|
|
|
(230,818
|
)
|
|
73,626
|
|
|
1,837,489
|
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
1,004
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
285
|
|
|
|
—
|
|
|
—
|
|
|
285
|
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,848
|
)
|
|
(1,848
|
)
|
|
|
—
|
|
|
—
|
|
|
(1,848
|
)
|
|
|||||||||
Dividends declared ($0.29 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,843
|
)
|
|
—
|
|
|
(37,843
|
)
|
|
|
—
|
|
|
—
|
|
|
(37,843
|
)
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,714
|
)
|
|
—
|
|
|
(4,714
|
)
|
|
|
2,370
|
|
|
(57
|
)
|
|
(2,401
|
)
|
|
|||||||||
Balance at March 31, 2018
|
83,488
|
|
|
$
|
835
|
|
|
44,399
|
|
|
$
|
444
|
|
|
$
|
2,894,492
|
|
|
$
|
136,446
|
|
|
$
|
(1,848
|
)
|
|
$
|
3,030,369
|
|
|
|
$
|
98,311
|
|
|
$
|
73,569
|
|
|
$
|
3,202,249
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|
|||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(928
|
)
|
|
—
|
|
|
(928
|
)
|
|
|||||||||
Adjustments related to the Combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,070
|
|
|
—
|
|
|
—
|
|
|
1,070
|
|
|
|
(47
|
)
|
|
—
|
|
|
1,023
|
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(930
|
)
|
|
(930
|
)
|
|
|
—
|
|
|
(67
|
)
|
|
(997
|
)
|
|
|||||||||
Dividends declared ($0.44 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,739
|
)
|
|
—
|
|
|
(54,739
|
)
|
|
|
—
|
|
|
(2,230
|
)
|
|
(56,969
|
)
|
|
|||||||||
Reallocation of equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(665
|
)
|
|
—
|
|
|
—
|
|
|
(665
|
)
|
|
|
—
|
|
|
665
|
|
|
—
|
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,008
|
|
|
—
|
|
|
16,008
|
|
|
|
(470
|
)
|
|
336
|
|
|
15,874
|
|
|
|||||||||
Balance at June 30, 2018
|
83,488
|
|
|
$
|
835
|
|
|
44,399
|
|
|
$
|
444
|
|
|
$
|
2,896,695
|
|
|
$
|
97,715
|
|
|
$
|
(2,778
|
)
|
|
$
|
2,992,911
|
|
|
|
$
|
96,953
|
|
|
$
|
72,273
|
|
|
$
|
3,162,137
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
|||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,297
|
)
|
|
—
|
|
|
(1,297
|
)
|
|
|||||||||
Adjustments related to the Combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,822
|
|
|
—
|
|
|
—
|
|
|
1,822
|
|
|
|
—
|
|
|
—
|
|
|
1,822
|
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,247
|
|
|
5,247
|
|
|
|
—
|
|
|
127
|
|
|
5,374
|
|
|
|||||||||
Dividends declared ($0.44 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,631
|
)
|
|
—
|
|
|
(55,631
|
)
|
|
|
—
|
|
|
(1,337
|
)
|
|
(56,968
|
)
|
|
|||||||||
Reallocation of equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(297
|
)
|
|
—
|
|
|
—
|
|
|
(297
|
)
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,703
|
)
|
|
—
|
|
|
(52,703
|
)
|
|
|
(4,688
|
)
|
|
(1,275
|
)
|
|
(58,666
|
)
|
|
|||||||||
Balance as of September 30, 2018
|
83,488
|
|
|
$
|
835
|
|
|
44,399
|
|
|
$
|
444
|
|
|
$
|
2,898,184
|
|
|
$
|
(10,619
|
)
|
|
$
|
2,469
|
|
|
$
|
2,891,313
|
|
|
|
$
|
90,989
|
|
|
$
|
70,085
|
|
|
$
|
3,052,387
|
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings (Accumulated Deficit) |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
Stockholders’ Equity |
|
|
Noncontrolling Interests in Investment Entities
|
|
Noncontrolling Interests in the Operating Partnership
|
|
Total
Equity |
|
||||||||||||||||||||||||||
|
Class A
|
|
Class B-3
|
|
|||||||||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||||||||||||
Balance at December 31, 2018
|
83,410
|
|
|
$
|
834
|
|
|
44,399
|
|
|
$
|
444
|
|
|
$
|
2,899,353
|
|
|
$
|
(193,327
|
)
|
|
$
|
(399
|
)
|
|
$
|
2,706,905
|
|
|
|
$
|
72,683
|
|
|
$
|
65,614
|
|
|
$
|
2,845,202
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
|||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(394
|
)
|
|
—
|
|
|
(394
|
)
|
|
|||||||||
Conversion of Class B-3 common stock
|
44,399
|
|
|
444
|
|
|
(44,399
|
)
|
|
(444
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
800
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
1,835
|
|
|
—
|
|
|
—
|
|
|
1,843
|
|
|
|
—
|
|
|
—
|
|
|
1,843
|
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,519
|
|
|
13,519
|
|
|
|
—
|
|
|
324
|
|
|
13,843
|
|
|
|||||||||
Dividends declared ($0.44 per Class A share and $0.15 per Class B-3 share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,726
|
)
|
|
—
|
|
|
(55,726
|
)
|
|
|
—
|
|
|
(1,340
|
)
|
|
(57,066
|
)
|
|
|||||||||
Shares canceled for tax withholding on vested stock awards
|
(96
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,496
|
)
|
|
—
|
|
|
—
|
|
|
(1,497
|
)
|
|
|
—
|
|
|
—
|
|
|
(1,497
|
)
|
|
|||||||||
Reallocation of equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,908
|
|
|
—
|
|
|
14,908
|
|
|
|
(298
|
)
|
|
347
|
|
|
14,957
|
|
|
|||||||||
Balance at March 31, 2019
|
128,513
|
|
|
$
|
1,285
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,899,669
|
|
|
$
|
(234,145
|
)
|
|
$
|
13,120
|
|
|
$
|
2,679,929
|
|
|
|
$
|
72,015
|
|
|
$
|
64,968
|
|
|
$
|
2,816,912
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
|||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,198
|
)
|
|
—
|
|
|
(1,198
|
)
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,713
|
|
|
—
|
|
|
—
|
|
|
2,713
|
|
|
|
—
|
|
|
—
|
|
|
2,713
|
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,427
|
|
|
12,427
|
|
|
|
—
|
|
|
297
|
|
|
12,724
|
|
|
|||||||||
Dividends declared ($0.44 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,912
|
)
|
|
—
|
|
|
(55,912
|
)
|
|
|
—
|
|
|
(1,342
|
)
|
|
(57,254
|
)
|
|
|||||||||
Shares canceled for tax withholding on vested stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||
Reallocation of equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
744
|
|
|
—
|
|
|
—
|
|
|
744
|
|
|
|
—
|
|
|
(744
|
)
|
|
—
|
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107,341
|
)
|
|
—
|
|
|
(107,341
|
)
|
|
|
(880
|
)
|
|
(2,569
|
)
|
|
(110,790
|
)
|
|
|||||||||
Balance at June 30, 2019
|
128,545
|
|
|
$
|
1,285
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,903,126
|
|
|
$
|
(397,398
|
)
|
|
$
|
25,547
|
|
|
$
|
2,532,560
|
|
|
|
$
|
69,948
|
|
|
$
|
60,610
|
|
|
$
|
2,663,118
|
|
|
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
|||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,110
|
)
|
|
—
|
|
|
(1,110
|
)
|
|
|||||||||
Issuance and amortization of equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,910
|
|
|
—
|
|
|
—
|
|
|
2,910
|
|
|
|
—
|
|
|
—
|
|
|
2,910
|
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,368
|
|
|
3,368
|
|
|
|
—
|
|
|
80
|
|
|
3,448
|
|
|
|||||||||
Dividends declared ($0.44 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,915
|
)
|
|
—
|
|
|
(55,915
|
)
|
|
|
—
|
|
|
(1,338
|
)
|
|
(57,253
|
)
|
|
|||||||||
Shares canceled for tax withholding on vested stock awards
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
|||||||||
Reallocation of equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(356,031
|
)
|
|
—
|
|
|
(356,031
|
)
|
|
|
(37,445
|
)
|
|
(8,519
|
)
|
|
(401,995
|
)
|
|
|||||||||
Balance at September 30, 2019
|
128,539
|
|
|
$
|
1,285
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,905,906
|
|
|
$
|
(809,344
|
)
|
|
$
|
28,915
|
|
|
$
|
2,126,762
|
|
|
|
$
|
31,410
|
|
|
$
|
50,883
|
|
|
$
|
2,209,055
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(497,828
|
)
|
|
$
|
(45,193
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Equity in earnings of unconsolidated ventures
|
(17,962
|
)
|
|
(39,773
|
)
|
||
Depreciation and amortization
|
82,853
|
|
|
72,689
|
|
||
Straight-line rental income
|
(5,049
|
)
|
|
(3,659
|
)
|
||
Amortization of above/below market lease values, net
|
(2,401
|
)
|
|
486
|
|
||
Amortization of premium/accretion of discount and fees on investments and borrowings, net
|
(9,239
|
)
|
|
(5,628
|
)
|
||
Amortization of deferred financing costs
|
6,803
|
|
|
3,051
|
|
||
Amortization of right-of-use lease assets and operating lease liabilities
|
73
|
|
|
—
|
|
||
Paid-in-kind interest added to loan principal, net of interest received
|
(5,634
|
)
|
|
(3,242
|
)
|
||
Distributions of cumulative earnings from unconsolidated ventures
|
53,509
|
|
|
34,682
|
|
||
Unrealized gain on mortgage loans and obligations held in securitization trusts, net
|
(4,602
|
)
|
|
(3,254
|
)
|
||
Realized (gain) loss on mortgage loans and obligations held in securitization trusts, net
|
(2,772
|
)
|
|
2,752
|
|
||
Provision for loan loss
|
220,572
|
|
|
34,542
|
|
||
Impairment of operating real estate
|
282,846
|
|
|
29,378
|
|
||
Amortization of equity-based compensation
|
7,466
|
|
|
3,905
|
|
||
Mortgage notes above/below market value amortization
|
276
|
|
|
(725
|
)
|
||
Deferred income tax (benefit) expense
|
(3,298
|
)
|
|
(4,047
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables, net
|
(1,097
|
)
|
|
12,153
|
|
||
Deferred costs and other assets
|
718
|
|
|
(39,151
|
)
|
||
Due to related party
|
(792
|
)
|
|
5,272
|
|
||
Other liabilities
|
8,763
|
|
|
10,156
|
|
||
Net cash provided by operating activities
|
113,205
|
|
|
64,394
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition, origination and funding of loans and preferred equity held for investment, net
|
(1,250,018
|
)
|
|
(524,230
|
)
|
||
Repayment on loans and preferred equity held for investment
|
426,438
|
|
|
414,096
|
|
||
Cash and restricted cash received in the Combination
|
—
|
|
|
302,342
|
|
||
Cash and restricted cash received related to foreclosure of loans held for investment
|
3,436
|
|
|
4,900
|
|
||
Acquisition of and additions to real estate, related intangibles and leasing commissions
|
(16,773
|
)
|
|
(408,546
|
)
|
||
Investments in unconsolidated ventures
|
(28,344
|
)
|
|
(72,879
|
)
|
||
Proceeds from sale of investments in unconsolidated ventures
|
115,298
|
|
|
—
|
|
||
Distributions in excess of cumulative earnings from unconsolidated ventures
|
202,732
|
|
|
82,130
|
|
||
Acquisition of real estate securities, available for sale
|
—
|
|
|
(52,567
|
)
|
||
Proceeds from sale of mortgage loans held in securitization trusts
|
39,848
|
|
|
—
|
|
||
Net receipts on settlement of derivative instruments
|
27,699
|
|
|
—
|
|
||
Deposit on investments
|
(372
|
)
|
|
(28,667
|
)
|
||
Change in escrow deposits
|
20,817
|
|
|
4,299
|
|
||
Net cash used in investing activities
|
(459,239
|
)
|
|
(279,122
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Distributions paid on common stock
|
(167,452
|
)
|
|
(129,221
|
)
|
||
Distributions paid on common stock to noncontrolling interests
|
(4,020
|
)
|
|
(3,567
|
)
|
||
Shares canceled for tax withholding on vested stock awards
|
(1,576
|
)
|
|
—
|
|
||
Borrowings from mortgage notes
|
85,660
|
|
|
245,039
|
|
||
Repayment of mortgage notes
|
(4,448
|
)
|
|
(43,165
|
)
|
||
Borrowings from credit facilities
|
1,830,412
|
|
|
920,829
|
|
||
Repayment of credit facilities
|
(1,288,773
|
)
|
|
(547,379
|
)
|
||
Repayment of securitization bonds
|
(81,372
|
)
|
|
(108,246
|
)
|
||
Payment of deferred financing costs
|
(7,413
|
)
|
|
(11,251
|
)
|
||
Contributions from noncontrolling interests
|
52
|
|
|
108
|
|
||
Distributions to noncontrolling interests
|
(2,702
|
)
|
|
(3,228
|
)
|
||
Net cash provided by financing activities
|
358,368
|
|
|
319,919
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
84
|
|
|
(44
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
12,418
|
|
|
105,147
|
|
||
Cash, cash equivalents and restricted cash - beginning of period
|
187,463
|
|
|
67,105
|
|
||
Cash, cash equivalents and restricted cash - end of period
|
$
|
199,881
|
|
|
$
|
172,252
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheets
|
|
|
|
||||
Beginning of the period
|
|
|
|
||||
Cash and cash equivalents
|
$
|
77,317
|
|
|
$
|
25,204
|
|
Restricted cash
|
110,146
|
|
|
41,901
|
|
||
Total cash, cash equivalents and restricted cash, beginning of period
|
$
|
187,463
|
|
|
$
|
67,105
|
|
|
|
|
|
||||
End of the period
|
|
|
|
||||
Cash and cash equivalents
|
$
|
60,332
|
|
|
$
|
56,289
|
|
Restricted cash
|
139,549
|
|
|
115,963
|
|
||
Total cash, cash equivalents and restricted cash, end of period
|
$
|
199,881
|
|
|
$
|
172,252
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Assets acquired in the Combination
|
$
|
—
|
|
|
$
|
6,916,046
|
|
Liabilities assumed in the Combination
|
—
|
|
|
4,812,353
|
|
||
Noncontrolling interests assumed in the Combination
|
—
|
|
|
82,320
|
|
||
Common stock issued for acquisition of NorthStar I and NorthStar II (Note 3)
|
—
|
|
|
2,021,373
|
|
||
Consolidation of certain CLNY Contributed Portfolio investments (Note 2)
|
—
|
|
|
313,133
|
|
||
Secured Financing
|
—
|
|
|
50,314
|
|
||
Other Payables to Manager adjustment (refer to Note 11)
|
—
|
|
|
2,934
|
|
||
Noncontrolling interests in the Operating Partnership
|
—
|
|
|
73,626
|
|
||
Consolidation of securitization trust (VIE asset / liability)
|
59,126
|
|
|
203,475
|
|
||
Deconsolidation of securitization trust (VIE asset / liability)
|
(1,239,627
|
)
|
|
—
|
|
||
Accrual of distribution payable
|
19,087
|
|
|
18,992
|
|
||
Foreclosure of loans held for investment, net of provision for loan loss
|
127,356
|
|
|
117,878
|
|
||
Right-of-use lease assets and operating lease liabilities
|
26,781
|
|
|
—
|
|
||
Assets transferred to held for sale (Note 7)
|
183,895
|
|
|
172,200
|
|
||
Liabilities related to assets held for sale (Note to 7)
|
5,487
|
|
|
324
|
|
||
Acquisition of real estate under long term obligations
|
|
|
236,111
|
|
|||
Conversion of Class B-3 common stock to Class A common stock
|
444
|
|
|
—
|
|
1.
|
Business and Organization
|
2.
|
Summary of Significant Accounting Policies
|
|
|
Carrying Value
|
|
Maximum Exposure to Loss
|
||||
Real estate securities, available for sale
|
|
$
|
255,937
|
|
|
$
|
234,543
|
|
Investments in unconsolidated ventures
|
|
449,033
|
|
|
516,578
|
|
||
Loans and preferred equity held for investment, net
|
|
69,569
|
|
|
69,569
|
|
||
Total assets
|
|
$
|
774,539
|
|
|
$
|
820,690
|
|
|
As of the Closing Date
|
||
Assets
|
|
||
Cash and cash equivalents
|
$
|
(11,408
|
)
|
Restricted cash
|
(14,704
|
)
|
|
Loans and preferred equity held for investment, net
|
(553,678
|
)
|
|
Investments in unconsolidated ventures
|
127,062
|
|
|
Receivables, net
|
(4,344
|
)
|
|
Other assets
|
(114
|
)
|
|
Total assets
|
$
|
(457,186
|
)
|
Liabilities
|
|
||
Mortgage and other notes payable, net
|
$
|
(128,709
|
)
|
Accrued and other liabilities
|
(640
|
)
|
|
Escrow deposits payable
|
(14,704
|
)
|
|
Total liabilities
|
(144,053
|
)
|
|
|
|
||
Stockholders’ equity
|
(313,133
|
)
|
|
Total liabilities and equity
|
$
|
(457,186
|
)
|
Real Estate Assets
|
|
Term
|
Building (fee interest)
|
|
7 to 48 years
|
Building leasehold interests
|
|
Lesser of remaining term of the lease or remaining life of the building
|
Building improvements
|
|
Lesser of the useful life or remaining life of the building
|
Land improvements
|
|
1 to 15 years
|
Tenant improvements
|
|
Lesser of the useful life or remaining term of the lease
|
Furniture, fixtures and equipment
|
|
2 to 8 years
|
|
|
Nine Months Ended September 30, 2018
|
||||||
(In thousands)
|
|
As previously Reported
|
|
After Adoption of ASU 2016-18
|
||||
Net cash provided by operating activities
|
|
$
|
59,855
|
|
|
$
|
64,394
|
|
Net cash used in investing activities
|
|
(348,645
|
)
|
|
(279,122
|
)
|
||
Net cash provided by financing activities
|
|
319,919
|
|
|
319,919
|
|
3.
|
Business Combination
|
|
|
NorthStar I
|
|
NorthStar II
|
|
Total
|
||||||
Outstanding shares of common stock at January 31, 2018(1)
|
|
119,333
|
|
|
114,943
|
|
|
|
||||
Exchange ratio(2)
|
|
0.3532
|
|
|
0.3511
|
|
|
|
||||
Shares of Class A common stock issued in the mergers(3)
|
|
42,149
|
|
|
40,356
|
|
|
82,505
|
|
|||
Fair value consideration per share(4)
|
|
$
|
24.50
|
|
|
$
|
24.50
|
|
|
$
|
24.50
|
|
Fair value of NorthStar I and NorthStar II consideration
|
|
$
|
1,032,651
|
|
|
$
|
988,722
|
|
|
$
|
2,021,373
|
|
(1)
|
Includes 21,000 and 25,000 shares of common stock of NorthStar I and NorthStar II equity awards, respectively, that vested in connection with the consummation of the Combination.
|
(2)
|
Represents the pre-determined exchange ratio of 0.3532 NorthStar I shares and 0.3511 NorthStar II shares per one share of the Class A common stock.
|
(3)
|
Includes the issuance of fractional shares, aggregating to approximately 21,000 shares, for which holders received cash in lieu of the fractional shares.
|
(4)
|
Represents the estimated per share fair value of the Company at the Closing Date.
|
|
|
Final Adjusted Amounts at December 31, 2018
|
||||||||||
|
|
NorthStar I
|
|
NorthStar II
|
|
Total
|
||||||
Merger consideration
|
|
$
|
1,032,651
|
|
|
$
|
988,722
|
|
|
$
|
2,021,373
|
|
Allocation of merger consideration:
|
|
|
|
|
|
|
||||||
Assets acquired
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
130,197
|
|
|
$
|
51,360
|
|
|
$
|
181,557
|
|
Restricted cash
|
|
30,564
|
|
|
61,313
|
|
|
91,877
|
|
|||
Loans and preferred equity held for investment
|
|
521,462
|
|
|
728,271
|
|
|
1,249,733
|
|
|||
Real estate securities, available for sale, at fair value
|
|
100,731
|
|
|
64,793
|
|
|
165,524
|
|
|||
Real estate, net
|
|
792,999
|
|
|
494,324
|
|
|
1,287,323
|
|
|||
Investments in unconsolidated ventures
|
|
67,899
|
|
|
375,694
|
|
|
443,593
|
|
|||
Receivables, net
|
|
12,363
|
|
|
11,479
|
|
|
23,842
|
|
|||
Deferred leasing costs and intangible assets, net
|
|
74,243
|
|
|
37,090
|
|
|
111,333
|
|
|||
Other assets
|
|
18,666
|
|
|
24,401
|
|
|
43,067
|
|
|||
Mortgage loans held in securitization trusts, at fair value
|
|
1,894,404
|
|
|
1,432,795
|
|
|
3,327,199
|
|
|||
Total assets acquired
|
|
3,643,528
|
|
|
3,281,520
|
|
|
6,925,048
|
|
|||
Liabilities assumed
|
|
|
|
|
|
|
||||||
Securitization bonds payable, net
|
|
—
|
|
|
80,825
|
|
|
80,825
|
|
|||
Mortgage and other notes payable, net
|
|
399,131
|
|
|
382,485
|
|
|
781,616
|
|
|||
Credit facilities
|
|
293,340
|
|
|
355,529
|
|
|
648,869
|
|
|||
Due to related party
|
|
4,533
|
|
|
1,842
|
|
|
6,375
|
|
|||
Accrued and other liabilities
|
|
25,680
|
|
|
22,959
|
|
|
48,639
|
|
|||
Intangible liabilities, net
|
|
17,931
|
|
|
1,808
|
|
|
19,739
|
|
|||
Escrow deposits payable
|
|
12,994
|
|
|
36,362
|
|
|
49,356
|
|
|||
Mortgage obligations issued by securitization trusts, at fair value
|
|
1,784,223
|
|
|
1,401,491
|
|
|
3,185,714
|
|
|||
Total liabilities assumed
|
|
2,537,832
|
|
|
2,283,301
|
|
|
4,821,133
|
|
|||
Noncontrolling interests
|
|
73,045
|
|
|
9,497
|
|
|
82,542
|
|
|||
Fair value of net assets acquired
|
|
$
|
1,032,651
|
|
|
$
|
988,722
|
|
|
$
|
2,021,373
|
|
4.
|
Loans and Preferred Equity Held for Investment, net
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||
|
|
Unpaid Principal Balance
|
|
Carrying
Value
|
|
Weighted Average Coupon(1)
|
|
Weighted Average Maturity in Years
|
|
Unpaid Principal Balance
|
|
Carrying
Value
|
|
Weighted Average Coupon(1)
|
|
Weighted Average Maturity in Years
|
||||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mezzanine loans
|
|
$
|
224,597
|
|
|
$
|
223,868
|
|
|
12.6
|
%
|
|
4.4
|
|
$
|
175,448
|
|
|
$
|
174,830
|
|
|
12.7
|
%
|
|
4.9
|
Preferred equity interests
|
|
115,973
|
|
|
115,877
|
|
|
12.5
|
%
|
|
7.1
|
|
113,860
|
|
|
113,687
|
|
|
12.6
|
%
|
|
7.7
|
||||
Other loans(2)
|
|
11,333
|
|
|
11,197
|
|
|
15.0
|
%
|
|
4.7
|
|
15,000
|
|
|
15,000
|
|
|
16.0
|
%
|
|
0.5
|
||||
|
|
351,903
|
|
|
350,942
|
|
|
|
|
|
|
304,308
|
|
|
303,517
|
|
|
|
|
|
||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior loans
|
|
2,417,097
|
|
|
2,407,618
|
|
|
5.8
|
%
|
|
4.2
|
|
1,432,416
|
|
|
1,430,635
|
|
|
6.3
|
%
|
|
4.2
|
||||
Securitized loans(3)
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
0.0
|
|
302,868
|
|
|
305,106
|
|
|
7.9
|
%
|
|
1.1
|
||||
Mezzanine loans
|
|
40,698
|
|
|
40,845
|
|
|
11.1
|
%
|
|
2.4
|
|
90,265
|
|
|
90,567
|
|
|
12.2
|
%
|
|
2.0
|
||||
|
|
2,457,795
|
|
|
2,448,463
|
|
|
|
|
|
|
1,825,549
|
|
|
1,826,308
|
|
|
|
|
|
||||||
|
|
2,809,698
|
|
|
2,799,405
|
|
|
|
|
|
|
2,129,857
|
|
|
2,129,825
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses(4)
|
|
NA
|
|
|
(283,208
|
)
|
|
|
|
|
|
NA
|
|
|
(109,328
|
)
|
|
|
|
|
||||||
Loans and preferred equity held for investment, net
|
|
$
|
2,809,698
|
|
|
$
|
2,516,197
|
|
|
|
|
|
|
$
|
2,129,857
|
|
|
$
|
2,020,497
|
|
|
|
|
|
(1)
|
Calculated based on contractual interest rate.
|
(2)
|
Includes one corporate term loan secured by the borrower’s limited partnership interests in a fund.
|
(3)
|
Represents loans transferred into securitization trusts that are consolidated by the Company.
|
(4)
|
At December 31, 2018, allowance for loan losses does not include $5.1 million of provision for loan loss associated with a receivable for operating expenses paid by the Company on the borrower’s behalf in connection with four loans for which the Company took ownership of the underlying collateral in January 2019.
|
|
|
Carrying Value
|
||
Balance at January 1, 2019
|
|
$
|
2,020,497
|
|
Acquisitions/originations/additional funding
|
|
1,250,018
|
|
|
Loan maturities/principal repayments
|
|
(419,906
|
)
|
|
Foreclosure of loans held for investment
|
|
(174,048
|
)
|
|
Discount accretion/premium amortization
|
|
4,211
|
|
|
Capitalized interest
|
|
9,304
|
|
|
Change in allowance for loan loss
|
|
(173,879
|
)
|
|
Balance at September 30, 2019
|
|
$
|
2,516,197
|
|
•
|
During 2018, the Company recorded $23.8 million of provision for loan losses for two separate borrowers on three of the Company’s regional mall loans that are secured by two regional malls (“Northeast Regional Mall A” and “Northeast Regional Mall B”) to reflect the estimated fair value of the collateral. In June 2019, the Company completed foreclosure proceedings on two loans secured by Northeast Regional Mall A with unpaid principal balances of $36.9 million. See Note 7, “Real estate, net and Real Estate Held for Sale” for further information.
|
•
|
During the three and nine months ended September 30, 2019, the Company recognized additional provisions for loan loss of $6.5 million and $10.5 million, respectively, on Northeast Regional Mall B. The additional provisions are based on current and prospective leasing activity to reflect the estimated fair value of the collateral. Interest payments are current and the Company has been and is continuing to sweep all cash.
|
•
|
Also, during three and nine months ended September 30, 2019, the Company separately recognized provisions for loan loss of $16.5 million and $18.5 million, respectively, on two loans secured by one regional mall (“West Regional Mall”) to reflect the estimated fair value of the collateral. Interest payments are current and the Company has been and is continuing to sweep all cash.
|
•
|
Furthermore, during the three months ended September 30, 2019, the Company recognized a $37.3 million provision for loan loss on four loans to three separate borrowers (“South Regional Mall A”, “South Regional Mall B”, and “Midwest Regional Mall”) to reflect the estimated fair value of the collateral. Interest payments for South Regional Mall A, South Regional Mall B and Midwest Regional Mall are all current. The Company has been and is continuing to sweep all cash related to South Regional Mall A and South Regional Mall B.
|
|
|
Current or Less Than 30 Days Past Due
|
|
30-59 Days Past Due
|
|
60-89 Days Past Due
|
|
90 Days or More Past Due(1)
|
|
Total Loans
|
||||||||||
September 30, 2019
|
|
$
|
2,541,276
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
258,129
|
|
|
$
|
2,799,405
|
|
December 31, 2018
|
|
1,632,817
|
|
|
58,751
|
|
|
42,995
|
|
|
395,262
|
|
|
2,129,825
|
|
(1)
|
At September 30, 2019, 90 days or more past due loans includes four loans to the same borrower and secured by the same collateral with combined carrying value before allowance for loan losses of $258.1 million on nonaccrual status. All other loans in this table remain current on interest payments.
|
|
|
Unpaid Principal Balance(1)
|
|
Gross Carrying Value
|
|
|
||||||||||||||
|
|
|
With Allowance for Loan Losses(2)
|
|
Without Allowance for Loan Losses
|
|
Total(2)
|
|
Allowance for Loan Losses(3)
|
|||||||||||
September 30, 2019
|
|
$
|
392,109
|
|
|
$
|
393,448
|
|
|
$
|
—
|
|
|
$
|
393,448
|
|
|
$
|
283,208
|
|
December 31, 2018
|
|
456,703
|
|
|
458,942
|
|
|
—
|
|
|
458,942
|
|
|
109,328
|
|
(1)
|
At September 30, 2019, includes four loans to the same borrower and secured by the same collateral with combined unpaid principal balance of $257.2 million and gross carrying value of $258.1 million on nonaccrual status. All other loans included in this table remain current on interest payments.
|
(2)
|
Includes unpaid principal balance plus any applicable exit fees less net deferred loan fees.
|
(3)
|
At December 31, 2018, allowance for loan losses does not include $5.1 million of provision for loan loss associated with a receivable for operating expenses paid by the Company on the borrower’s behalf in connection with four loans for which the Company took possession of the underlying collateral in January 2019.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Average carrying value before allowance for loan losses
|
|
$
|
356,753
|
|
|
$
|
480,547
|
|
|
$
|
426,195
|
|
|
$
|
407,835
|
|
Interest income
|
|
2,737
|
|
|
5,886
|
|
|
8,282
|
|
|
16,541
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Allowance for loan losses at beginning of period
|
|
$
|
109,328
|
|
|
$
|
517
|
|
Provision for loan losses
|
|
220,572
|
|
|
35,059
|
|
||
Charge-off
|
|
(46,692
|
)
|
|
—
|
|
||
Recoveries
|
|
—
|
|
|
(517
|
)
|
||
Allowance for loan losses at end of period
|
|
$
|
283,208
|
|
|
$
|
35,059
|
|
5.
|
Investments in Unconsolidated Ventures
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Equity method investments
|
|
$
|
557,042
|
|
|
$
|
742,186
|
|
Investments under fair value option
|
|
14,323
|
|
|
160,851
|
|
||
Investments in Unconsolidated Ventures
|
|
$
|
571,365
|
|
|
$
|
903,037
|
|
|
|
|
|
Carrying Value
|
||||||
Investments
|
|
Description
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
ADC investments(1)(2)
|
|
Interests in four acquisition, development and construction loans in which the Company participates in residual profits from the projects, and the risk and rewards of the arrangements are more similar to those associated with investments in joint ventures
|
|
$
|
65,025
|
|
|
$
|
165,823
|
|
Other investment ventures(1)
|
|
Interests in fifteen investments, each with less than $167.4 million carrying value at September 30, 2019
|
|
492,017
|
|
|
576,363
|
|
(1)
|
The Company’s ownership interest in ADC investments and other investment ventures varies and represents capital contributed to date and may not be reflective of the Company’s economic interest in the entity because of provisions in operating agreements governing various matters, such as classes of partner or member interests, allocations of profits and losses, preferential returns and guaranty of debt. Each equity method investment has been determined to be a VIE for which the Company was not deemed to be the primary beneficiary or a voting interest entity in which the Company does not have the power to control through a majority of voting interest or through other arrangements.
|
(2)
|
The Company owns varying levels of stated equity interests in certain ADC investments, as well as profit participation interests in real estate ventures without a stated ownership interest in other ADC investments.
|
6.
|
Real Estate Securities, Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
||||||||||||||||
|
|
|
Principal
Amount(1) |
|
Total Discount
|
|
Amortized
Cost |
|
Cumulative Unrealized
on Investments |
Fair
Value |
|
Coupon(2)
|
|
Unleveraged
Current Yield |
|||||||||||||||||
As of Date:
|
Count
|
|
Gain
|
|
(Loss)
|
|
|
|
|||||||||||||||||||||||
September 30, 2019
|
43
|
|
$
|
292,284
|
|
|
$
|
(57,743
|
)
|
|
$
|
234,541
|
|
|
$
|
21,757
|
|
|
$
|
(361
|
)
|
|
$
|
255,937
|
|
|
3.19
|
%
|
|
7.12
|
%
|
December 31, 2018
|
43
|
|
292,284
|
|
|
(62,772
|
)
|
|
229,512
|
|
|
2,167
|
|
|
(3,494
|
)
|
|
228,185
|
|
|
3.19
|
%
|
|
7.10
|
%
|
(1)
|
CRE securities serve as collateral for financing transactions including carrying value of $254.1 million for the CMBS Credit Facilities (refer to Note 10). The remainder is unleveraged.
|
(2)
|
All CMBS are fixed rate.
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
||||
Mortgage loans held in a securitization trust, at fair value
|
|
$
|
1,904,003
|
|
|
$
|
3,116,978
|
|
Receivables, net
|
|
6,939
|
|
|
13,178
|
|
||
Total assets
|
|
$
|
1,910,942
|
|
|
$
|
3,130,156
|
|
Liabilities
|
|
|
|
|
||||
Mortgage obligations issued by a securitization trust, at fair value
|
|
$
|
1,793,435
|
|
|
$
|
2,973,936
|
|
Accrued and other liabilities
|
|
6,281
|
|
|
12,233
|
|
||
Total liabilities
|
|
$
|
1,799,716
|
|
|
$
|
2,986,169
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018(1)
|
||||||||
Statement of Operations
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
$
|
(220
|
)
|
|
$
|
—
|
|
|
$
|
(761
|
)
|
|
$
|
—
|
|
Interest income on mortgage loans held in securitization trusts
|
|
22,586
|
|
|
39,261
|
|
|
99,718
|
|
|
104,622
|
|
||||
Interest expense on mortgage obligations issued by securitization trusts
|
|
(20,299
|
)
|
|
(36,294
|
)
|
|
(91,690
|
)
|
|
(97,031
|
)
|
||||
Net interest income
|
|
2,067
|
|
|
2,967
|
|
|
7,267
|
|
|
7,591
|
|
||||
Administrative expense
|
|
(225
|
)
|
|
(383
|
)
|
|
(915
|
)
|
|
(745
|
)
|
||||
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
(1,976
|
)
|
|
(939
|
)
|
|
4,602
|
|
|
3,254
|
|
||||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
2,724
|
|
|
(549
|
)
|
|
2,772
|
|
|
(2,752
|
)
|
||||
Net income attributable to Colony Credit Real Estate, Inc. common stockholders
|
|
$
|
2,590
|
|
|
$
|
1,096
|
|
|
$
|
13,726
|
|
|
$
|
7,348
|
|
(1)
|
The net income attributable to the Company’s stockholders for the nine months ended September 30, 2018, reflects only eight months of activity, as the Company’s investments in the subordinate tranches of the securitization trusts were acquired from NorthStar I and NorthStar II in the Combination on February 1, 2018.
|
7.
|
Real Estate, net and Real Estate Held for Sale
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Land and improvements
|
|
$
|
207,896
|
|
|
$
|
226,141
|
|
Buildings, building leaseholds, and improvements
|
|
891,178
|
|
|
1,010,339
|
|
||
Tenant improvements
|
|
23,682
|
|
|
24,060
|
|
||
Construction-in-progress
|
|
417
|
|
|
437
|
|
||
Subtotal
|
|
$
|
1,123,173
|
|
|
$
|
1,260,977
|
|
Less: Accumulated depreciation
|
|
(54,872
|
)
|
|
(34,532
|
)
|
||
Less: Impairment(1)
|
|
(23,911
|
)
|
|
(7,094
|
)
|
||
Net lease portfolio, net
|
|
$
|
1,044,390
|
|
|
$
|
1,219,351
|
|
(1)
|
See Note 15, “Fair Value,” for discussion of impairment of real estate.
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Land and improvements
|
|
$
|
118,762
|
|
|
$
|
113,495
|
|
Buildings, building leaseholds, and improvements
|
|
627,364
|
|
|
627,612
|
|
||
Tenant improvements
|
|
39,566
|
|
|
24,001
|
|
||
Furniture, fixtures and equipment
|
|
7,369
|
|
|
17,910
|
|
||
Construction-in-progress
|
|
7,993
|
|
|
2,635
|
|
||
Subtotal
|
|
$
|
801,054
|
|
|
$
|
785,653
|
|
Less: Accumulated depreciation
|
|
(49,246
|
)
|
|
(23,030
|
)
|
||
Less: Impairment(1)
|
|
(227,516
|
)
|
|
(22,284
|
)
|
||
Other portfolio, net
|
|
$
|
524,292
|
|
|
$
|
740,339
|
|
(1)
|
See Note 15, “Fair Value,” for discussion of impairment of real estate.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
|
|
2019
|
|
2019
|
||||
Lease revenues(1)
|
|
|
|
|
||||
Minimum lease revenue
|
|
$
|
45,555
|
|
|
$
|
135,198
|
|
Variable lease revenue
|
|
6,304
|
|
|
18,478
|
|
||
|
|
$
|
51,859
|
|
|
$
|
153,676
|
|
Hotel operating income
|
|
10,802
|
|
|
35,324
|
|
||
|
|
$
|
62,661
|
|
|
$
|
189,000
|
|
(1)
|
Excludes net amortization income related to above and below-market leases of $0.8 million and $2.4 million for the three and nine months ended September 30, 2019, respectively.
|
Remainder of 2019
|
|
$
|
50,754
|
|
2020
|
|
121,331
|
|
|
2021
|
|
110,810
|
|
|
2022
|
|
100,087
|
|
|
2023
|
|
82,572
|
|
|
2024 and thereafter
|
|
512,371
|
|
|
Total(1)
|
|
$
|
977,925
|
|
(1)
|
Excludes minimum future rents for real estate that is classified as held for sale totaling $43.4 million through 2029, of which $3.2 million relates to the remainder of 2019.
|
2019
|
|
$
|
113,525
|
|
2020
|
|
107,413
|
|
|
2021
|
|
98,343
|
|
|
2022
|
|
88,270
|
|
|
2023
|
|
73,257
|
|
|
2024 and thereafter
|
|
765,652
|
|
|
Total
|
|
$
|
1,246,460
|
|
|
|
|
|
|
|
Purchase Price Allocation
|
|||||||||||||||||||||||||
Acquisition Date
|
Property Type and Location
|
Number of Buildings
|
|
Purchase Price(1)
|
|
Land and Improvements(2)
|
|
Building and Improvements(2)
|
|
Furniture, Fixtures and Equipment
|
|
Lease Intangible Assets(2)
|
|
Other Assets
|
|
Other Liabilities
|
|||||||||||||||
Nine Months Ended September 30, 2019
|
|||||||||||||||||||||||||||||||
June
|
Retail - Massachusetts(3)
|
3
|
|
|
$
|
21,919
|
|
|
$
|
9,294
|
|
|
$
|
6,598
|
|
|
$
|
—
|
|
|
$
|
5,256
|
|
|
$
|
1,538
|
|
|
$
|
(767
|
)
|
January
|
Various - in U.S.(3)
|
28
|
|
|
105,437
|
|
|
38,145
|
|
|
66,413
|
|
|
—
|
|
|
879
|
|
|
3,223
|
|
|
(3,223
|
)
|
|||||||
|
|
|
|
$
|
127,356
|
|
|
$
|
47,439
|
|
|
$
|
73,011
|
|
|
$
|
—
|
|
|
$
|
6,135
|
|
|
$
|
4,761
|
|
|
$
|
(3,990
|
)
|
|
Year Ended December 31, 2018
|
|||||||||||||||||||||||||||||||
July
|
Office - Norway(4)
|
26
|
|
|
$
|
318,860
|
|
|
$
|
60,510
|
|
|
$
|
271,983
|
|
|
$
|
—
|
|
|
$
|
25,287
|
|
|
$
|
—
|
|
|
$
|
(38,920
|
)
|
August
|
Hotel - Dallas, TX(3)
|
1
|
|
|
75,663
|
|
|
8,216
|
|
|
61,580
|
|
|
3,947
|
|
|
465
|
|
|
2,023
|
|
|
(568
|
)
|
|||||||
August
|
Industrial - Various in U.S.(4)
|
2
|
|
|
292,000
|
|
|
66,844
|
|
|
189,105
|
|
|
—
|
|
|
36,051
|
|
|
—
|
|
|
—
|
|
|||||||
September
|
Hotel - Pittsburgh, PA(3)
|
1
|
|
|
42,315
|
|
|
7,247
|
|
|
26,363
|
|
|
3,025
|
|
|
1,408
|
|
|
4,392
|
|
|
(120
|
)
|
|||||||
|
|
|
|
$
|
728,838
|
|
|
$
|
142,817
|
|
|
$
|
549,031
|
|
|
$
|
6,972
|
|
|
$
|
63,211
|
|
|
$
|
6,415
|
|
|
$
|
(39,608
|
)
|
(1)
|
Dollar amounts of purchase price and allocation to assets acquired and liabilities assumed are translated using foreign exchange rate as of the respective dates of acquisitions, where applicable.
|
(2)
|
Useful life of real estate acquired is 7 to 41 years for buildings, 1 to 15 years for site improvements, 15 to 20 years for tenant improvements, 2 to 3 years for furniture, fixtures and equipment, and 1 to 20 years for lease intangibles.
|
(3)
|
Represents assets acquired by the Company through foreclosure.
|
(4)
|
Represents net lease properties acquired by the Company.
|
|
|
September 30, 2019
|
||
Assets
|
|
|
||
Real estate, net
|
|
$
|
176,028
|
|
Deferred leasing costs and intangible assets, net
|
|
7,867
|
|
|
Total assets held for sale
|
|
$
|
183,895
|
|
|
|
|
||
Liabilities
|
|
|
||
Intangible liabilities, net
|
|
$
|
5,487
|
|
Total liabilities related to assets held for sale
|
|
$
|
5,487
|
|
8.
|
Deferred Leasing Costs and Other Intangibles
|
|
|
September 30, 2019
|
||||||||||
|
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Deferred Leasing Costs and Intangible Assets
|
|
|
|
|
|
|
||||||
In-place lease values
|
|
$
|
119,069
|
|
|
$
|
(36,924
|
)
|
|
$
|
82,145
|
|
Deferred leasing costs
|
|
45,788
|
|
|
(13,255
|
)
|
|
32,533
|
|
|||
Above-market lease values
|
|
16,741
|
|
|
(6,760
|
)
|
|
9,981
|
|
|||
Other intangibles
|
|
905
|
|
|
(492
|
)
|
|
413
|
|
|||
|
|
$
|
182,503
|
|
|
$
|
(57,431
|
)
|
|
$
|
125,072
|
|
Intangible Liabilities
|
|
|
|
|
|
|
||||||
Below-market lease values
|
|
$
|
33,085
|
|
|
$
|
(9,169
|
)
|
|
$
|
23,916
|
|
|
|
December 31, 2018
|
||||||||||
|
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Deferred Leasing Costs and Intangible Assets
|
|
|
|
|
|
|
||||||
In-place lease values
|
|
$
|
115,778
|
|
|
$
|
(27,120
|
)
|
|
$
|
88,658
|
|
Deferred leasing costs
|
|
39,130
|
|
|
(6,848
|
)
|
|
32,282
|
|
|||
Above-market lease values
|
|
16,203
|
|
|
(3,883
|
)
|
|
12,320
|
|
|||
Other intangibles
|
|
906
|
|
|
(134
|
)
|
|
772
|
|
|||
Below-market ground lease obligations(1)
|
|
52
|
|
|
(16
|
)
|
|
36
|
|
|||
|
|
$
|
172,069
|
|
|
$
|
(38,001
|
)
|
|
$
|
134,068
|
|
Intangible Liabilities
|
|
|
|
|
|
|
||||||
Below-market lease values
|
|
$
|
19,374
|
|
|
$
|
(4,278
|
)
|
|
$
|
15,096
|
|
(1)
|
Upon adopting the standard of ASU No. 2016-02, Leases on January 1, 2019 the below-market ground lease obligations are included in right-of-use lease assets.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Above-market lease values
|
|
$
|
(1,300
|
)
|
|
$
|
(410
|
)
|
|
$
|
(3,189
|
)
|
|
$
|
(2,622
|
)
|
Below-market lease values
|
|
2,130
|
|
|
1,116
|
|
|
5,612
|
|
|
3,102
|
|
||||
Net increase (decrease) to property operating income
|
|
$
|
830
|
|
|
$
|
706
|
|
|
$
|
2,423
|
|
|
$
|
480
|
|
|
|
|
|
|
|
|
|
|
||||||||
Below-market ground lease obligations(1)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Increase to property operating expense
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
||||||||
In-place lease values
|
|
$
|
5,468
|
|
|
$
|
3,104
|
|
|
$
|
16,922
|
|
|
$
|
20,210
|
|
Deferred leasing costs
|
|
2,281
|
|
|
2,482
|
|
|
6,828
|
|
|
4,461
|
|
||||
Other intangibles
|
|
120
|
|
|
15
|
|
|
359
|
|
|
15
|
|
||||
Amortization expense
|
|
$
|
7,869
|
|
|
$
|
5,601
|
|
|
$
|
24,109
|
|
|
$
|
24,686
|
|
(1)
|
Upon adopting the standard of ASU No. 2016-02, Leases on January 1, 2019 the below-market ground lease obligations are included in right-of-use lease assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and thereafter
|
|
Total
|
||||||||||||||
Above-market lease values
|
|
$
|
1,859
|
|
|
$
|
3,682
|
|
|
$
|
2,014
|
|
|
$
|
1,026
|
|
|
$
|
607
|
|
|
$
|
793
|
|
|
$
|
9,981
|
|
Below-market lease values
|
|
(2,368
|
)
|
|
(7,650
|
)
|
|
(6,731
|
)
|
|
(5,216
|
)
|
|
(1,569
|
)
|
|
(382
|
)
|
|
(23,916
|
)
|
|||||||
Net increase (decrease) to property operating income
|
|
$
|
(509
|
)
|
|
$
|
(3,968
|
)
|
|
$
|
(4,717
|
)
|
|
$
|
(4,190
|
)
|
|
$
|
(962
|
)
|
|
$
|
411
|
|
|
$
|
(13,935
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
In-place lease values
|
|
$
|
4,827
|
|
|
$
|
17,121
|
|
|
$
|
12,287
|
|
|
$
|
8,326
|
|
|
$
|
5,106
|
|
|
$
|
34,478
|
|
|
$
|
82,145
|
|
Deferred leasing costs
|
|
3,121
|
|
|
7,215
|
|
|
5,977
|
|
|
4,534
|
|
|
3,078
|
|
|
8,608
|
|
|
32,533
|
|
|||||||
Other intangibles
|
|
354
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
413
|
|
|||||||
Amortization expense
|
|
$
|
8,302
|
|
|
$
|
24,395
|
|
|
$
|
18,264
|
|
|
$
|
12,860
|
|
|
$
|
8,184
|
|
|
$
|
43,086
|
|
|
$
|
115,091
|
|
9.
|
Restricted Cash, Other Assets and Accrued and Other Liabilities
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Restricted cash:
|
|
|
|
|
||||
Borrower escrow deposits
|
|
$
|
87,349
|
|
|
$
|
65,995
|
|
Margin pledged as collateral
|
|
22,303
|
|
|
7,567
|
|
||
Capital expenditure reserves
|
|
13,567
|
|
|
17,440
|
|
||
Real estate escrow reserves
|
|
11,011
|
|
|
7,304
|
|
||
Working capital and other reserves
|
|
4,424
|
|
|
2,905
|
|
||
Tenant lockboxes
|
|
895
|
|
|
5,642
|
|
||
Restricted cash of consolidated Securitization 2016-1
|
|
—
|
|
|
3,293
|
|
||
Total
|
|
$
|
139,549
|
|
|
$
|
110,146
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Other assets:
|
|
|
|
|
||||
Right-of-use lease asset(1)
|
|
$
|
25,263
|
|
|
$
|
—
|
|
Prepaid taxes and deferred tax assets
|
|
21,910
|
|
|
32,878
|
|
||
Derivative asset
|
|
10,237
|
|
|
14,139
|
|
||
Deferred financing costs, net - credit facilities
|
|
9,577
|
|
|
9,415
|
|
||
Prepaid expenses
|
|
6,583
|
|
|
5,574
|
|
||
Other assets
|
|
1,917
|
|
|
—
|
|
||
Investment deposits and pending deal costs
|
|
779
|
|
|
—
|
|
||
Total
|
|
$
|
76,266
|
|
|
$
|
62,006
|
|
(1)
|
Upon adopting the standard of ASU No. 2016-02, Leases on January 1, 2019, the Company, as lessee of various ground leases, recognized right-of-use lease assets and corresponding liabilities for future obligations under lease arrangements on balance sheet.
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Accrued and other liabilities:
|
|
|
|
|
||||
Current and deferred tax liability
|
|
$
|
30,571
|
|
|
$
|
36,730
|
|
Accounts payable, accrued expenses and other liabilities
|
|
26,966
|
|
|
29,151
|
|
||
Right-of-use lease liability(1)
|
|
25,251
|
|
|
—
|
|
||
Derivative liability
|
|
21,270
|
|
|
21,576
|
|
||
Prepaid rent and unearned revenue
|
|
16,431
|
|
|
6,042
|
|
||
Interest payable
|
|
14,570
|
|
|
10,481
|
|
||
Tenant security deposits
|
|
2,965
|
|
|
2,207
|
|
||
Total
|
|
$
|
138,024
|
|
|
$
|
106,187
|
|
(1)
|
Upon adopting the standard of ASU No. 2016-02, Leases on January 1, 2019, the Company, as lessee of various ground leases, recognized right-of-use lease assets and corresponding liabilities for future obligations under lease arrangements on balance sheet.
|
10.
|
Debt
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||
|
Capacity ($)
|
|
Recourse vs.
Non-Recourse(1) |
|
Final
Maturity |
|
Contractual
Interest Rate |
|
Principal
Amount(2) |
|
Carrying
Value(2) |
|
Principal
Amount(2) |
|
Carrying
Value(2) |
||||||||||
Securitization bonds payable, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2014 FL1(3)
|
|
|
|
Non-recourse
|
|
NA
|
|
NA
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,549
|
|
|
$
|
25,549
|
|
|
2014 FL2(3)
|
|
|
|
Non-recourse
|
|
NA
|
|
NA
|
|
—
|
|
|
—
|
|
|
18,320
|
|
|
18,320
|
|
|||||
Securitization 2016-1(3)
|
|
|
|
Non-recourse
|
|
NA
|
|
NA
|
|
—
|
|
|
—
|
|
|
37,503
|
|
|
37,503
|
|
|||||
Subtotal securitization bonds payable, net
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
81,372
|
|
|
81,372
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage and other notes payable, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net lease 6(4)
|
|
|
Non-recourse
|
|
Oct-27
|
|
4.45%
|
|
24,239
|
|
|
24,239
|
|
|
24,606
|
|
|
24,606
|
|
||||||
Net lease 5(5)
|
|
|
Non-recourse
|
|
Nov-26
|
|
4.45%
|
|
3,437
|
|
|
3,342
|
|
|
3,484
|
|
|
3,378
|
|
||||||
Net lease 4(5)
|
|
|
Non-recourse
|
|
Nov-26
|
|
4.45%
|
|
7,418
|
|
|
7,211
|
|
|
7,519
|
|
|
7,290
|
|
||||||
Net lease 3(5)
|
|
|
Non-recourse
|
|
Jun-21
|
|
4.00%
|
|
12,534
|
|
|
12,439
|
|
|
12,786
|
|
|
12,648
|
|
||||||
Net lease 6(5)
|
|
|
Non-recourse
|
|
Jul-23
|
|
LIBOR + 2.15%
|
|
1,765
|
|
|
1,720
|
|
|
2,078
|
|
|
2,024
|
|
||||||
Net lease 5(4)
|
|
|
Non-recourse
|
|
Aug-26
|
|
4.08%
|
|
31,960
|
|
|
31,667
|
|
|
32,378
|
|
|
32,054
|
|
||||||
Net lease 1(5)(6)
|
|
|
Non-recourse
|
|
Nov-26
|
|
4.45%
|
|
18,663
|
|
|
18,143
|
|
|
18,917
|
|
|
18,342
|
|
||||||
Net lease 1(7)
|
|
|
Non-recourse
|
|
Mar-28
|
|
4.38%
|
|
12,275
|
|
|
11,799
|
|
|
12,434
|
|
|
11,920
|
|
||||||
Net lease 4(4)
|
|
|
Non-recourse
|
|
Apr-21(8)
|
|
LIBOR + 2.50%
|
|
74,916
|
|
|
74,792
|
|
|
73,702
|
|
|
73,696
|
|
||||||
Net lease 1(4)
|
|
|
Non-recourse
|
|
Jul-25
|
|
4.31%
|
|
250,000
|
|
|
246,874
|
|
|
250,000
|
|
|
246,522
|
|
||||||
Net lease 2(4)(9)
|
|
|
Non-recourse
|
|
Jun-25
|
|
3.91%
|
|
176,096
|
|
|
178,593
|
|
|
184,320
|
|
|
186,934
|
|
||||||
Net lease 3(4)
|
|
|
Non-recourse
|
|
Sep-33
|
|
4.77%
|
|
200,000
|
|
|
198,501
|
|
|
200,000
|
|
|
198,449
|
|
||||||
Other real estate 4(5)
|
|
|
Non-recourse
|
|
Dec-23
|
|
4.84%
|
|
43,081
|
|
|
43,588
|
|
|
43,500
|
|
|
44,008
|
|
||||||
Other real estate 2(5)
|
|
|
Non-recourse
|
|
Dec-23
|
|
4.94%
|
|
42,594
|
|
|
43,027
|
|
|
43,000
|
|
|
43,501
|
|
||||||
Other real estate 8(5)
|
|
|
Non-recourse
|
|
Jan-24
|
|
5.15%
|
|
15,855
|
|
|
16,360
|
|
|
16,000
|
|
|
16,561
|
|
||||||
Other real estate 10(5)(10)
|
|
|
Non-recourse
|
|
Dec-20
|
|
5.27%
|
|
11,804
|
|
|
11,999
|
|
|
11,964
|
|
|
12,228
|
|
||||||
Other real estate 9(5)
|
|
|
Non-recourse
|
|
Nov-26
|
|
3.98%
|
|
23,995
|
|
|
23,243
|
|
|
24,289
|
|
|
23,485
|
|
||||||
Other real estate 1(5)
|
|
|
Non-recourse
|
|
Oct-24
|
|
4.47%
|
|
108,850
|
|
|
109,653
|
|
|
108,850
|
|
|
109,779
|
|
||||||
Other real estate 3(5)
|
|
|
Non-recourse
|
|
Jan-25
|
|
4.30%
|
|
75,580
|
|
|
74,844
|
|
|
76,448
|
|
|
75,620
|
|
||||||
Other real estate 5(5)
|
|
|
Non-recourse
|
|
Apr-23
|
|
LIBOR + 4.00%
|
|
31,126
|
|
|
30,324
|
|
|
31,126
|
|
|
29,974
|
|
||||||
Other real estate 6(5)(11)
|
|
|
Non-recourse
|
|
Apr-24
|
|
LIBOR + 2.95%
|
|
21,500
|
|
|
20,663
|
|
|
—
|
|
|
—
|
|
||||||
Loan 9(12)
|
|
|
Non-recourse
|
|
Jun-24
|
|
LIBOR + 3.00%
|
|
62,700
|
|
|
62,700
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal mortgage and other notes payable, net
|
|
|
|
|
|
|
|
|
1,250,388
|
|
|
1,245,721
|
|
|
1,177,401
|
|
|
1,173,019
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank credit facility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank credit facility
|
$
|
560,000
|
|
|
Recourse
|
|
Feb-23 (13)
|
|
LIBOR + 2.25%
|
|
158,500
|
|
|
158,500
|
|
|
295,000
|
|
|
295,000
|
|
||||
Subtotal bank credit facility
|
|
|
|
|
|
|
|
|
158,500
|
|
|
158,500
|
|
|
295,000
|
|
|
295,000
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Master repurchase facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank 1 facility 3
|
$
|
400,000
|
|
|
Limited Recourse(14)
|
|
Apr-23(15)
|
|
LIBOR + 1.88%
|
(16)
|
231,550
|
|
|
231,550
|
|
|
143,400
|
|
|
143,400
|
|
||||
Bank 2 facility 3
|
200,000
|
|
|
Limited Recourse(14)
|
|
Oct-22(17)
|
|
LIBOR + 2.50%
|
(16)
|
22,750
|
|
|
22,750
|
|
|
22,750
|
|
|
22,750
|
|
|||||
Bank 3 facility 3
|
600,000
|
|
|
Limited Recourse(14)
|
|
Apr-21
|
|
LIBOR + 2.17%
|
(16)
|
581,210
|
|
|
581,210
|
|
|
352,108
|
|
|
352,108
|
|
|||||
Bank 7 facility 1
|
500,000
|
|
|
Limited Recourse(14)
|
|
Apr-22(18)
|
|
LIBOR + 1.85%
|
(16)
|
457,360
|
|
|
457,360
|
|
|
308,434
|
|
|
308,434
|
|
|||||
Bank 8 facility 1
|
250,000
|
|
|
Limited Recourse(14)
|
|
Jun-21(19)
|
|
LIBOR + 1.96%
|
(16)
|
184,366
|
|
|
184,366
|
|
|
53,596
|
|
|
53,596
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||
|
Capacity ($)
|
|
Recourse vs.
Non-Recourse(1) |
|
Final
Maturity |
|
Contractual
Interest Rate |
|
Principal
Amount(2) |
|
Carrying
Value(2) |
|
Principal
Amount(2) |
|
Carrying
Value(2) |
||||||||||
Bank 9 facility 1
|
300,000
|
|
|
(20)
|
|
Nov-23(21)
|
|
LIBOR + 1.65%
|
(16)
|
66,643
|
|
|
66,643
|
|
|
—
|
|
|
—
|
|
|||||
Subtotal master repurchase facilities
|
$
|
2,250,000
|
|
|
|
|
|
|
|
|
1,543,879
|
|
|
1,543,879
|
|
|
880,288
|
|
|
880,288
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CMBS credit facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank 1 facility 1
|
|
|
Recourse
|
|
(22)
|
|
LIBOR + 1.16%
|
(16)
|
20,394
|
|
|
20,394
|
|
|
18,542
|
|
|
18,542
|
|
||||||
Bank 1 facility 2
|
|
|
Recourse
|
|
(22)
|
|
LIBOR + 1.16%
|
(16)
|
18,911
|
|
|
18,911
|
|
|
17,237
|
|
|
17,237
|
|
||||||
Bank 3 facility
|
|
|
|
Recourse
|
|
(22)
|
|
NA
|
(23)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Bank 4 facility
|
|
|
Recourse
|
|
(22)
|
|
NA
|
(23)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Bank 5 facility 1
|
|
|
Recourse
|
|
(22)
|
|
NA
|
(23)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Bank 5 facility 2
|
|
|
Recourse
|
|
(22)
|
|
NA
|
(23)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Bank 6 facility 1
|
|
|
Recourse
|
|
(22)
|
|
LIBOR + 1.27%
|
(16)
|
82,967
|
|
|
82,967
|
|
|
80,838
|
|
|
80,838
|
|
||||||
Bank 6 facility 2
|
|
|
Recourse
|
|
(22)
|
|
LIBOR + 1.10%
|
(16)
|
82,905
|
|
|
82,905
|
|
|
74,013
|
|
|
74,013
|
|
||||||
Subtotal CMBS credit facilities
|
|
|
|
|
|
|
|
|
205,177
|
|
|
205,177
|
|
|
190,630
|
|
|
190,630
|
|
||||||
Subtotal credit facilities
|
|
|
|
|
|
|
|
|
1,907,556
|
|
|
1,907,556
|
|
|
1,365,918
|
|
|
1,365,918
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
3,157,944
|
|
|
$
|
3,153,277
|
|
|
$
|
2,624,691
|
|
|
$
|
2,620,309
|
|
(1)
|
Subject to customary non-recourse carveouts.
|
(2)
|
Difference between principal amount and carrying value of securitization bonds payable, net and mortgage and other notes payable, net is attributable to deferred financing costs, net and premium/discount on mortgage notes payable.
|
(3)
|
The Company, through indirect Cayman subsidiaries, securitized commercial mortgage loans originated by the Company. Senior notes issued by the securitization trusts were generally sold to third parties and subordinated notes retained by the Company. These securitizations are accounted for as secured financing with the underlying mortgage loans pledged as collateral. Principal payments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities on the notes. Underlying collateral loans have initial terms of two to three years.
|
(4)
|
Represents a mortgage note collateralized by an investment in the Company’s Core Portfolio.
|
(5)
|
Represents a mortgage note collateralized by an investment in the Company’s Legacy, Non-Strategic Portfolio.
|
(6)
|
Payment terms are periodic payment of principal and interest for debt on two properties and periodic payment of interest only with principal at maturity (except for principal repayments to release collateral properties disposed) for debt on one property.
|
(7)
|
Represents a mortgage note collateralized by three properties in the Company’s Legacy, Non-Strategic Portfolio.
|
(8)
|
The current maturity of the mortgage payable is April 2020, with a one-year extension available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.
|
(9)
|
As of September 30, 2019, the outstanding principal of the mortgage payable was NOK 1.6 billion, which translated to $176.1 million.
|
(10)
|
Represents two separate senior mortgage notes with a weighted average maturity of December 2020 and weighted average interest rate of 5.27%.
|
(11)
|
The current maturity of the mortgage payable is April 2022, with two one-year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.
|
(12)
|
The current maturity of the note payable is June 2021, with three one-year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. The loan is included in the Company’s Core Portfolio.
|
(13)
|
The ability to borrow additional amounts terminates on February 1, 2022 at which time the Company may, at its election, extend the termination date for two additional six-month terms.
|
(14)
|
Recourse solely with respect to 25.0% of the financed amount.
|
(15)
|
The next maturity date is April 2021, with two one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.
|
(16)
|
Represents the weighted average spread as of September 30, 2019. The contractual interest rate depends upon asset type and characteristics and ranges from one-month London Interbank Offered Rates (“LIBOR”) plus 1.10% to 2.75%.
|
(17)
|
The next maturity date is October 2019, with three one-year extension options available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. Subsequent to September 30, 2019, the maturity date was extended to October 2020.
|
(18)
|
The next maturity date is April 2021, with a one-year extension available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.
|
(19)
|
The next maturity date is June 2020, with a one-year extension available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.
|
(20)
|
Recourse is either 25.0% or 50.0% depending on loan metrics.
|
(21)
|
The next maturity date is November 2021, with two one-year extension options available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.
|
(22)
|
The maturity dates on the CMBS Credit Facilities are dependent upon asset type and will typically range from one to two months.
|
(23)
|
CMBS Credit Facilities are undrawn and fully available.
|
|
Total
|
|
Mortgage Notes Payable, Net(1)
|
|
Credit
Facilities |
||||||
Remainder of 2019
|
$
|
205,821
|
|
|
$
|
644
|
|
|
$
|
205,177
|
|
2020
|
14,447
|
|
|
14,447
|
|
|
—
|
|
|||
2021
|
855,011
|
|
|
89,435
|
|
|
765,576
|
|
|||
2022
|
482,630
|
|
|
2,520
|
|
|
480,110
|
|
|||
2023
|
575,913
|
|
|
119,220
|
|
|
456,693
|
|
|||
2024 and thereafter
|
1,024,122
|
|
|
1,024,122
|
|
|
—
|
|
|||
Total
|
$
|
3,157,944
|
|
|
$
|
1,250,388
|
|
|
$
|
1,907,556
|
|
(1)
|
Includes $51.7 million of future minimum principal payments related to assets held for sale.
|
11.
|
Related Party Arrangements
|
12.
|
Equity-Based Compensation
|
|
Number of Shares
|
|
|
||||||
|
Restricted Stock
|
|
Total
|
|
Weighted Average Grant Date Fair Value
|
||||
Unvested Shares at December 31, 2018
|
889,713
|
|
|
889,713
|
|
|
$
|
19.39
|
|
Granted
|
831,910
|
|
|
831,910
|
|
|
15.53
|
|
|
Vested
|
(306,935
|
)
|
|
(306,935
|
)
|
|
19.39
|
|
|
Forfeited
|
(6,487
|
)
|
|
(6,487
|
)
|
|
19.39
|
|
|
Unvested shares at September 30, 2019
|
1,408,201
|
|
|
1,408,201
|
|
|
$
|
17.11
|
|
13.
|
Stockholders’ Equity
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
January 17, 2019
|
|
January 31, 2019
|
|
February 11, 2019
|
|
$0.145
|
February 15, 2019
|
|
February 28, 2019
|
|
March 11, 2019
|
|
$0.145
|
March 18, 2019
|
|
March 29, 2019
|
|
April 10, 2019
|
|
$0.145
|
April 15, 2019
|
|
April 30, 2019
|
|
May 10, 2019
|
|
$0.145
|
May 2, 2019
|
|
May 31, 2019
|
|
June 10, 2019
|
|
$0.145
|
June 17, 2019
|
|
June 30, 2019
|
|
July 10, 2019
|
|
$0.145
|
July 17, 2019
|
|
July 31, 2019
|
|
August 9, 2019
|
|
$0.145
|
August 1, 2019
|
|
August 31, 2019
|
|
September 10, 2019
|
|
$0.145
|
September 17, 2019
|
|
September 30, 2019
|
|
October 10, 2019
|
|
$0.145
|
(in thousands)
|
Unrealized gain (loss) on real estate securities, available for sale
|
|
Unrealized gain on net investment hedges
|
|
Foreign currency translation gain (loss)
|
|
Total
|
||||||||
AOCI at December 31, 2018
|
$
|
(1,295
|
)
|
|
$
|
11,037
|
|
|
$
|
(10,141
|
)
|
|
$
|
(399
|
)
|
Other comprehensive income (loss)
|
9,530
|
|
|
7,222
|
|
|
(3,233
|
)
|
|
13,519
|
|
||||
AOCI at March 31, 2019
|
8,235
|
|
|
18,259
|
|
|
(13,374
|
)
|
|
13,120
|
|
||||
Other comprehensive income
|
7,679
|
|
|
916
|
|
|
3,832
|
|
|
12,427
|
|
||||
AOCI at June 30, 2019
|
15,914
|
|
|
19,175
|
|
|
(9,542
|
)
|
|
25,547
|
|
||||
Other comprehensive income (loss)
|
4,983
|
|
|
12,492
|
|
|
(14,107
|
)
|
|
3,368
|
|
||||
AOCI at September 30, 2019
|
$
|
20,897
|
|
|
$
|
31,667
|
|
|
$
|
(23,649
|
)
|
|
$
|
28,915
|
|
(in thousands)
|
Unrealized gain (loss) on real estate securities, available for sale
|
|
Unrealized (loss) on net investment hedges
|
|
Foreign currency translation (loss)
|
|
Total
|
||||||||
AOCI at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive loss
|
(1,848
|
)
|
|
—
|
|
|
—
|
|
|
(1,848
|
)
|
||||
AOCI at March 31, 2018
|
(1,848
|
)
|
|
—
|
|
|
—
|
|
|
(1,848
|
)
|
||||
Other comprehensive loss
|
(930
|
)
|
|
—
|
|
|
—
|
|
|
(930
|
)
|
||||
AOCI at June 30, 2018
|
(2,778
|
)
|
|
—
|
|
|
—
|
|
|
(2,778
|
)
|
||||
Other comprehensive income (loss)
|
6,046
|
|
|
(407
|
)
|
|
(392
|
)
|
|
5,247
|
|
||||
AOCI at September 30, 2018
|
$
|
3,268
|
|
|
$
|
(407
|
)
|
|
$
|
(392
|
)
|
|
$
|
2,469
|
|
(in thousands)
|
Unrealized gain (loss) on real estate securities, available for sale
|
|
Unrealized gain on net investment hedges
|
|
Foreign currency translation gain (loss)
|
|
Total
|
||||||||
AOCI at December 31, 2018
|
$
|
(32
|
)
|
|
$
|
268
|
|
|
$
|
(246
|
)
|
|
$
|
(10
|
)
|
Other comprehensive income (loss)
|
228
|
|
|
173
|
|
|
(77
|
)
|
|
324
|
|
||||
AOCI at March 31, 2019
|
196
|
|
|
441
|
|
|
(323
|
)
|
|
314
|
|
||||
Other comprehensive income
|
184
|
|
|
22
|
|
|
91
|
|
|
297
|
|
||||
AOCI at June 30, 2019
|
380
|
|
|
463
|
|
|
(232
|
)
|
|
611
|
|
||||
Other comprehensive income
|
119
|
|
|
299
|
|
|
(338
|
)
|
|
80
|
|
||||
AOCI at September 30, 2019
|
$
|
499
|
|
|
$
|
762
|
|
|
$
|
(570
|
)
|
|
$
|
691
|
|
(in thousands)
|
Unrealized gain (loss) on real estate securities, available for sale
|
|
Unrealized (loss) on net investment hedges
|
|
Foreign currency translation (loss)
|
|
Total
|
||||||||
AOCI at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
AOCI at March 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss)
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
||||
ACOI at June 30, 2018
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
||||
Other comprehensive income
|
146
|
|
|
(9
|
)
|
|
(10
|
)
|
|
127
|
|
||||
AOCI at September 30, 2018
|
$
|
79
|
|
|
$
|
(9
|
)
|
|
$
|
(10
|
)
|
|
$
|
60
|
|
14.
|
Noncontrolling Interests
|
15.
|
Fair Value
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments in unconsolidated ventures - PE Investments
|
$
|
—
|
|
|
$
|
2,593
|
|
|
$
|
11,730
|
|
|
$
|
14,323
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
160,851
|
|
|
$
|
160,851
|
|
Real estate securities, available for sale
|
—
|
|
|
255,937
|
|
|
|
|
|
255,937
|
|
|
—
|
|
|
228,185
|
|
|
—
|
|
|
228,185
|
|
||||||||
Mortgage loans held in securitization trusts, at fair value
|
—
|
|
|
—
|
|
|
1,904,003
|
|
|
1,904,003
|
|
|
—
|
|
|
—
|
|
|
3,116,978
|
|
|
3,116,978
|
|
||||||||
Other assets - derivative assets
|
—
|
|
|
10,237
|
|
|
—
|
|
|
10,237
|
|
|
—
|
|
|
14,139
|
|
|
—
|
|
|
14,139
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage obligations issued by securitization trusts, at fair value
|
$
|
—
|
|
|
$
|
1,793,435
|
|
|
$
|
—
|
|
|
$
|
1,793,435
|
|
|
$
|
—
|
|
|
$
|
2,973,936
|
|
|
$
|
—
|
|
|
$
|
2,973,936
|
|
Other liabilities - derivative liabilities
|
—
|
|
|
21,270
|
|
|
—
|
|
|
21,270
|
|
|
—
|
|
|
6,042
|
|
|
—
|
|
|
6,042
|
|
|
Nine Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2018
|
||||||||||||
|
Investments in unconsolidated ventures - PE Investments
|
|
Mortgage loans held in securitization trusts(1)
|
|
Investments in unconsolidated ventures - PE Investments
|
|
Mortgage loans held in securitization trusts(1)
|
||||||||
Beginning balance
|
$
|
160,851
|
|
|
$
|
3,116,978
|
|
|
$
|
24,417
|
|
|
$
|
—
|
|
Contributions(2)/purchases
|
151
|
|
|
—
|
|
|
247,668
|
|
|
3,327,199
|
|
||||
Distributions/paydowns
|
(15,524
|
)
|
|
(36,995
|
)
|
|
(62,928
|
)
|
|
(135,245
|
)
|
||||
Deconsolidation of securitization trust(3)
|
—
|
|
|
(1,239,627
|
)
|
|
|
|
|
||||||
Equity in earnings
|
—
|
|
|
—
|
|
|
21,709
|
|
|
—
|
|
||||
Sale of investments
|
(48,930
|
)
|
|
(39,848
|
)
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
(84,818
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unrealized gain (loss) in earnings
|
—
|
|
|
100,723
|
|
|
(20,426
|
)
|
|
(64,976
|
)
|
||||
Realized (loss) in earnings
|
|
|
2,772
|
|
|
—
|
|
|
(2,752
|
)
|
|||||
Ending balance
|
$
|
11,730
|
|
|
$
|
1,904,003
|
|
|
$
|
210,440
|
|
|
$
|
3,124,226
|
|
(1)
|
For the nine months ended September 30, 2019, unrealized gain of $100.7 million related to mortgage loans held in securitization trusts, at fair value was offset by unrealized loss of $96.1 million related to mortgage obligations issued by securitization trusts, at fair value.
|
(2)
|
Includes initial investments, before distribution and contribution closing statement adjustments, and subsequent contributions, including deferred purchase price fundings.
|
(3)
|
In July 2019, the Company sold its retained investments in the subordinate tranches of one securitization trust. As a result of the sale, the Company deconsolidated one of the securitization trusts. See Note 6, “Real Estate Securities, Available for Sale” for further information.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Principal Amount
|
|
Carrying Value
|
|
Fair Value
|
|
Principal Amount
|
|
Carrying Value
|
|
Fair Value
|
||||||||||||
Financial assets:(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans and preferred equity held for investment, net
|
$
|
2,809,698
|
|
(2)
|
$
|
2,516,197
|
|
|
$
|
2,529,286
|
|
|
$
|
2,129,857
|
|
(2)
|
$
|
2,020,497
|
|
|
$
|
2,025,216
|
|
Financial liabilities:(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securitization bonds payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,372
|
|
|
$
|
81,372
|
|
|
$
|
81,372
|
|
Mortgage and other notes payable, net
|
1,250,388
|
|
|
1,245,721
|
|
|
1,250,647
|
|
|
1,177,401
|
|
|
1,173,019
|
|
|
1,177,669
|
|
||||||
Master repurchase facilities
|
1,907,556
|
|
|
1,907,556
|
|
|
1,907,556
|
|
|
1,365,918
|
|
|
1,365,918
|
|
|
1,365,918
|
|
(1)
|
The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.
|
(2)
|
Excludes future funding commitments of $251.5 million and $135.0 million as of September 30, 2019 and December 31, 2018, respectively.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Real estate, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
783,803
|
|
|
$
|
783,803
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78,312
|
|
|
$
|
78,312
|
|
Assets held for sale
|
—
|
|
|
—
|
|
|
69,419
|
|
|
69,419
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended
September 30, 2019 |
||||
Impairment of operating real estate
|
$
|
272,722
|
|
|
$
|
282,846
|
|
16.
|
Derivatives
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Designated Hedges
|
|
Non-Designated Hedges
|
|
Total
|
|
Designated Hedges
|
|
Non-Designated Hedges
|
|
Total
|
||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
|
$
|
4,727
|
|
|
$
|
5,508
|
|
|
$
|
10,235
|
|
|
$
|
11,312
|
|
|
$
|
2,796
|
|
|
$
|
14,108
|
|
Interest rate contracts
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
31
|
|
|
31
|
|
||||||
Included in other assets
|
|
$
|
4,727
|
|
|
$
|
5,510
|
|
|
$
|
10,237
|
|
|
$
|
11,312
|
|
|
$
|
2,827
|
|
|
$
|
14,139
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
|
$
|
—
|
|
|
$
|
(310
|
)
|
|
$
|
(310
|
)
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
Interest rate contracts
|
|
—
|
|
|
(20,960
|
)
|
|
(20,960
|
)
|
|
—
|
|
|
(6,032
|
)
|
|
(6,032
|
)
|
||||||
Included in accrued and other liabilities
|
|
$
|
—
|
|
|
$
|
(21,270
|
)
|
|
$
|
(21,270
|
)
|
|
$
|
(10
|
)
|
|
$
|
(6,032
|
)
|
|
$
|
(6,042
|
)
|
Type of Derivatives
|
|
Notional Currency
|
|
Notional Amount (in thousands)
|
|
Range of Maturity Dates
|
||||||
Designated
|
|
Non-Designated
|
||||||||||
FX Forward
|
|
EUR
|
|
€
|
165,330
|
|
|
€
|
—
|
|
|
December 2019 - June 2023
|
FX Forward
|
|
NOK
|
|
NOK 585,600
|
|
|
NOK 361,200
|
|
|
October 2019 - July 2023
|
||
Interest Rate Swap
|
|
USD
|
|
$
|
—
|
|
|
$
|
403,945
|
|
|
April 2020 - August 2028
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Other gain (loss), net
|
|
|
|
|
|
|
|
|
||||||||
Non-designated foreign exchange contracts
|
|
$
|
2,016
|
|
|
$
|
107
|
|
|
$
|
2,394
|
|
|
$
|
107
|
|
Non-designated interest rate contracts
|
|
(4,688
|
)
|
|
(122
|
)
|
|
(14,949
|
)
|
|
(87
|
)
|
||||
|
|
$
|
(2,672
|
)
|
|
$
|
(15
|
)
|
|
$
|
(12,555
|
)
|
|
$
|
20
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Designated foreign exchange contracts
|
|
$
|
12,791
|
|
|
$
|
(416
|
)
|
|
$
|
21,124
|
|
|
$
|
(416
|
)
|
|
|
12,791
|
|
|
(416
|
)
|
|
21,124
|
|
|
(416
|
)
|
||||
Interest income
|
|
|
|
|
|
|
|
|
||||||||
Non-designated interest rate contracts
|
|
$
|
—
|
|
|
$
|
1,497
|
|
|
$
|
—
|
|
|
$
|
2,176
|
|
|
|
Gross Amounts of Assets (Liabilities) Included on Consolidated Balance Sheets
|
|
Gross Amounts Not Offset on Consolidated Balance Sheets
|
|
Net Amounts of Assets (Liabilities)
|
||||||||||
(Assets) Liabilities
|
|
Cash Collateral Pledged
|
||||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
10,235
|
|
|
$
|
(310
|
)
|
|
$
|
—
|
|
|
$
|
9,925
|
|
Interest rate contracts
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
10,237
|
|
|
$
|
(312
|
)
|
|
$
|
—
|
|
|
$
|
9,925
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
(310
|
)
|
|
$
|
310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
|
(20,960
|
)
|
|
2
|
|
|
20,958
|
|
|
—
|
|
||||
|
|
$
|
(21,270
|
)
|
|
$
|
312
|
|
|
$
|
20,958
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
14,108
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
14,098
|
|
Interest rate contracts
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
|
|
$
|
14,139
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
14,129
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
(10
|
)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
|
(6,032
|
)
|
|
—
|
|
|
5,490
|
|
|
(542
|
)
|
||||
|
|
$
|
(6,042
|
)
|
|
$
|
10
|
|
|
$
|
5,490
|
|
|
$
|
(542
|
)
|
17.
|
Commitments and Contingencies
|
|
|
Three Months Ended
September 30, 2019 |
|
Nine Months Ended
September 30, 2019 |
||||
Operating lease expense:
|
|
|
|
|
||||
Minimum lease expense
|
|
$
|
791
|
|
|
$
|
2,335
|
|
Variable lease expense
|
|
—
|
|
|
—
|
|
||
|
|
$
|
791
|
|
|
$
|
2,335
|
|
Remainder of 2019
|
|
$
|
783
|
|
2020
|
|
3,132
|
|
|
2021
|
|
3,117
|
|
|
2022
|
|
3,144
|
|
|
2023
|
|
3,154
|
|
|
2024 and thereafter
|
|
25,088
|
|
|
Total lease payments
|
|
38,418
|
|
|
Less: Present value discount
|
|
13,167
|
|
|
Operating lease liability (Note 9)
|
|
$
|
25,251
|
|
2019
|
|
$
|
2,821
|
|
2020
|
|
2,819
|
|
|
2021
|
|
2,804
|
|
|
2022
|
|
1,882
|
|
|
2023
|
|
1,388
|
|
|
2024 and thereafter
|
|
12,998
|
|
|
Total
|
|
$
|
24,712
|
|
18.
|
Segment Reporting
|
•
|
Core Portfolio, which consists of the following four segments and remain unchanged from the prior segments:
|
◦
|
Senior and Mezzanine Loans and Preferred Equity—CRE debt investments including senior mortgage loans, mezzanine loans, and preferred equity interests as well as participations in such loans. The segment also includes ADC loan arrangements accounted for as equity method investments.
|
◦
|
CRE Debt Securities—investments in CMBS (including “B-pieces” of a CMBS securitization pool) or CRE CLOs (collateralized by pools of CRE debt investments).
|
◦
|
Net Leased Real Estate—direct investments in commercial real estate with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance, capital expenditures and real estate taxes.
|
◦
|
Corporate—includes corporate-level asset management and other fees, related party and general and administrative expenses to the Core Portfolio only.
|
•
|
Legacy, Non-Strategic Portfolio—segment consists of direct investments in operating real estate such as multi-tenant office and multifamily residential assets such as real estate acquired in settlement of loans (“REO”) which the Company plans to exit. It also includes two portfolios of PE Investments and certain retail and other legacy loans originated prior to the Combination. This segment includes corporate-level asset management and other fees, related party and general and administrative expenses related to the Legacy, Non-Strategic Portfolio only.
|
|
|
Core
|
|
|
|
|
||||||||||||||||||||||
|
|
Senior and MezzanineLoans and Preferred Equity
|
|
CRE Debt Securities
|
|
Net Leased Real Estate
|
|
Corporate(1)
|
|
Total Core Portfolio
|
|
Legacy, Non-Strategic Portfolio
|
|
Total
|
||||||||||||||
Three Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (expense)
|
|
$
|
21,295
|
|
|
$
|
5,102
|
|
|
$
|
—
|
|
|
$
|
(2,363
|
)
|
|
$
|
24,034
|
|
|
$
|
2,077
|
|
|
$
|
26,111
|
|
Property and other income
|
|
209
|
|
|
200
|
|
|
28,316
|
|
|
369
|
|
|
29,094
|
|
|
35,218
|
|
|
64,312
|
|
|||||||
Management fee expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,084
|
)
|
|
(9,084
|
)
|
|
(2,271
|
)
|
|
(11,355
|
)
|
|||||||
Property operating expense
|
|
—
|
|
|
—
|
|
|
(8,340
|
)
|
|
—
|
|
|
(8,340
|
)
|
|
(21,416
|
)
|
|
(29,756
|
)
|
|||||||
Transaction, investment and servicing expense
|
|
(512
|
)
|
|
(3
|
)
|
|
(103
|
)
|
|
(245
|
)
|
|
(863
|
)
|
|
(570
|
)
|
|
(1,433
|
)
|
|||||||
Interest expense on real estate
|
|
—
|
|
|
—
|
|
|
(8,695
|
)
|
|
—
|
|
|
(8,695
|
)
|
|
(5,586
|
)
|
|
(14,281
|
)
|
|||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
(11,673
|
)
|
|
—
|
|
|
(11,673
|
)
|
|
(14,261
|
)
|
|
(25,934
|
)
|
|||||||
Provision for loan losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,314
|
)
|
|
(110,314
|
)
|
|||||||
Impairment of operating real estate
|
|
—
|
|
|
—
|
|
|
(23,911
|
)
|
|
—
|
|
|
(23,911
|
)
|
|
(248,811
|
)
|
|
(272,722
|
)
|
|||||||
Administrative expense
|
|
(312
|
)
|
|
(244
|
)
|
|
(78
|
)
|
|
(3,537
|
)
|
|
(4,171
|
)
|
|
(3,561
|
)
|
|
(7,732
|
)
|
|||||||
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
215
|
|
|
—
|
|
|
(2,191
|
)
|
|
(1,976
|
)
|
|
—
|
|
|
(1,976
|
)
|
|||||||
Realized gain on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,724
|
|
|
2,724
|
|
|
—
|
|
|
2,724
|
|
|||||||
Other gain (loss), net
|
|
(15
|
)
|
|
(4,683
|
)
|
|
2,019
|
|
|
(3
|
)
|
|
(2,682
|
)
|
|
(6
|
)
|
|
(2,688
|
)
|
|||||||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
|
20,665
|
|
|
587
|
|
|
(22,465
|
)
|
|
(14,330
|
)
|
|
(15,543
|
)
|
|
(369,501
|
)
|
|
(385,044
|
)
|
|||||||
Equity in earnings (loss) of unconsolidated ventures
|
|
2,736
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,736
|
|
|
(18,641
|
)
|
|
(15,905
|
)
|
|||||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(201
|
)
|
|
—
|
|
|
(201
|
)
|
|
(845
|
)
|
|
(1,046
|
)
|
|||||||
Net income (loss)
|
|
$
|
23,401
|
|
|
$
|
587
|
|
|
$
|
(22,666
|
)
|
|
$
|
(14,330
|
)
|
|
$
|
(13,008
|
)
|
|
$
|
(388,987
|
)
|
|
$
|
(401,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (expense)
|
|
$
|
13,089
|
|
|
$
|
7,704
|
|
|
$
|
2
|
|
|
$
|
(1,794
|
)
|
|
$
|
19,001
|
|
|
$
|
10,957
|
|
|
$
|
29,958
|
|
Property and other income
|
|
34
|
|
|
6
|
|
|
27,799
|
|
|
367
|
|
|
28,206
|
|
|
25,731
|
|
|
53,937
|
|
|||||||
Management fee expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,501
|
)
|
|
(9,501
|
)
|
|
(2,376
|
)
|
|
(11,877
|
)
|
|||||||
Property operating expense
|
|
(2
|
)
|
|
—
|
|
|
(8,261
|
)
|
|
—
|
|
|
(8,263
|
)
|
|
(12,954
|
)
|
|
(21,217
|
)
|
|||||||
Transaction, investment and servicing expense
|
|
(412
|
)
|
|
—
|
|
|
(40
|
)
|
|
(1,283
|
)
|
|
(1,735
|
)
|
|
(1,896
|
)
|
|
(3,631
|
)
|
|||||||
Interest expense on real estate
|
|
(9
|
)
|
|
—
|
|
|
(8,066
|
)
|
|
—
|
|
|
(8,075
|
)
|
|
(5,266
|
)
|
|
(13,341
|
)
|
|||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
(19,774
|
)
|
|
—
|
|
|
(19,774
|
)
|
|
(10,764
|
)
|
|
(30,538
|
)
|
|||||||
Provision for loan losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,059
|
)
|
|
(35,059
|
)
|
|||||||
Impairment of operating real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,378
|
)
|
|
(29,378
|
)
|
|||||||
Administrative expense
|
|
(154
|
)
|
|
(416
|
)
|
|
(58
|
)
|
|
(3,083
|
)
|
|
(3,711
|
)
|
|
(3,086
|
)
|
|
(6,797
|
)
|
|||||||
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
(1,834
|
)
|
|
—
|
|
|
895
|
|
|
(939
|
)
|
|
—
|
|
|
(939
|
)
|
|||||||
Realized loss on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
(549
|
)
|
|
—
|
|
|
—
|
|
|
(549
|
)
|
|
—
|
|
|
(549
|
)
|
|||||||
Other gain (loss), net
|
|
—
|
|
|
(129
|
)
|
|
108
|
|
|
—
|
|
|
(21
|
)
|
|
6
|
|
|
(15
|
)
|
|||||||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
|
12,546
|
|
|
4,782
|
|
|
(8,290
|
)
|
|
(14,399
|
)
|
|
(5,361
|
)
|
|
(64,085
|
)
|
|
(69,446
|
)
|
|||||||
Equity in earnings (loss) of unconsolidated ventures
|
|
10,274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,274
|
|
|
(1,950
|
)
|
|
8,324
|
|
|||||||
Income tax benefit (expense)
|
|
—
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
|
2,365
|
|
|
2,456
|
|
|||||||
Net income (loss)
|
|
$
|
22,820
|
|
|
$
|
4,782
|
|
|
$
|
(8,199
|
)
|
|
$
|
(14,399
|
)
|
|
$
|
5,004
|
|
|
$
|
(63,670
|
)
|
|
$
|
(58,666
|
)
|
(1)
|
Includes income earned from the CRE securities purchased at a discount, recognized using the effective interest method had the transaction been recorded as an available for sale security, at amortized cost. During the three months ended September 30, 2019 and September 30, 2018, $2.2 million and $0.9 million,
|
|
|
Core
|
|
|
|
|||||||||||||||||||||||
|
|
Senior and MezzanineLoans and Preferred Equity
|
|
CRE Debt Securities
|
|
Net Leased Real Estate
|
|
Corporate(1)
|
|
Total Core Portfolio
|
|
Legacy, Non-Strategic Portfolio
|
|
Total
|
||||||||||||||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (expense)
|
|
$
|
55,077
|
|
|
$
|
15,856
|
|
|
$
|
2
|
|
|
$
|
(7,674
|
)
|
|
$
|
63,261
|
|
|
$
|
8,735
|
|
|
$
|
71,996
|
|
Property and other income
|
|
450
|
|
|
341
|
|
|
88,067
|
|
|
371
|
|
|
89,229
|
|
|
103,595
|
|
|
192,824
|
|
|||||||
Management fee expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,256
|
)
|
|
(27,256
|
)
|
|
(6,814
|
)
|
|
(34,070
|
)
|
|||||||
Property operating expense
|
|
—
|
|
|
—
|
|
|
(25,187
|
)
|
|
—
|
|
|
(25,187
|
)
|
|
(60,889
|
)
|
|
(86,076
|
)
|
|||||||
Transaction, investment and servicing expense
|
|
(1,325
|
)
|
|
(4
|
)
|
|
(208
|
)
|
|
301
|
|
|
(1,236
|
)
|
|
(1,777
|
)
|
|
(3,013
|
)
|
|||||||
Interest expense on real estate
|
|
—
|
|
|
—
|
|
|
(26,078
|
)
|
|
—
|
|
|
(26,078
|
)
|
|
(15,708
|
)
|
|
(41,786
|
)
|
|||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
(37,645
|
)
|
|
—
|
|
|
(37,645
|
)
|
|
(45,208
|
)
|
|
(82,853
|
)
|
|||||||
Provision for loan losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(220,572
|
)
|
|
(220,572
|
)
|
|||||||
Impairment of operating real estate
|
|
—
|
|
|
—
|
|
|
(23,911
|
)
|
|
—
|
|
|
(23,911
|
)
|
|
(258,935
|
)
|
|
(282,846
|
)
|
|||||||
Administrative expense
|
|
(614
|
)
|
|
(979
|
)
|
|
(178
|
)
|
|
(10,206
|
)
|
|
(11,977
|
)
|
|
(10,418
|
)
|
|
(22,395
|
)
|
|||||||
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
6,035
|
|
|
—
|
|
|
(1,433
|
)
|
|
4,602
|
|
|
—
|
|
|
4,602
|
|
|||||||
Realized gain on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
48
|
|
|
—
|
|
|
2,724
|
|
|
2,772
|
|
|
—
|
|
|
2,772
|
|
|||||||
Other gain (loss), net
|
|
(15
|
)
|
|
(14,909
|
)
|
|
2,399
|
|
|
1
|
|
|
(12,524
|
)
|
|
(1,305
|
)
|
|
(13,829
|
)
|
|||||||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
|
53,573
|
|
|
6,388
|
|
|
(22,739
|
)
|
|
(43,172
|
)
|
|
(5,950
|
)
|
|
(509,296
|
)
|
|
(515,246
|
)
|
|||||||
Equity in earnings (loss) of unconsolidated ventures
|
|
39,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,020
|
|
|
(21,058
|
)
|
|
17,962
|
|
|||||||
Income tax benefit (expense)
|
|
(12
|
)
|
|
—
|
|
|
1,822
|
|
|
(382
|
)
|
|
1,428
|
|
|
(1,972
|
)
|
|
(544
|
)
|
|||||||
Net income (loss)
|
|
$
|
92,581
|
|
|
$
|
6,388
|
|
|
$
|
(20,917
|
)
|
|
$
|
(43,554
|
)
|
|
$
|
34,498
|
|
|
$
|
(532,326
|
)
|
|
$
|
(497,828
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (expense)
|
|
$
|
44,872
|
|
|
$
|
18,406
|
|
|
$
|
3
|
|
|
$
|
(3,897
|
)
|
|
$
|
59,384
|
|
|
$
|
31,014
|
|
|
$
|
90,398
|
|
Property and other income
|
|
182
|
|
|
19
|
|
|
56,675
|
|
|
903
|
|
|
57,779
|
|
|
65,079
|
|
|
122,858
|
|
|||||||
Management fee expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,334
|
)
|
|
(25,334
|
)
|
|
(6,334
|
)
|
|
(31,668
|
)
|
|||||||
Property operating expense
|
|
10
|
|
|
—
|
|
|
(16,423
|
)
|
|
—
|
|
|
(16,413
|
)
|
|
(32,773
|
)
|
|
(49,186
|
)
|
|||||||
Transaction, investment and servicing expense
|
|
(1,149
|
)
|
|
—
|
|
|
(40
|
)
|
|
(34,830
|
)
|
|
(36,019
|
)
|
|
(2,193
|
)
|
|
(38,212
|
)
|
|||||||
Interest expense on real estate
|
|
(175
|
)
|
|
—
|
|
|
(16,301
|
)
|
|
—
|
|
|
(16,476
|
)
|
|
(12,971
|
)
|
|
(29,447
|
)
|
|||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
(37,901
|
)
|
|
—
|
|
|
(37,901
|
)
|
|
(34,788
|
)
|
|
(72,689
|
)
|
|||||||
Provision for loan loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,542
|
)
|
|
(34,542
|
)
|
|||||||
Impairment of operating real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,378
|
)
|
|
(29,378
|
)
|
|||||||
Administrative expense
|
|
(413
|
)
|
|
(817
|
)
|
|
(62
|
)
|
|
(7,774
|
)
|
|
(9,066
|
)
|
|
(7,843
|
)
|
|
(16,909
|
)
|
|||||||
Unrealized gain on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
655
|
|
|
—
|
|
|
2,599
|
|
|
3,254
|
|
|
—
|
|
|
3,254
|
|
|||||||
Realized loss on mortgage loans and obligations held in securitization trusts, net
|
|
—
|
|
|
(2,752
|
)
|
|
—
|
|
|
—
|
|
|
(2,752
|
)
|
|
—
|
|
|
(2,752
|
)
|
|||||||
Other gain (loss), net
|
|
—
|
|
|
(128
|
)
|
|
108
|
|
|
—
|
|
|
(20
|
)
|
|
480
|
|
|
460
|
|
|||||||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
|
43,327
|
|
|
15,383
|
|
|
(13,941
|
)
|
|
(68,333
|
)
|
|
(23,564
|
)
|
|
(64,249
|
)
|
|
(87,813
|
)
|
|||||||
Equity in earnings of unconsolidated ventures
|
|
25,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,749
|
|
|
14,024
|
|
|
39,773
|
|
|||||||
Income tax benefit
|
|
—
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
|
2,756
|
|
|
2,847
|
|
|||||||
Net income (loss)
|
|
$
|
69,076
|
|
|
$
|
15,383
|
|
|
$
|
(13,850
|
)
|
|
$
|
(68,333
|
)
|
|
$
|
2,276
|
|
|
$
|
(47,469
|
)
|
|
$
|
(45,193
|
)
|
(1)
|
Includes income earned from the CRE securities purchased at a discount, recognized using the effective interest method had the transaction been recorded as an available for sale security, at amortized cost. During the nine months ended September 30, 2019 and September 30, 2018, $1.4 million and $2.6 million,
|
|
|
Core
|
|
|
|
|
||||||||||||||||||||||
Total Assets
|
|
Senior and Mezzanine Loans and Preferred Equity(1)
|
|
CRE Debt Securities
|
|
Net Leased Real Estate
|
|
Corporate(2)
|
|
Total Core Portfolio
|
|
Legacy, Non-Strategic Portfolio(3)
|
|
Total
|
||||||||||||||
September 30, 2019
|
|
$
|
2,894,232
|
|
|
$
|
2,267,596
|
|
|
$
|
1,254,172
|
|
|
$
|
(61,122
|
)
|
|
$
|
6,354,878
|
|
|
$
|
1,088,979
|
|
|
$
|
7,443,857
|
|
December 31, 2018
|
|
2,111,443
|
|
|
3,507,404
|
|
|
1,313,220
|
|
|
(70,600
|
)
|
|
6,861,467
|
|
|
1,799,263
|
|
|
8,660,730
|
|
(1)
|
Includes investments in unconsolidated ventures totaling $557.0 million and $742.2 million as of September 30, 2019 and December 31, 2018, respectively.
|
(2)
|
Includes cash, unallocated receivables, deferred costs and other assets, net and the elimination of the subordinate tranches of the securitization trusts in consolidation.
|
(3)
|
Includes PE Investments totaling $14.3 million and $160.9 million as of September 30, 2019 and December 31, 2018, respectively.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total income by geography:
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
105,826
|
|
|
$
|
135,743
|
|
|
$
|
400,864
|
|
|
$
|
373,458
|
|
Europe
|
|
12,161
|
|
|
5,559
|
|
|
37,080
|
|
|
5,559
|
|
||||
Other
|
|
(3
|
)
|
|
359
|
|
|
32
|
|
|
1,309
|
|
||||
Total(1)
|
|
$
|
117,984
|
|
|
$
|
141,661
|
|
|
$
|
437,976
|
|
|
$
|
380,326
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Long-lived assets by geography:
|
|
|
|
|
||||
United States
|
|
$
|
1,386,138
|
|
|
$
|
1,764,247
|
|
Europe
|
|
307,616
|
|
|
329,511
|
|
||
Total(2)
|
|
$
|
1,693,754
|
|
|
$
|
2,093,758
|
|
(1)
|
Includes interest income, interest income on mortgage loans held in securitization trusts, property and other income and equity in earnings of unconsolidated ventures.
|
(2)
|
Long-lived assets are comprised of real estate and real estate related intangible assets, and excludes financial instruments and assets held for sale.
|
19.
|
Earnings Per Share
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
|
$
|
(401,995
|
)
|
|
$
|
(58,666
|
)
|
|
$
|
(497,828
|
)
|
|
$
|
(45,193
|
)
|
Net (income) loss attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||||||
Investment Entities
|
|
37,445
|
|
|
4,688
|
|
|
38,623
|
|
|
2,788
|
|
||||
Operating Partnership
|
|
8,519
|
|
|
1,275
|
|
|
10,741
|
|
|
996
|
|
||||
Net income (loss) attributable to Colony Credit Real Estate, Inc. common stockholders
|
|
$
|
(356,031
|
)
|
|
$
|
(52,703
|
)
|
|
$
|
(448,464
|
)
|
|
$
|
(41,409
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income allocated to participating securities (nonvested shares)
|
|
$
|
(616
|
)
|
|
$
|
(436
|
)
|
|
$
|
(1,709
|
)
|
|
$
|
(1,019
|
)
|
Net income (loss) attributable to common stockholders
|
|
$
|
(356,647
|
)
|
|
$
|
(53,139
|
)
|
|
$
|
(450,173
|
)
|
|
$
|
(42,428
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding(1)(2)
|
|
128,541
|
|
|
127,887
|
|
|
128,341
|
|
|
118,252
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) per common share - basic and diluted(2)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(3.51
|
)
|
|
$
|
(0.36
|
)
|
(1)
|
For earnings per share, the Company assumes 44.4 million shares of Class B-3 common stock were outstanding prior to January 31, 2018 to reflect the standalone pre-merger financial information of the CLNY Investment Entities, the Company’s predecessor for accounting purposes. On February 1, 2019, the Class B-3 common stock automatically converted to Class A common stock on a one-for-one basis.
|
(2)
|
Excludes 3,075,623 CLNC OP Units, which are redeemable for cash, or at the Company’s option, shares of Class A common stock on a one-for-one basis, and therefore would not be dilutive.
|
20.
|
Subsequent Events
|
•
|
Senior Mortgage Loans. We focus on originating and selectively acquiring senior mortgage loans that are backed by CRE assets. These loans are secured by a first mortgage lien on a commercial property and provide mortgage financing to a commercial property developer or owner. The loans may vary in duration, bear interest at a fixed or floating rate and amortize, if at all, over varying periods, often with a balloon payment of principal at maturity. Senior mortgage loans include junior participations in our originated senior loans for which we have syndicated the senior participations to other investors and retained the junior participations for our portfolio. We believe these junior participations are more similar to the senior mortgage loans we originate than other loan types given their credit quality and risk profile.
|
•
|
Mezzanine Loans. We may originate or acquire mezzanine loans, which are structurally subordinate to senior loans, but senior to the borrower’s equity position. Mezzanine loans may be structured such that our return accrues and is added to the principal amount rather than paid on a current basis. We may also pursue equity participation opportunities in instances when the risk-reward characteristics of the investment warrant additional upside participation in the possible appreciation in value of the underlying assets securing the investment.
|
•
|
Preferred Equity. We may make investments that are subordinate to senior and mezzanine loans, but senior to the common equity in the mortgage borrower. Preferred equity investments may be structured such that our return accrues and is added to the principal amount rather than paid on a current basis. We also may pursue equity participation opportunities in preferred equity investments, similar to such participations in mezzanine loans.
|
•
|
CRE Debt Securities. We may make investments that consist of bonds comprising certain tranches of CRE securitization pools, such as CMBS (including “B-pieces” of a CMBS securitization pool) or CLOs (collateralized by pools of CRE debt instruments). These bonds may be investment grade or below investment grade and are collateralized by CRE debt, typically secured by senior mortgage loans and may be fixed rate or floating rate securities. Due to their first-loss position, CMBS B-pieces are typically offered at a discount to par. These investments typically carry a 10-year weighted average life due to prepayment restrictions. We generally intend to hold these investments through maturity, but may, from time to time, opportunistically sell positions should liquidity become available or be required.
|
•
|
Net Leased Real Estate. We may also invest directly in well-located commercial real estate with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance capital expenditures and real estate taxes. In addition, tenants of our properties typically pay rent increases based on: (1) increases in the consumer price index (typically subject to ceilings), (2) fixed increases, or (3) additional rent calculated as a percentage of the tenants’ gross sales above a specified level. We believe that a portfolio of properties under long-term, net lease agreements generally produces a more predictable income stream than many other types of real estate portfolios, while continuing to offer the potential for growth in rental income.
|
•
|
Core Portfolio, which consists of the following four segments and remain unchanged from the prior segments:
|
◦
|
Senior and Mezzanine Loans and Preferred Equity—CRE debt investments including senior mortgage loans, mezzanine loans, and preferred equity interests as well as participations in such loans. The segment also includes acquisition, development and construction (“ADC”) arrangements accounted for as equity method investments.
|
◦
|
CRE Debt Securities—investments in CMBS (including “B-pieces” of a CMBS securitization pool) or CRE CLOs (collateralized by pools of CRE debt investments).
|
◦
|
Net Leased Real Estate—direct investments in commercial real estate with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance, capital expenditures and real estate taxes.
|
◦
|
Corporate—includes corporate-level asset management and other fees including expenses related to our secured revolving credit facility, related party and general and administrative expenses to the Core Portfolio only.
|
•
|
Legacy, Non-Strategic Portfolio—segment consists of direct investments in operating real estate such as multi-tenant office and multifamily residential assets such as real estate acquired in settlement of loans (“REO”) which we plan to exit. It also includes two portfolios of PE Investments and certain retail and other legacy loans originated prior to the Combination. This segment also includes corporate-level asset management and other fees including expenses related to secured revolving credit facility, related party and general and administrative expenses related to the Legacy, Non-Strategic Portfolio only.
|
•
|
Generated GAAP net loss of $1.5 million, or a loss of $0.01 per share and Core Earnings of $44.7 million, or $0.34 per share;
|
•
|
Originated six senior mortgage loans with a total commitment of $323.6 million; upsized our position in an existing senior mortgage loan by $15.0 million and a mezzanine loan by $87.2 million; and originated two mezzanine loans with a total commitment of $60.2 million;
|
•
|
Recorded $23.9 million of impairment related to a portfolio of net lease real estate due to a reduction in the estimated holding period and $17.6 million related to our share of an equity participation in a joint venture;
|
•
|
Sold a CMBS B-piece at a premium to March 31, 2019 fair market value, which resulted in approximately $33 million in net proceeds;
|
•
|
Subsequent to September 30, 2019, executed a securitization transaction through wholly-owned subsidiaries, CLNC 2019-FL1 Ltd. and CLNC 2019-FL1, LLC (collectively, “CLNC 2019-FL1”), which resulted in the sale of $840 million of investment grade notes. The securitization reflects an advance rate of 83.5% at a weighted average cost of funds of LIBOR plus 1.59%, and is collateralized by a pool of 21 senior loans originated by us. In connection with this transaction, we repaid $770 million of debt on the Master Repurchase Facilities;
|
•
|
Subsequent to September 30, 2019, executed a purchase and sale agreement for the sale of an owned hotel asset with a book value of approximately $72 million. Closing is expected during the fourth quarter of 2019 with capital to be recycled into target investments in the Core Portfolio.
|
•
|
Generated GAAP net loss of $354.5 million, or a loss of $2.76 per share and Legacy, Non-Strategic Earnings loss of $120.3 million, or a loss of $0.91 per share;
|
•
|
Received $38.4 million in cash proceeds in connection with the sales of our PE Investments, which brings the total proceeds received to date to $139.8 million or 99% of the total to be received;
|
•
|
Recorded $110.3 million of provision for loan losses on 11 loans to six separate borrowers, the majority of which are collateralized by retail properties;
|
•
|
Recognized our proportionate share of an impairment loss on investments held in various joint ventures, including two senior loans and a mezzanine loan and an equity participation interest in a residential development project held in a joint venture totaling $22.0 million;
|
•
|
Impairment of our operating real estate due to our plan to exit certain investments, resulting in a reduction in the estimated holding period of certain properties of $248.8 million;
|
•
|
Classified various operating real estate properties totaling $105.1 million as held for sale;
|
•
|
Subsequent to September 30, 2019, we completed the sale of one retail property classified as held for sale.
|
|
Three Months Ended September 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||
|
Core Portfolio
|
Legacy, Non-Strategic Portfolio
|
Total
|
|
Core Portfolio
|
Legacy, Non-Strategic Portfolio
|
Total
|
||||||||||||
Net interest income
|
$
|
24,034
|
|
$
|
2,077
|
|
$
|
26,111
|
|
|
$
|
19,001
|
|
$
|
10,957
|
|
$
|
29,958
|
|
Property and other income
|
29,094
|
|
35,218
|
|
64,312
|
|
|
28,206
|
|
25,731
|
|
53,937
|
|
||||||
Management fee expense
|
(9,084
|
)
|
(2,271
|
)
|
(11,355
|
)
|
|
(9,501
|
)
|
(2,376
|
)
|
(11,877
|
)
|
||||||
Property operating expense
|
(8,340
|
)
|
(21,416
|
)
|
(29,756
|
)
|
|
(8,263
|
)
|
(12,954
|
)
|
(21,217
|
)
|
||||||
Transaction, investment and servicing expense
|
(863
|
)
|
(570
|
)
|
(1,433
|
)
|
|
(1,735
|
)
|
(1,896
|
)
|
(3,631
|
)
|
||||||
Interest expense on real estate
|
(8,695
|
)
|
(5,586
|
)
|
(14,281
|
)
|
|
(8,075
|
)
|
(5,266
|
)
|
(13,341
|
)
|
||||||
Depreciation and amortization
|
(11,673
|
)
|
(14,261
|
)
|
(25,934
|
)
|
|
(19,774
|
)
|
(10,764
|
)
|
(30,538
|
)
|
||||||
Provision for loan losses
|
—
|
|
(110,314
|
)
|
(110,314
|
)
|
|
—
|
|
(35,059
|
)
|
(35,059
|
)
|
||||||
Impairment of operating real estate
|
(23,911
|
)
|
(248,811
|
)
|
(272,722
|
)
|
|
—
|
|
(29,378
|
)
|
(29,378
|
)
|
||||||
Administrative expense
|
(4,171
|
)
|
(3,561
|
)
|
(7,732
|
)
|
|
(3,711
|
)
|
(3,086
|
)
|
(6,797
|
)
|
||||||
Unrealized loss on mortgage loans and obligations held in securitization trusts, net
|
(1,976
|
)
|
—
|
|
(1,976
|
)
|
|
(939
|
)
|
—
|
|
(939
|
)
|
||||||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
2,724
|
|
—
|
|
2,724
|
|
|
(549
|
)
|
—
|
|
(549
|
)
|
||||||
Other gain (loss) on investments, net
|
(2,682
|
)
|
(6
|
)
|
(2,688
|
)
|
|
(21
|
)
|
6
|
|
(15
|
)
|
||||||
Loss before equity in earnings of unconsolidated ventures and income taxes
|
(15,543
|
)
|
(369,501
|
)
|
(385,044
|
)
|
|
(5,361
|
)
|
(64,085
|
)
|
(69,446
|
)
|
||||||
Equity in earnings (loss) of unconsolidated ventures
|
2,736
|
|
(18,641
|
)
|
(15,905
|
)
|
|
10,274
|
|
(1,950
|
)
|
8,324
|
|
||||||
Income tax benefit (expense)
|
(201
|
)
|
(845
|
)
|
(1,046
|
)
|
|
91
|
|
2,365
|
|
2,456
|
|
||||||
Net income (loss)
|
$
|
(13,008
|
)
|
$
|
(388,987
|
)
|
$
|
(401,995
|
)
|
|
$
|
5,004
|
|
$
|
(63,670
|
)
|
$
|
(58,666
|
)
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||
|
Core Portfolio
|
Legacy, Non-Strategic Portfolio
|
Total
|
|
Core Portfolio
|
Legacy, Non-Strategic Portfolio
|
Total
|
||||||||||||
Net interest income
|
$
|
63,261
|
|
$
|
8,735
|
|
$
|
71,996
|
|
|
$
|
59,384
|
|
$
|
31,014
|
|
$
|
90,398
|
|
Property and other income
|
89,229
|
|
103,595
|
|
192,824
|
|
|
57,779
|
|
65,079
|
|
122,858
|
|
||||||
Management fee expense
|
(27,256
|
)
|
(6,814
|
)
|
(34,070
|
)
|
|
(25,334
|
)
|
(6,334
|
)
|
(31,668
|
)
|
||||||
Property operating expense
|
(25,187
|
)
|
(60,889
|
)
|
(86,076
|
)
|
|
(16,413
|
)
|
(32,773
|
)
|
(49,186
|
)
|
||||||
Transaction, investment and servicing expense
|
(1,236
|
)
|
(1,777
|
)
|
(3,013
|
)
|
|
(36,019
|
)
|
(2,193
|
)
|
(38,212
|
)
|
||||||
Interest expense on real estate
|
(26,078
|
)
|
(15,708
|
)
|
(41,786
|
)
|
|
(16,476
|
)
|
(12,971
|
)
|
(29,447
|
)
|
||||||
Depreciation and amortization
|
(37,645
|
)
|
(45,208
|
)
|
(82,853
|
)
|
|
(37,901
|
)
|
(34,788
|
)
|
(72,689
|
)
|
||||||
Provision for loan losses
|
—
|
|
(220,572
|
)
|
(220,572
|
)
|
|
—
|
|
(34,542
|
)
|
(34,542
|
)
|
||||||
Impairment of operating real estate
|
(23,911
|
)
|
(258,935
|
)
|
(282,846
|
)
|
|
—
|
|
(29,378
|
)
|
(29,378
|
)
|
||||||
Administrative expense
|
(11,977
|
)
|
(10,418
|
)
|
(22,395
|
)
|
|
(9,066
|
)
|
(7,843
|
)
|
(16,909
|
)
|
||||||
Unrealized gain on mortgage loans and obligations held in securitization trusts, net
|
4,602
|
|
—
|
|
4,602
|
|
|
3,254
|
|
—
|
|
3,254
|
|
||||||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
2,772
|
|
—
|
|
2,772
|
|
|
(2,752
|
)
|
—
|
|
(2,752
|
)
|
||||||
Other gain (loss) on investments, net
|
(12,524
|
)
|
(1,305
|
)
|
(13,829
|
)
|
|
(20
|
)
|
480
|
|
460
|
|
||||||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
(5,950
|
)
|
(509,296
|
)
|
(515,246
|
)
|
|
(23,564
|
)
|
(64,249
|
)
|
(87,813
|
)
|
||||||
Equity in earnings (loss) of unconsolidated ventures
|
39,020
|
|
(21,058
|
)
|
17,962
|
|
|
25,749
|
|
14,024
|
|
39,773
|
|
||||||
Income tax benefit (expense)
|
1,428
|
|
(1,972
|
)
|
(544
|
)
|
|
91
|
|
2,756
|
|
2,847
|
|
||||||
Net income (loss)
|
$
|
34,498
|
|
$
|
(532,326
|
)
|
$
|
(497,828
|
)
|
|
$
|
2,276
|
|
$
|
(47,469
|
)
|
$
|
(45,193
|
)
|
|
|
Count(1)
|
|
Book value
(Consolidated)
|
|
Book value
(at CLNC share)(2)
|
|||||
Core Portfolio
|
|
|
|
|
|
|
|||||
Senior mortgage loans(3)
|
|
37
|
|
|
$
|
2,277,750
|
|
|
$
|
2,277,750
|
|
Mezzanine loans(3)
|
|
9
|
|
|
268,089
|
|
|
268,089
|
|
||
Preferred equity and other loans(3)(4)
|
|
9
|
|
|
286,704
|
|
|
286,704
|
|
||
CRE debt securities
|
|
51
|
|
|
366,505
|
|
|
366,505
|
|
||
Net leased real estate
|
|
6
|
|
|
1,116,519
|
|
|
1,102,299
|
|
||
Other(5)
|
|
1
|
|
|
71,871
|
|
|
71,871
|
|
||
Total/Weighted average Core Portfolio
|
|
113
|
|
|
$
|
4,387,438
|
|
|
$
|
4,373,218
|
|
(1)
|
Count for net leased real estate represents number of investments.
|
(2)
|
Book value at our share represents the proportionate book value based on ownership by asset as of September 30, 2019.
|
(3)
|
Senior mortgage loans, mezzanine loans, and preferred equity include investments in joint ventures whose underlying interest is in a loan or preferred equity.
|
(4)
|
Preferred equity balances include $27.9 million of book value at our share attributable to related equity participation interests.
|
(5)
|
Other includes one owned hotel asset, which is classified as held for sale as of September 30, 2019 and for which we entered into a purchase and sales agreement subsequent to September 30, 2019.
|
Investment Type
|
|
Property Type
|
|
|
|
Geography
|
|
(1)
|
Senior mortgage loans include junior participations in our originated senior mortgage loans for which we have syndicated the senior participations to other investors and retained the junior participations for our portfolio and contiguous mezzanine loans where we own both the senior and junior loan positions. We believe these investments are more similar to the senior mortgage loans we originate than other loan types given their credit quality and risk profile.
|
(2)
|
Mezzanine loans include other subordinated loans.
|
(3)
|
Preferred equity balances include $27.9 million of book value at our share attributable to related equity participation interests.
|
(4)
|
Other contains one corporate term loan secured by the borrower’s limited partnership interests in a fund.
|
(5)
|
Other includes commercial and residential development and predevelopment assets, one corporate term loan secured by the borrower’s limited partnership interests in a fund, and a preferred equity investment in a loan origination platform.
|
1.
|
Very Low Risk—The loan is performing as agreed. The underlying property performance has exceeded underwritten expectations with very strong net operating income (“NOI”), debt service coverage ratio (“DSCR”), debt yield and occupancy metrics. Sponsor is investment grade, very well capitalized, and employs very experienced management team.
|
2.
|
Low Risk—The loan is performing as agreed. The underlying property performance has met or exceeds underwritten expectations with high occupancy at market rents, resulting in consistent cash flow to service the debt. Strong sponsor that is well capitalized with experienced management team.
|
3.
|
Average Risk—The loan is performing as agreed. The underlying property performance is consistent with underwriting expectations. The property generates adequate cash flow to service the debt, and/or there is a sufficient reserve or loan structure to provide time for sponsor to execute the business plan. Sponsor has routinely met its obligations and has experience owning/operating similar real estate.
|
4.
|
High Risk/Delinquent/Potential for Loss—The loan is in excess of 30 days delinquent and/or has a risk of a principal loss. The underlying property performance is behind underwritten expectations. Loan covenants may require occasional waivers/modifications. Sponsor has been unable to execute its business plan and local market fundamentals have deteriorated. Operating cash flow is not sufficient to service the debt and debt service payments may be coming from sponsor equity/loan reserves.
|
5.
|
Impaired/Defaulted/Loss Likely—The loan has defaulted or a default is imminent, and has a high risk of a principal loss, or has incurred a principal loss. The underlying property performance is significantly worse than underwritten expectation and sponsor has failed to execute its business plan. The property has significant vacancy and current cash flow does not support debt service. Local market fundamentals have significantly deteriorated resulting in depressed comparable property valuations versus underwriting.
|
Risk Ranking
|
|
Count(1)
|
|
Carrying Value (at CLNC share)(1)
|
|
% of Core Portfolio
|
||||
1
|
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
2
|
|
1
|
|
|
49,854
|
|
|
1.8
|
%
|
|
3
|
|
47
|
|
|
2,393,105
|
|
|
84.5
|
%
|
|
4
|
|
5
|
|
|
388,341
|
|
|
13.7
|
%
|
|
5
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
|
|
53
|
|
|
$
|
2,831,300
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
||||
Weighted average risk ranking
|
|
|
|
|
|
3.1
|
|
(1)
|
Count excludes two equity participations held in joint ventures with a combined carrying value (at CLNC share) of $1.2 million which were not assigned risk rankings.
|
(1)
|
Represents carrying values at our share as of September 30, 2019.
|
(2)
|
Represents the stated coupon rate for loans; for floating rate loans, assumes USD 1-month LIBOR Interbank Offered Rate (“LIBOR”) which was 2.01% as of September 30, 2019.
|
(3)
|
In addition to the stated cash coupon rate, unlevered all-in yield includes non-cash payment in-kind interest income and the accrual of origination, extension and exit fees. Unlevered all-in yield for the loan portfolio assumes the applicable floating benchmark rate as of September 30, 2019 for weighted average calculations.
|
(4)
|
Except for construction loans, senior loans reflect the initial loan amount divided by the as-is value as of the date the loan was originated, or the principal amount divided by the appraised value as of the date of the most recent as-is appraisal. Mezzanine loans include attachment loan-to-value and detachment loan-to-value, respectively. Attachment loan-to-value reflects initial funding of loans senior to our position divided by the as-is value as of the date the loan was originated, or the principal amount divided by the appraised value as of the date of the most recent appraisal. Detachment loan-to-value reflects the cumulative initial funding of our loan and the loans senior to our position divided by the as-is value as of the date the loan was originated, or the cumulative principal amount divided by the appraised value as of the date of the most recent appraisal.
|
(5)
|
On a quarterly basis, the Company’s senior and mezzanine loans and preferred equity are rated “1” through “5”, from less risk to greater risk.
|
(6)
|
Construction senior loans’ loan-to-value reflect the total commitment amount of the loan divided by the as completed appraised value, or the total commitment amount of the loan divided by the projected total cost basis. Construction mezzanine loans include attachment loan-to-value and detachment loan-to-value, respectively. Attachment loan-to-value reflects the total commitment amount of loans senior to our position divided by as-completed appraised value, or the total commitment amount of loans senior to our position divided by projected total cost basis. Detachment loan-to-value reflect the cumulative commitment amount of our loan and the loans senior to our position divided by as-completed appraised value, or the cumulative commitment amount of our loan and loans senior to our position divided by projected total cost basis.
|
(7)
|
Represents equity participation interests related to senior loans, mezzanine loans and/or preferred equity investments.
|
(8)
|
Weighted average calculation for preferred equity and other loans excludes equity participation interests.
|
Collateral property type
|
|
Book value (at CLNC share)
|
|
% of total
|
|||
Office
|
|
$
|
903,911
|
|
|
31.8
|
%
|
Multifamily
|
|
792,276
|
|
|
28.0
|
%
|
|
Hotel
|
|
579,662
|
|
|
20.5
|
%
|
|
Other(1)
|
|
317,013
|
|
|
11.2
|
%
|
|
Industrial
|
|
239,681
|
|
|
8.5
|
%
|
|
Total
|
|
$
|
2,832,543
|
|
|
100.0
|
%
|
|
|
|
|
|
|||
Region
|
|
Book value (at CLNC share)
|
|
% of total
|
|||
West
|
|
$
|
1,569,656
|
|
|
55.4
|
%
|
Northeast
|
|
557,032
|
|
|
19.7
|
%
|
|
Southwest
|
|
283,325
|
|
|
10.0
|
%
|
|
Europe
|
|
202,780
|
|
|
7.2
|
%
|
|
Southeast
|
|
132,613
|
|
|
4.7
|
%
|
|
Midwest
|
|
74,940
|
|
|
2.6
|
%
|
|
Other(2)
|
|
12,197
|
|
|
0.4
|
%
|
|
Total
|
|
$
|
2,832,543
|
|
|
100.0
|
%
|
(1)
|
Other includes manufactured housing communities and commercial and residential development and predevelopment assets.
|
(2)
|
Other contains one corporate term loan secured by the borrower’s limited partnership interests in a fund and a preferred equity investment in a loan origination platform.
|
Interest Rate Category
|
|
Property Type
|
|
|
|
Geography
|
|
(1)
|
Other includes commercial and residential development and predevelopment assets, one corporate term loan secured by the borrower’s limited partnership interests in a fund, and a preferred equity investment in a loan origination platform.
|
(2)
|
Other contains one corporate term loan secured by the borrower’s limited partnership interests in a fund and a preferred equity investment in a loan origination platform.
|
|
|
|
|
|
|
Weighted Average(1)
|
||||||||||||
CRE Debt Securities by ratings category(2)
|
|
Number of Securities
|
|
Book value
|
|
Cash coupon
|
|
Unlevered all-in yield
|
|
Remaining term
|
|
Ratings
|
||||||
Investment grade rated
|
|
39
|
|
|
$
|
228,189
|
|
|
3.2
|
%
|
|
6.4
|
%
|
|
6.9
|
|
|
BBB-
|
Non-investment grade rated
|
|
4
|
|
|
27,748
|
|
|
3.3
|
%
|
|
11.9
|
%
|
|
5.5
|
|
|
BB | B
|
|
“B-pieces” of CMBS securitization pools
|
|
8
|
|
|
110,568
|
|
|
4.6
|
%
|
|
7.9
|
%
|
|
5.6
|
|
|
—
|
|
Total/Weighted Average
|
|
51
|
|
|
$
|
366,505
|
|
|
3.7
|
%
|
|
7.3
|
%
|
|
6.4
|
|
|
—
|
(1)
|
Weighted average metrics weighted by book value, except for cash coupon which is weighted by principal balance.
|
(2)
|
As of September 30, 2019, all CRE debt securities consisted of CMBS.
|
|
|
Count
|
|
Carrying Value(1)
|
|
Annualized Q3 NOI/EBITDA(2)
|
|||||
Net leased real estate
|
|
6
|
|
|
1,102,299
|
|
|
73,600
|
|
||
Total/Weighted average net leased real estate - Core Portfolio
|
|
6
|
|
|
$
|
1,102,299
|
|
|
$
|
73,600
|
|
(1)
|
Represents carrying values at our share as of September 30, 2019; includes deferred leasing costs and other intangible assets less intangible liabilities.
|
(2)
|
Annualized NOI/EBITDA is calculated by annualizing reported NOI for the third quarter 2019 at CLNC share. Net operating income is defined as property operating income excluding above/below market lease amortization less property operating expense. EBITDA is defined as net property operating income excluding interest, tax expense, depreciation and amortization.
|
(1)
|
Represents the percent leased as of September 30, 2019. Weighted average calculation based on carrying value at our share as of September 30, 2019.
|
(2)
|
Based on in-place leases (defined as occupied and paying leases) as of September 30, 2019 and assumes that no renewal options are exercised. Weighted average calculation based on carrying value at our share as of September 30, 2019.
|
Property Type
|
|
Geography
|
|
|
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
Net interest income
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
43,071
|
|
|
$
|
28,070
|
|
|
$
|
15,001
|
|
|
53.4
|
%
|
Interest expense
|
(21,324
|
)
|
|
(12,036
|
)
|
|
(9,288
|
)
|
|
(77.2
|
)%
|
|||
Interest income on mortgage loans held in securitization trusts
|
22,586
|
|
|
39,261
|
|
|
(16,675
|
)
|
|
(42.5
|
)%
|
|||
Interest expense on mortgage obligations issued by securitization trusts
|
(20,299
|
)
|
|
(36,294
|
)
|
|
(15,995
|
)
|
|
(44.1
|
)%
|
|||
Net interest income
|
24,034
|
|
|
19,001
|
|
|
5,033
|
|
|
26.5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Property and other income
|
|
|
|
|
|
|
|
|||||||
Property operating income
|
28,315
|
|
|
27,765
|
|
|
550
|
|
|
2.0
|
%
|
|||
Other income
|
779
|
|
|
441
|
|
|
338
|
|
|
76.6
|
%
|
|||
Total property and other income
|
29,094
|
|
|
28,206
|
|
|
888
|
|
|
3.1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses
|
|
|
|
|
|
|
|
|||||||
Management fee expense
|
9,084
|
|
|
9,501
|
|
|
(417
|
)
|
|
(4.4
|
)%
|
|||
Property operating expense
|
8,340
|
|
|
8,263
|
|
|
77
|
|
|
0.9
|
%
|
|||
Transaction, investment and servicing expense
|
863
|
|
|
1,735
|
|
|
(872
|
)
|
|
(50.3
|
)%
|
|||
Interest expense on real estate
|
8,695
|
|
|
8,075
|
|
|
620
|
|
|
7.7
|
%
|
|||
Depreciation and amortization
|
11,673
|
|
|
19,774
|
|
|
(8,101
|
)
|
|
(41.0
|
)%
|
|||
Impairment of operating real estate
|
23,911
|
|
|
—
|
|
|
23,911
|
|
|
100.0
|
%
|
|||
Administrative expense
|
4,171
|
|
|
3,711
|
|
|
460
|
|
|
12.4
|
%
|
|||
Total expenses
|
66,737
|
|
|
51,059
|
|
|
15,678
|
|
|
30.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Unrealized (loss) on mortgage loans and obligations held in securitization trusts, net
|
(1,976
|
)
|
|
(939
|
)
|
|
(1,037
|
)
|
|
110.4
|
%
|
|||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
2,724
|
|
|
(549
|
)
|
|
3,273
|
|
|
100.0
|
%
|
|||
Other loss, net
|
(2,682
|
)
|
|
(21
|
)
|
|
(2,661
|
)
|
|
12,671.4
|
%
|
|||
Loss before equity in earnings of unconsolidated ventures and income taxes
|
(15,543
|
)
|
|
(5,361
|
)
|
|
(10,182
|
)
|
|
189.9
|
%
|
|||
Equity in earnings of unconsolidated ventures
|
2,736
|
|
|
10,274
|
|
|
(7,538
|
)
|
|
(73.4
|
)%
|
|||
Income tax benefit (expense)
|
(201
|
)
|
|
91
|
|
|
(292
|
)
|
|
320.9
|
%
|
|||
Net loss
|
$
|
(13,008
|
)
|
|
$
|
5,004
|
|
|
$
|
(18,012
|
)
|
|
(360.0
|
)%
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
Net interest income
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
113,246
|
|
|
$
|
78,960
|
|
|
$
|
34,286
|
|
|
43.4
|
%
|
Interest expense
|
(58,013
|
)
|
|
(27,167
|
)
|
|
(30,846
|
)
|
|
(113.5
|
)%
|
|||
Interest income on mortgage loans held in securitization trusts
|
99,718
|
|
|
104,622
|
|
|
(4,904
|
)
|
|
(4.7
|
)%
|
|||
Interest expense on mortgage obligations issued by securitization trusts
|
(91,690
|
)
|
|
(97,031
|
)
|
|
5,341
|
|
|
5.5
|
%
|
|||
Net interest income
|
63,261
|
|
|
59,384
|
|
|
3,877
|
|
|
6.5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Property and other income
|
|
|
|
|
|
|
|
|||||||
Property operating income
|
87,882
|
|
|
56,646
|
|
|
31,236
|
|
|
55.1
|
%
|
|||
Other income
|
1,347
|
|
|
1,133
|
|
|
214
|
|
|
18.9
|
%
|
|||
Total property and other income
|
89,229
|
|
|
57,779
|
|
|
31,450
|
|
|
54.4
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses
|
|
|
|
|
|
|
|
|||||||
Management fee expense
|
27,256
|
|
|
25,334
|
|
|
1,922
|
|
|
7.6
|
%
|
|||
Property operating expense
|
25,187
|
|
|
16,413
|
|
|
8,774
|
|
|
53.5
|
%
|
|||
Transaction, investment and servicing expense
|
1,236
|
|
|
36,019
|
|
|
(34,783
|
)
|
|
(96.6
|
)%
|
|||
Interest expense on real estate
|
26,078
|
|
|
16,476
|
|
|
9,602
|
|
|
58.3
|
%
|
|||
Depreciation and amortization
|
37,645
|
|
|
37,901
|
|
|
(256
|
)
|
|
(0.7
|
)%
|
|||
Impairment of operating real estate
|
23,911
|
|
|
—
|
|
|
23,911
|
|
|
100.0
|
%
|
|||
Administrative expense
|
11,977
|
|
|
9,066
|
|
|
2,911
|
|
|
32.1
|
%
|
|||
Total expenses
|
153,290
|
|
|
141,209
|
|
|
12,081
|
|
|
8.6
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Unrealized gain on mortgage loans and obligations held in securitization trusts, net
|
4,602
|
|
|
3,254
|
|
|
1,348
|
|
|
41.4
|
%
|
|||
Realized gain (loss) on mortgage loans and obligations held in securitization trusts, net
|
2,772
|
|
|
(2,752
|
)
|
|
5,524
|
|
|
200.7
|
%
|
|||
Other loss, net
|
(12,524
|
)
|
|
(20
|
)
|
|
(12,504
|
)
|
|
62,520.0
|
%
|
|||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
(5,950
|
)
|
|
(23,564
|
)
|
|
17,614
|
|
|
74.7
|
%
|
|||
Equity in earnings of unconsolidated ventures
|
39,020
|
|
|
25,749
|
|
|
13,271
|
|
|
51.5
|
%
|
|||
Income tax benefit
|
1,428
|
|
|
91
|
|
|
1,337
|
|
|
1,469.2
|
%
|
|||
Net income
|
$
|
34,498
|
|
|
$
|
2,276
|
|
|
$
|
32,222
|
|
|
1,415.7
|
%
|
|
|
Count(1)
|
|
Book value
(Consolidated)
|
|
Book value
(at CLNC share)(2)
|
|||||
Legacy, Non-Strategic Portfolio
|
|
|
|
|
|
|
|||||
Senior mortgage loans(3)
|
|
10
|
|
|
$
|
170,467
|
|
|
$
|
169,938
|
|
Mezzanine loans(3)
|
|
6
|
|
|
70,208
|
|
|
70,153
|
|
||
Preferred equity(3)
|
|
1
|
|
|
22
|
|
|
22
|
|
||
Net leased real estate
|
|
6
|
|
|
60,214
|
|
|
60,214
|
|
||
Other real estate
|
|
41
|
|
|
599,643
|
|
|
532,435
|
|
||
Private equity interests
|
|
6
|
|
|
14,323
|
|
|
14,323
|
|
||
Total/Weighted average Legacy, Non-Strategic Portfolio
|
|
70
|
|
|
$
|
914,877
|
|
|
$
|
847,085
|
|
(1)
|
Count for net leased and other real estate represents number of investments.
|
(2)
|
Book value at our share represents the proportionate book value based on ownership by asset as of September 30, 2019.
|
(3)
|
Senior mortgage loans, mezzanine loans, and preferred equity include investments in joint ventures whose underlying interest is in a loan or preferred equity.
|
Investment Type
|
|
Property Type
|
|
|
|
Geography
|
|
(1)
|
Senior mortgage loans include junior participations in our originated senior mortgage loans for which we have syndicated the senior participations to other investors and retained the junior participations for our portfolio and contiguous mezzanine loans where we own both the senior and junior loan positions. We believe these investments are more similar to the senior mortgage loans we originate than other loan types given their credit quality and risk profile.
|
(2)
|
Mezzanine loans include other subordinated loans.
|
(3)
|
Other includes commercial and residential development and predevelopment assets.
|
|
|
|
|
|
|
|
|
Weighted Average(1)
|
||||||||||||||
|
|
Count
|
|
Book value (at CLNC share)(2)
|
|
Principal balance (2)
|
|
Cash coupon(3)
|
|
Unlevered all-in yield(4)
|
|
Remaining Term(5)
|
|
Extended Remaining Term(6)
|
||||||||
Senior loans
|
|
10
|
|
$
|
169,938
|
|
|
$
|
342,500
|
|
|
4.3
|
%
|
|
5.3
|
%
|
|
1.7
|
|
|
2.3
|
|
Mezzanine loans
|
|
6
|
|
70,153
|
|
|
138,311
|
|
|
1.9
|
%
|
|
14.1
|
%
|
|
1.0
|
|
|
1.9
|
|
||
Preferred equity
|
|
1
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total/Weighted average senior and mezzanine loans and preferred equity - Legacy, Non-Strategic Portfolio
|
|
17
|
|
$
|
240,113
|
|
|
$
|
480,811
|
|
|
3.6
|
%
|
|
7.9
|
%
|
|
1.5
|
|
|
2.2
|
|
(1)
|
Weighted average metrics weighted by book value at our share, except for cash coupon which is weighted by principal balance at our share.
|
(2)
|
Book value and principal balance at our share represents the proportionate value based on ownership by asset as of September 30, 2019.
|
(3)
|
Represents the stated coupon rate for loans; for floating rate loans, assumes USD 1-month LIBOR Interbank Offered Rate (“LIBOR”) which was 2.01% as of September 30, 2019.
|
(4)
|
In addition to the stated cash coupon rate, unlevered all-in yield includes non-cash payment in-kind interest income and the accrual of origination, extension and exit fees. Unlevered all-in yield for the loan portfolio assumes the applicable floating benchmark rate as of September 30, 2019 for weighted average calculations.
|
(5)
|
Represents the remaining term based on the current contractual maturity date of loans.
|
(6)
|
Represents the remaining term based on a maximum maturity date assuming all extension options on loans are exercised by the borrower.
|
|
|
|
|
|
|
|
|
Weighted Average(1)
|
|||||||||||||||
|
|
Number of loans
|
|
Book value
|
|
Principal balance
|
|
Spread to LIBOR
|
|
All-in unlevered yield(2)
|
|
Remaining term(3)
|
|
Extended remaining term(4)
|
|||||||||
Floating rate loans
|
|
9
|
|
|
$
|
143,938
|
|
|
$
|
302,529
|
|
|
4.0
|
%
|
|
4.6
|
%
|
|
1.8
|
|
|
2.6
|
|
Fixed rate loans(5)
|
|
8
|
|
|
96,175
|
|
|
178,281
|
|
|
—
|
|
|
12.8
|
%
|
|
1.0
|
|
|
1.7
|
|
||
Total/ Weighted average
|
|
17
|
|
|
$
|
240,113
|
|
|
$
|
480,810
|
|
|
—
|
|
|
7.9
|
%
|
|
1.5
|
|
|
2.2
|
|
(1)
|
Weighted average metrics weighted by book value at our share, except for spread to LIBOR, which is weighted by principal balance value at our share. Book and principal balances at share exclude $0.6 million of NCI. See the table located above in “Our Portfolio” for further information.
|
(2)
|
In addition to cash coupon, all-in unlevered yield includes the amortization of deferred origination fees, purchase price premium and discount, loan origination costs and accrual of both extension and exit fees. For weighted average calculations, all-in yield for the loan portfolio assumes the USD 1-month LIBOR as of September 30, 2019, which was 2.01%.
|
(3)
|
Represents the remaining term in years based on the original maturity date or current extension maturity date of loans.
|
(4)
|
Represents the remaining term in years based on a maximum maturity date assuming all extension options on loans are exercised by the borrower.
|
(5)
|
Includes one preferred equity investment.
|
Collateral property type
|
|
Book value
|
|
% of total
|
|||
Retail
|
|
$
|
111,099
|
|
|
46.3
|
%
|
Hotel
|
|
79,014
|
|
|
32.9
|
%
|
|
Other(1)
|
|
50,000
|
|
|
20.8
|
%
|
|
Total
|
|
$
|
240,113
|
|
|
100.0
|
%
|
|
|
|
|
|
|||
Region
|
|
Book value
|
|
% of total
|
|||
West
|
|
$
|
135,333
|
|
|
56.5
|
%
|
Northeast
|
|
62,027
|
|
|
25.8
|
%
|
|
Southeast
|
|
34,900
|
|
|
14.5
|
%
|
|
Southwest
|
|
7,255
|
|
|
3.0
|
%
|
|
Midwest
|
|
598
|
|
|
0.2
|
%
|
|
Total
|
|
$
|
240,113
|
|
|
100.0
|
%
|
(1)
|
Other includes commercial and residential development and predevelopment assets.
|
Interest Rate Category
|
|
Property Type
|
|
|
|
Geography
|
|
(1)
|
Other includes commercial and residential development and predevelopment assets.
|
•
|
During 2018, we recorded $23.8 million of provision for loan losses for two separate borrowers on three of our regional mall loans that are secured by two regional malls (“Northeast Regional Mall A” and “Northeast Regional Mall B”) to reflect the estimated fair value of the collateral. In June 2019, we completed foreclosure proceedings on two loans secured by Northeast Regional Mall A with unpaid principal balances of $36.9 million.
|
•
|
During the three and nine months ended September 30, 2019, we recognized provision for loan losses of $6.5 million and $10.5 million, respectively, on Northeast Regional Mall B. The additional provisions are based on current and prospective leasing activity to reflect the estimated fair value of the collateral. Interest payments are current and we have been and are continuing to sweep all cash.
|
•
|
Also, during the three and nine months ended September 30, 2019, we separately recognized provisions for loan loss of $16.5 million and $18.5 million, respectively, on two loans secured by one regional mall (“West Regional Mall”) to reflect the estimated fair value of the collateral. Interest payments are current and we have been and are continuing to sweep all cash.
|
•
|
Furthermore, during the three months ended September 30, 2019, we recognized a $37.3 million provision for loan loss on four loans to three separate borrowers (“South Regional Mall A”, “South Regional Mall B”, and “Midwest Regional Mall”) to reflect the estimated fair value of the collateral. Interest payments for South Regional Mall A, South Regional Mall B and Midwest Regional Mall are all current. The Company has been and is continuing to sweep all cash related to South Regional Mall A and South Regional Mall B.
|
|
|
Count
|
|
Carrying Value(1)
|
|
Annualized Q3 NOI/EBITDA(2)
|
|||||
Net leased real estate
|
|
6
|
|
|
$
|
60,214
|
|
|
$
|
7,508
|
|
Other real estate
|
|
41
|
|
|
532,435
|
|
|
41,280
|
|
||
Total/Weighted average owned real estate - Legacy, Non-Strategic Portfolio
|
|
47
|
|
|
$
|
592,649
|
|
|
$
|
48,788
|
|
(1)
|
Represents carrying values at our share as of September 30, 2019; includes deferred leasing costs and other intangible assets less intangible liabilities.
|
(2)
|
Annualized NOI/EBITDA is calculated by annualizing reported NOI for the third quarter 2019 at CLNC share. Net operating income is defined as property operating income excluding above/below market lease amortization less property operating expense. EBITDA is defined as net property operating income excluding interest expense, tax expense, depreciation and amortization.
|
|
|
Collateral type
|
|
City, State
|
|
Number of properties
|
|
Number of buildings
|
|
Rentable square feet (*RSF*) / units/keys
|
|
Weighted average % leased(1)
|
|
Weighted average lease term (yrs)(2)
|
||
Other real estate 39
|
|
Retail
|
|
Havre, MT
|
|
1
|
|
|
1
|
|
|
196,249 RSF
|
|
53%
|
|
0.5
|
Other real estate 40
|
|
Office
|
|
Lincoln, NE
|
|
1
|
|
|
1
|
|
|
193,838 RSF
|
|
34%
|
|
1.0
|
Other real estate 41
|
|
Office
|
|
Topeka, KS
|
|
1
|
|
|
1
|
|
|
195,500 RSF
|
|
72%
|
|
3.1
|
Total/Weighted average other real estate
|
|
51
|
|
|
167
|
|
|
n/a
|
|
86%
|
|
3.4
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total/Weighted average owned real estate - Legacy, Non-Strategic Portfolio
|
|
63
|
|
|
179
|
|
|
|
|
|
|
|
(1)
|
Represents the percent leased as of September 30, 2019. Weighted average calculation based on carrying value at our share as of September 30, 2019.
|
(2)
|
Based on in-place leases (defined as occupied and paying leases) as of September 30, 2019 and assumes that no renewal options are exercised. Weighted average calculation based on carrying value at our share as of September 30, 2019.
|
Property Type
|
|
Geography
|
|
|
|
Property Type
|
|
Geography
|
|
|
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
Net interest income
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
3,920
|
|
|
$
|
12,069
|
|
|
$
|
(8,149
|
)
|
|
(67.5
|
)%
|
Interest expense
|
(1,843
|
)
|
|
(1,112
|
)
|
|
(731
|
)
|
|
(65.7
|
)%
|
|||
Net interest income
|
2,077
|
|
|
10,957
|
|
|
(8,880
|
)
|
|
(81.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Property and other income
|
|
|
|
|
|
|
|
|||||||
Property operating income
|
35,177
|
|
|
23,919
|
|
|
11,258
|
|
|
47.1
|
%
|
|||
Other income
|
41
|
|
|
1,812
|
|
|
(1,771
|
)
|
|
(97.7
|
)%
|
|||
Total property and other income
|
35,218
|
|
|
25,731
|
|
|
9,487
|
|
|
36.9
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses
|
|
|
|
|
|
|
|
|||||||
Management fee expense
|
2,271
|
|
|
2,376
|
|
|
(105
|
)
|
|
(4.4
|
)%
|
|||
Property operating expense
|
21,416
|
|
|
12,954
|
|
|
8,462
|
|
|
65.3
|
%
|
|||
Transaction, investment and servicing expense
|
570
|
|
|
1,896
|
|
|
(1,326
|
)
|
|
(69.9
|
)%
|
|||
Interest expense on real estate
|
5,586
|
|
|
5,266
|
|
|
320
|
|
|
6.1
|
%
|
|||
Depreciation and amortization
|
14,261
|
|
|
10,764
|
|
|
3,497
|
|
|
32.5
|
%
|
|||
Provision for loan losses
|
110,314
|
|
|
35,059
|
|
|
75,255
|
|
|
214.7
|
%
|
|||
Impairment of operating real estate
|
248,811
|
|
|
29,378
|
|
|
219,433
|
|
|
100.0
|
%
|
|||
Administrative expense
|
3,561
|
|
|
3,086
|
|
|
475
|
|
|
15.4
|
%
|
|||
Total expenses
|
406,790
|
|
|
100,779
|
|
|
306,011
|
|
|
303.6
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Other gain (loss), net
|
(6
|
)
|
|
6
|
|
|
(12
|
)
|
|
(200.0
|
)%
|
|||
Income (loss) before equity in earnings of unconsolidated ventures and income taxes
|
(369,501
|
)
|
|
(64,085
|
)
|
|
(305,416
|
)
|
|
476.6
|
%
|
|||
Equity in earnings of unconsolidated ventures
|
(18,641
|
)
|
|
(1,950
|
)
|
|
(16,691
|
)
|
|
855.9
|
%
|
|||
Income tax benefit (expense)
|
(845
|
)
|
|
2,365
|
|
|
(3,210
|
)
|
|
135.7
|
%
|
|||
Net income (loss)
|
$
|
(388,987
|
)
|
|
$
|
(63,670
|
)
|
|
$
|
(325,317
|
)
|
|
510.9
|
%
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
Net interest income
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
14,227
|
|
|
$
|
34,113
|
|
|
$
|
(19,886
|
)
|
|
(58.3
|
)%
|
Interest expense
|
(5,492
|
)
|
|
(3,099
|
)
|
|
(2,393
|
)
|
|
(77.2
|
)%
|
|||
Net interest income
|
8,735
|
|
|
31,014
|
|
|
(22,279
|
)
|
|
(71.8
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Property and other income
|
|
|
|
|
|
|
|
|||||||
Property operating income
|
103,511
|
|
|
63,060
|
|
|
40,451
|
|
|
64.1
|
%
|
|||
Other income
|
84
|
|
|
2,019
|
|
|
(1,935
|
)
|
|
(95.8
|
)%
|
|||
Total property and other income
|
103,595
|
|
|
65,079
|
|
|
38,516
|
|
|
59.2
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses
|
|
|
|
|
|
|
|
|||||||
Management fee expense
|
6,814
|
|
|
6,334
|
|
|
480
|
|
|
7.6
|
%
|
|||
Property operating expense
|
60,889
|
|
|
32,773
|
|
|
28,116
|
|
|
85.8
|
%
|
|||
Transaction, investment and servicing expense
|
1,777
|
|
|
2,193
|
|
|
(416
|
)
|
|
(19.0
|
)%
|
|||
Interest expense on real estate
|
15,708
|
|
|
12,971
|
|
|
2,737
|
|
|
21.1
|
%
|
|||
Depreciation and amortization
|
45,208
|
|
|
34,788
|
|
|
10,420
|
|
|
30.0
|
%
|
|||
Provision for loan losses
|
220,572
|
|
|
34,542
|
|
|
186,030
|
|
|
538.6
|
%
|
|||
Impairment of operating real estate
|
258,935
|
|
|
29,378
|
|
|
229,557
|
|
|
100.0
|
%
|
|||
Administrative expense
|
10,418
|
|
|
7,843
|
|
|
2,575
|
|
|
32.8
|
%
|
|||
Total expenses
|
620,321
|
|
|
160,822
|
|
|
459,499
|
|
|
285.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Other loss, net
|
(1,305
|
)
|
|
480
|
|
|
(1,785
|
)
|
|
100.0
|
%
|
|||
Loss before equity in earnings of unconsolidated ventures and income taxes
|
(509,296
|
)
|
|
(64,249
|
)
|
|
(445,047
|
)
|
|
(692.7
|
)%
|
|||
Equity in earnings (losses) of unconsolidated ventures
|
(21,058
|
)
|
|
14,024
|
|
|
(35,082
|
)
|
|
(250.2
|
)%
|
|||
Income tax benefit (expense)
|
(1,972
|
)
|
|
2,756
|
|
|
(4,728
|
)
|
|
(171.6
|
)%
|
|||
Net income (loss)
|
$
|
(532,326
|
)
|
|
$
|
(47,469
|
)
|
|
$
|
(484,857
|
)
|
|
1,021.4
|
%
|
|
|
Three Months Ended September 30, 2019
|
||||||||||
|
|
Total
|
|
Legacy, Non-Strategic Portfolio
|
|
Core Portfolio
|
||||||
Reconciliation of GAAP Net Income to Core Earnings/Legacy, Non-Strategic Earnings
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to Colony Credit Real Estate, Inc. common stockholders
|
|
$
|
(356,031
|
)
|
|
$
|
(354,517
|
)
|
|
$
|
(1,514
|
)
|
Adjustments:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to noncontrolling interest of the Operating Partnership
|
|
(8,519
|
)
|
|
(8,483
|
)
|
|
(36
|
)
|
|||
Non-cash equity compensation expense
|
|
2,908
|
|
|
1,454
|
|
|
1,454
|
|
|||
Depreciation and amortization
|
|
26,232
|
|
|
13,800
|
|
|
12,432
|
|
|||
Net unrealized loss (gain):
|
|
|
|
|
|
|
|
|||||
Impairment of operating real estate and preferred equity(1)
|
|
294,677
|
|
|
253,166
|
|
|
41,511
|
|
|||
Other unrealized loss
|
|
2,458
|
|
|
6
|
|
|
2,452
|
|
|||
Adjustments related to noncontrolling interests in investment entities
|
|
(37,338
|
)
|
|
(25,697
|
)
|
|
(11,641
|
)
|
|||
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) attributable to Colony Credit Real Estate, Inc. common stockholders and noncontrolling interest of the Operating Partnership
|
|
$
|
(75,613
|
)
|
|
$
|
(120,271
|
)
|
|
$
|
44,658
|
|
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) per share(2)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
0.34
|
|
Weighted average number of common shares and OP units(2)
|
|
131,616
|
|
|
131,616
|
|
|
131,616
|
|
(1)
|
Includes our $22.0 million proportionate share of impairment losses recorded on equity participations held in joint ventures. This is recorded in equity in earnings of unconsolidated ventures on our consolidated statements of operations.
|
(2)
|
We calculate Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) per share, a non-GAAP financial measure, based on a weighted-average number of common shares and OP units (held by members other than us or our subsidiaries). For the third quarter 2019, weighted average number of common shares includes 3.1 million OP units.
|
|
|
Nine Months Ended September 30, 2019
|
||||||||||
|
|
Total
|
|
Legacy, Non-Strategic Portfolio
|
|
Core Portfolio
|
||||||
Reconciliation of GAAP Net Income to Core Earnings/Legacy, Non-Strategic Earnings
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to Colony Credit Real Estate, Inc. common stockholders
|
|
$
|
(448,464
|
)
|
|
$
|
(493,587
|
)
|
|
$
|
45,123
|
|
Adjustments:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to noncontrolling interest of the Operating Partnership
|
|
(10,741
|
)
|
|
(11,806
|
)
|
|
1,065
|
|
|||
Non-cash equity compensation expense
|
|
7,464
|
|
|
3,732
|
|
|
3,732
|
|
|||
Transaction costs(1)
|
|
674
|
|
|
262
|
|
|
412
|
|
|||
Depreciation and amortization
|
|
83,367
|
|
|
43,464
|
|
|
39,903
|
|
|||
Net unrealized loss (gain):
|
|
|
|
|
|
|
||||||
Impairment of operating real estate and preferred equity(2)
|
|
304,801
|
|
|
263,290
|
|
|
41,511
|
|
|||
Other unrealized loss (gain)
|
|
6,521
|
|
|
52
|
|
|
6,469
|
|
|||
Adjustments related to noncontrolling interests in investment entities
|
|
(40,114
|
)
|
|
(27,911
|
)
|
|
(12,203
|
)
|
|||
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) attributable to Colony Credit Real Estate, Inc. common stockholders and noncontrolling interest of the Operating Partnership
|
|
$
|
(96,492
|
)
|
|
$
|
(222,504
|
)
|
|
$
|
126,012
|
|
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) per share(3)
|
|
$
|
(0.73
|
)
|
|
$
|
(1.69
|
)
|
|
$
|
0.96
|
|
Weighted average number of common shares and OP units(3)
|
|
131,417
|
|
|
131,417
|
|
|
131,417
|
|
(1)
|
Represents transaction costs incurred as a result of the Combination.
|
(2)
|
Includes our $30.8 million proportionate share of impairment losses recorded on equity participations held in joint ventures. This is recorded in equity in earnings of unconsolidated ventures on our consolidated statements of operations.
|
(3)
|
We calculate Core Earnings/legacy, non-strategic earnings per share, a non-GAAP financial measure, based on a weighted-average number of common shares and OP units (held by members other than us or our subsidiaries). For the nine months ended September 30, 2019, weighted average number of common shares includes 3.1 million OP units.
|
|
|
September 30, 2019
|
|
December 31, 2018
|
Debt-to-equity ratio(1)
|
|
1.2x
|
|
0.9x
|
(1)
|
Represents (i) total outstanding secured debt less cash to (ii) total equity, in each case, at period end.
|
Total Sources of Corporate Liquidity
|
|
|
||
Cash and cash equivalents
|
|
$
|
60,332
|
|
Bank credit facility availability
|
|
401,500
|
|
|
Total sources of corporate liquidity
|
|
$
|
461,832
|
|
|
|
Maximum Facility Size
|
|
Current Borrowings
|
|
Weighted Average Final Maturity (Years)
|
|
Weighted Average Interest Rate
|
||||||
Master Repurchase Facilities
|
|
|
|
|
|
|
|
|
||||||
Bank 1
|
|
$
|
400,000
|
|
|
$
|
231,550
|
|
|
3.6
|
|
|
LIBOR + 1.88%
|
|
Bank 2
|
|
200,000
|
|
|
22,750
|
|
|
3.0
|
|
|
LIBOR + 2.50%
|
|
||
Bank 3
|
|
600,000
|
|
|
581,210
|
|
|
1.6
|
|
|
LIBOR + 2.17%
|
|
||
Bank 7
|
|
500,000
|
|
|
457,360
|
|
|
2.6
|
|
|
LIBOR + 1.85%
|
|
||
Bank 8
|
|
250,000
|
|
|
184,366
|
|
|
1.7
|
|
|
LIBOR + 1.96%
|
|
||
Bank 9
|
|
300,000
|
|
|
66,643
|
|
|
4.1
|
|
|
LIBOR + 1.65%
|
|
||
Total Master Repurchase Facilities
|
|
2,250,000
|
|
|
1,543,879
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
CMBS Credit Facilities
|
|
|
|
|
|
|
|
|
||||||
Bank 1
|
|
39,305
|
|
|
39,305
|
|
|
(1
|
)
|
|
LIBOR + 1.16%
|
|
||
Bank 6
|
|
165,872
|
|
|
165,872
|
|
|
(1
|
)
|
|
LIBOR + 1.19%
|
|
||
Bank 3(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Bank 4(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Bank 5(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total CMBS Credit Facilities
|
|
205,177
|
|
|
205,177
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Bank Credit Facility
|
|
560,000
|
|
|
158,500
|
|
|
3.3
|
|
|
LIBOR + 2.25%
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Total Facilities
|
|
$
|
3,015,177
|
|
|
$
|
1,907,556
|
|
|
|
|
|
(1)
|
The maturity dates on CMBS Credit Facilities are dependent upon asset type and will typically range from one to two months.
|
(2)
|
Amounts can be drawn under the Bank 3, Bank 4, and Bank 5 CMBS Credit Facilities, but we have not yet utilized them.
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||
Cash flow provided by (used in):
|
|
2019
|
|
2018
|
|
Change
|
||||||
Operating activities
|
|
$
|
113,205
|
|
|
$
|
64,394
|
|
|
$
|
48,811
|
|
Investing activities
|
|
(459,239
|
)
|
|
(279,122
|
)
|
|
(180,117
|
)
|
|||
Financing activities
|
|
358,368
|
|
|
319,919
|
|
|
38,449
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less than a Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Bank credit facility(1)
|
|
$
|
177,738
|
|
|
$
|
8,157
|
|
|
$
|
169,581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured debt(2)
|
|
3,460,107
|
|
|
1,265,605
|
|
|
883,323
|
|
|
277,329
|
|
|
1,033,850
|
|
|||||
Ground lease obligations(3)
|
|
38,418
|
|
|
3,133
|
|
|
6,254
|
|
|
5,658
|
|
|
23,373
|
|
|||||
|
|
3,676,263
|
|
|
$
|
1,276,895
|
|
|
$
|
1,059,158
|
|
|
$
|
282,987
|
|
|
$
|
1,057,223
|
|
|
Lending commitments(4)
|
|
313,802
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
3,990,065
|
|
|
|
|
|
|
|
|
|
(1)
|
Future interest payments were estimated based on the applicable index at September 30, 2019 and unused commitment fee of 0.35% per annum, assuming principal is repaid on the current maturity date of February 2022.
|
(2)
|
Amounts include minimum principal and interest obligations through the initial maturity date of the collateral assets. Interest on floating rate debt was determined based on the applicable index at September 30, 2019.
|
(3)
|
The Company assumed noncancellable operating ground leases as lessee or sublessee in connection with net lease properties acquired through the CLNY Contributions. The amounts represent minimum future base rent commitments through initial expiration dates of the respective leases, excluding any contingent rent payments. Rents paid under ground leases are recoverable from tenants.
|
(4)
|
Future lending commitments may be subject to certain conditions that borrowers must meet to qualify for such fundings. Commitment amount assumes future fundings meet the terms to qualify for such fundings.
|
•
|
capitalizing on asset level underwriting experience and market analytics to identify investments with pricing dislocations and attractive risk-return profiles;
|
•
|
originating and structuring CRE senior mortgage loans, mezzanine loans and preferred equity with attractive return profiles relative to the underlying value and financial operating performance of the real estate collateral, given the strength and quality of the sponsorship;
|
•
|
identifying appropriate CRE debt securities investments based on the performance of the underlying real estate assets, the impact of such performance on the credit return profile of the investments and our expected return on the investments;
|
•
|
identifying net leased real estate investments based on property location and purpose, tenant credit quality, market lease rates and potential appreciation of, and alternative uses for, the real estate;
|
•
|
creating capital appreciation opportunities through active asset management and equity participation opportunities; and
|
•
|
structuring transactions with a prudent amount of leverage, if any, given the risk of the underlying asset’s cash flows, attempting to match the structure and duration of the financing with the underlying asset’s cash flows, including through the use of hedges, as appropriate.
|
Exhibit Number
|
|
Description of Exhibit
|
2.1
|
|
|
3.1
|
|
|
3.2
|
|
|
10.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
101.INS*
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
COLONY CREDIT REAL ESTATE, INC.
|
||
|
|
|
By:
|
|
/s/ Kevin P. Traenkle
|
|
|
Kevin P. Traenkle
|
|
|
Chief Executive Officer and President and Director
|
|
|
(Principal Executive Officer)
|
|
|
|
By:
|
|
/s/ Neale W. Redington
|
|
|
Neale W. Redington
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
By:
|
|
/s/ Frank V. Saracino
|
|
|
Frank V. Saracino
|
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
|
(a)
|
the net proceeds received by the Company (or, without duplication, the Company’s direct Subsidiaries, such as Operating Company) from all issuances of Common Stock or such Subsidiaries’ common equity securities since inception (allocated on a pro rata daily basis for such issuances during the calendar quarter of any such issuance); plus
|
(b)
|
cumulative Core Earnings from and after the Effective Date to the end of the most recently completed calendar quarter,
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(a)
|
any distributions to the Company’s common stockholders (or owners of common equity of the Company’s direct Subsidiaries, such as Operating Company) (other than the Company or any of such Subsidiaries);
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(b)
|
any amount that the Company or any of the Company’s direct Subsidiaries (such as Operating Company) has paid to repurchase for cash the Common Stock or common equity securities of such Subsidiaries since the Effective Date; and
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(c)
|
any Incentive Fee paid to the Manager following the Effective Date.
|
(a)
|
the net proceeds received by the Company (or, without duplication, the Company’s direct Subsidiaries, such as Operating Company) from all issuances of the Company’s or such Subsidiaries’ common and preferred equity securities since inception (allocated on a pro rata daily basis for such issuances during the calendar quarter of any such issuance); plus
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(b)
|
cumulative Core Earnings from and after the Effective Date to the end of the most recently completed calendar quarter,
|
(a)
|
any distributions to the Company’s common stockholders (or owners of common equity of the Company’s direct Subsidiaries, such as Operating Company) (other than the Company or any of such Subsidiaries);
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(b)
|
any amount that the Company or any of the Company’s direct Subsidiaries (such as Operating Company) has paid to (1) repurchase for cash the Common Stock or common equity securities of such Subsidiaries or (2) repurchase or redeem for cash preferred equity securities of the Company or such Subsidiaries, in each case since the Effective Date; and
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(c)
|
any Incentive Fee paid to the Manager following the Effective Date.
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Colony Credit Real Estate, Inc.
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||
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By: /s/ David A. Palamé
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||
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Name: David A. Palamé
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||
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Title: General Counsel
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||
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Credit RE Operating Company, LLC
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||
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||
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By: /s/ David A. Palamé
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Name: David A. Palamé
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Title: Vice President
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||
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CLNC Manager, LLC
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||
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||
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By: /s/ Mark M. Hedstrom
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||
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Name: Mark M. Hedstrom
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||
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Title: Vice President
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a.
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No investment shall be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes;
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b.
|
No investment shall be made that would cause the Company or any Subsidiary to be required to be registered as an investment company under the Investment Company Act;
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c.
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Until appropriate investments can be identified, the Manager may invest the proceeds of the Company’s Initial Public Offering, if any, and any future offerings in interest-bearing, short-term investments, including money market accounts and/or U.S. treasury securities, that are consistent with the Company’s intention to qualify as a REIT and maintain its exemption from registration under the Investment Company Act;
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d.
|
No investment shall require prior approval of the Board of Directors or a majority of the Independent Directors solely because such investment constitutes (1) a co-investment made by and between the Company or any Subsidiary, on the one hand, and one or more investment vehicles formed, sponsored and managed by Constellation or any of its subsidiaries, on the other hand, regardless of when such co-investment is made, or (2) a transaction related to any such co-investment;
|
e.
|
Any investment with a total net commitment by Operating Company of greater than 5% of Operating Company’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by Operating Company being the aggregate amount of funds directly or indirectly committed by Operating Company to such investment net of any upfront fees received by the Company or any Subsidiary in connection with such investment); and
|
f.
|
Any investment with a total net commitment by Operating Company of between 3% and 5% of Operating Company’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by Operating Company being the aggregate amount of funds directly or indirectly committed by Operating Company to such investment net of any upfront fees received by the Company or any Subsidiary in connection with such investment), unless the investment falls within specific parameters approved by the Board of Directors and in effect at the time such commitment is made.
|
|
By:
|
|
/s/ Kevin P. Traenkle
|
|
|
|
Kevin P. Traenkle
|
|
|
|
Chief Executive Officer and President
|
|
Date:
|
|
November 8, 2019
|
|
By:
|
|
/s/ Neale W. Redington
|
|
|
|
Neale W. Redington
|
|
|
|
Chief Financial Officer and Treasurer
|
|
Date:
|
|
November 8, 2019
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
/s/ Kevin P. Traenkle
|
|
|
|
Kevin P. Traenkle
|
|
|
|
Chief Executive Officer and President
|
|
Date:
|
|
November 8, 2019
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
/s/ Neale W. Redington
|
|
|
|
Neale W. Redington
|
|
|
|
Chief Financial Officer and Treasurer
|
|
Date:
|
|
November 8, 2019
|