Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41572 | |
Entity Registrant Name | Star Holdings | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 37-6762818 | |
Entity Address, Address Line One | 1114 Avenue of the Americas, 39th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10036 | |
City Area Code | 212 | |
Local Phone Number | 930-9400 | |
Title of 12(b) Security | Common Shares of Beneficial Interest, $0.001 par value | |
Trading Symbol | STHO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Common Stock, Shares, Outstanding | 13,319,552 | |
Entity Central Index Key | 0001953366 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Combined and Consolidated Balan
Combined and Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Real estate | |||
Real estate, at cost | [1] | $ 97,400 | $ 94,593 |
Less: accumulated depreciation | [1] | (21,080) | (18,096) |
Real estate, net | [1] | 76,320 | 76,497 |
Land and development, net | [1] | 198,289 | 232,014 |
Loans receivable and other lending investments, net ($484 and $925 of allowances as of September 30, 2023 and December 31, 2022, respectively) | [1] | 20,173 | 48,655 |
Loan receivable held for sale | [1] | 37,650 | |
Other investments | [1] | 240,986 | 587,138 |
Cash and cash equivalents | [1] | 45,563 | 4,227 |
Accrued interest and operating lease income receivable, net | [1] | 851 | 1,132 |
Deferred operating lease income receivable, net | [1] | 1,042 | 1,137 |
Deferred expenses and other assets, net | [1] | 21,044 | 16,921 |
Total assets | [1] | 604,268 | 1,005,371 |
Liabilities: | |||
Accounts payable, accrued expenses and other liabilities | [1],[2] | 42,668 | 33,102 |
Debt obligations, net | [1] | 212,819 | |
Total liabilities | [1] | 255,487 | 33,102 |
Commitments and contingencies (refer to Note 10) | [1] | ||
Equity: | |||
Net Parent Investment | [1] | 971,543 | |
Star Holdings shareholders' equity: | |||
Common Stock, $0.001 par value, 200,000 shares authorized, 13,320 and zero shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | [1] | 13 | |
Additional paid-in capital | [1] | 607,623 | |
Accumulated deficit | [1] | (262,575) | |
Accumulated other comprehensive loss | [1] | (139) | |
Star Holdings shareholders' equity | [1] | 344,922 | |
Noncontrolling interests | [1] | 3,859 | 726 |
Total equity | [1] | 348,781 | 972,269 |
Total liabilities and equity | [1] | $ 604,268 | $ 1,005,371 |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). As of September 30, 2023, includes $7.2 million of management fees due to Safe (refer to Note 1). |
Combined and Consolidated Bal_2
Combined and Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Loans receivable and other lending investments, allowances | $ 484 | $ 925 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common Stock, shares issued (in shares) | 13,320,000 | 0 |
Common Stock, shares outstanding (in shares) | 13,319,552 | 0 |
Management fees due SAFE | $ 7,200 |
Combined and Consolidated State
Combined and Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenues: | |||||
Total revenues | $ 43,571 | $ 38,412 | $ 85,837 | $ 106,026 | |
Costs and expenses: | |||||
Depreciation and amortization | 1,125 | 1,150 | 3,295 | 3,561 | |
General and administrative | [1] | 7,310 | 28,960 | ||
General and administrative, net | [1] | 7,005 | 5,882 | ||
Provision for (recovery of) loan losses | 95 | (157) | 1,727 | 22,556 | |
Impairment of assets | 1,750 | ||||
Other expense | 181 | 118 | 783 | 274 | |
Total costs and expenses | 44,875 | 49,837 | 130,058 | 160,381 | |
Unrealized loss on equity investment | (80,189) | (247,121) | |||
Loss from operations before earnings from equity method investments and other items | (81,493) | (11,425) | (291,342) | (54,355) | |
Loss on early extinguishment of debt, net | (482) | (1,523) | |||
Earnings from equity method investments | 217 | 28,993 | 30,433 | 50,502 | |
Net income (loss) | (81,758) | 17,568 | (262,432) | (3,853) | |
Net (income) from operations attributable to noncontrolling interests | (56) | (57) | (58) | (46) | |
Net income (loss) allocable to common shareholders | $ (81,814) | $ 17,511 | $ (262,490) | $ (3,899) | |
Per common share data: | |||||
Net income (loss) allocable to common shareholders - Basic | $ (6.14) | $ 1.31 | $ (19.71) | $ (0.29) | |
Net income (loss) allocable to common shareholders - Diluted | $ (6.14) | $ 1.31 | $ (19.71) | $ (0.29) | |
Weighted average number of common shares: | |||||
Basic (in shares) | 13,320 | 13,320 | 13,320 | 13,320 | |
Diluted (in shares) | 13,320 | 13,320 | 13,320 | 13,320 | |
Nonrelated party | |||||
Costs and expenses: | |||||
Interest expense | $ 2,297 | $ 9,518 | $ 15,005 | $ 33,296 | |
Related party | |||||
Costs and expenses: | |||||
Interest expense | 2,100 | 4,200 | |||
Operating lease income | |||||
Revenues: | |||||
Total revenues | 1,866 | 3,424 | 5,177 | 9,715 | |
Interest income | |||||
Revenues: | |||||
Total revenues | 244 | 2,093 | 1,755 | 11,187 | |
Other income | |||||
Revenues: | |||||
Total revenues | [2] | 16,625 | 17,808 | 32,686 | 30,734 |
Land development revenue | |||||
Revenues: | |||||
Total revenues | 24,836 | 15,087 | 46,219 | 54,390 | |
Costs and expenses: | |||||
Cost of sales expense | 17,761 | 16,778 | 40,093 | 55,369 | |
Real estate expense | |||||
Costs and expenses: | |||||
Cost of sales expense | $ 14,006 | $ 15,425 | $ 35,995 | $ 37,693 | |
[1] For the three and nine months ended September 30, 2023, includes $6.3 million and $13.5 million, respectively, of management fees incurred to related parties. For the three months ended September 30, 2023 and 2022, includes $9.9 million and $10.0 million, respectively, of revenues from hotel properties. For the nine months ended September 30, 2023 and 2022, includes $18.0 million and $18.1 million, respectively, of revenues from hotel properties. |
Combined and Consolidated Sta_2
Combined and Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Total revenues | $ 43,571 | $ 38,412 | $ 85,837 | $ 106,026 | |
Related party | |||||
Management fees | 6,300 | 13,500 | |||
Other income | |||||
Total revenues | [1] | 16,625 | 17,808 | 32,686 | 30,734 |
Hotel properties | |||||
Total revenues | $ 9,900 | $ 10,000 | $ 18,000 | $ 18,100 | |
[1] For the three months ended September 30, 2023 and 2022, includes $9.9 million and $10.0 million, respectively, of revenues from hotel properties. For the nine months ended September 30, 2023 and 2022, includes $18.0 million and $18.1 million, respectively, of revenues from hotel properties. |
Combined and Consolidated Sta_3
Combined and Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ (81,758) | $ 17,568 | $ (262,432) | $ (3,853) | |
Other comprehensive income (loss): | |||||
Reclassification of losses on cash flow hedges into earnings upon realization | [1] | 211 | 5,933 | 661 | |
Reclassification of losses on available-for-sale securities | 386 | 0 | 386 | ||
Unrealized losses on available-for-sale securities | (139) | (139) | (4,623) | ||
Unrealized gains (losses) on cash flow hedges | 4,509 | (6,922) | 7,186 | ||
Other comprehensive income (loss) | (139) | 5,106 | (1,128) | 3,610 | |
Comprehensive income (loss) | (81,897) | 22,674 | (263,560) | (243) | |
Comprehensive (income) loss attributable to noncontrolling interests | (56) | (57) | (58) | (46) | |
Comprehensive income (loss) attributable to common shareholders | $ (81,953) | $ 22,617 | $ (263,618) | $ (289) | |
[1] Reclassified to “Earnings from equity method investments” in the Company’s combined and consolidated statements of operations for the Company’ impact of designated cash flow hedges at Safe (refer to Note 7). |
Combined and Consolidated Sta_4
Combined and Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Net Parent Investment | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |
Beginning Balance at Dec. 31, 2021 | $ 1,223,695 | $ 689 | $ 1,224,384 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (3,899) | 46 | (3,853) | |||||
Change in accumulated other comprehensive income (loss) | 3,610 | 3,610 | ||||||
Stock-based compensation | (13,166) | (13,166) | ||||||
Net transactions with iStar Inc. | (69,056) | (69,056) | ||||||
Ending Balance at Sep. 30, 2022 | 1,141,184 | 735 | 1,141,919 | |||||
Beginning Balance at Jun. 30, 2022 | 1,152,778 | 678 | 1,153,456 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 17,511 | 57 | 17,568 | |||||
Change in accumulated other comprehensive income (loss) | 5,106 | 5,106 | ||||||
Stock-based compensation | (176) | (176) | ||||||
Net transactions with iStar Inc. | (34,035) | (34,035) | ||||||
Ending Balance at Sep. 30, 2022 | 1,141,184 | 735 | 1,141,919 | |||||
Beginning Balance at Dec. 31, 2022 | 971,543 | 726 | 972,269 | [1] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | $ (262,575) | 85 | 58 | (262,432) | ||||
Change in accumulated other comprehensive income (loss) | (989) | $ (139) | (1,128) | |||||
Stock-based compensation | 1,778 | 1,778 | ||||||
Change to noncontrolling interest | (23) | (23) | ||||||
Common shares issued in conjunction with Spin-Off (refer to Note 1) | $ 13 | $ 607,623 | (607,636) | |||||
Net transactions with iStar Inc. | $ (364,781) | (364,781) | ||||||
Contributions from noncontrolling interests | 3,098 | 3,098 | ||||||
Ending Balance at Sep. 30, 2023 | 13 | 607,623 | (262,575) | (139) | 3,859 | 348,781 | [1] | |
Beginning Balance at Jun. 30, 2023 | 13 | 607,623 | (180,761) | 3,803 | 430,678 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (81,814) | 56 | (81,758) | |||||
Change in accumulated other comprehensive income (loss) | (139) | (139) | ||||||
Ending Balance at Sep. 30, 2023 | $ 13 | $ 607,623 | $ (262,575) | $ (139) | $ 3,859 | $ 348,781 | [1] | |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Combined and Consolidated Sta_5
Combined and Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (262,432) | $ (3,853) |
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||
Provision for loan losses | 1,727 | 22,556 |
Impairment of assets | 1,750 | |
Depreciation and amortization | 3,295 | 3,561 |
Stock-based compensation | 1,778 | (13,166) |
Amortization of discounts/premiums and deferred interest on loans, net | (719) | (6,615) |
Deferred interest on loans received | 4,517 | 4,738 |
Amortization of premium, discount and deferred financing costs on debt obligations, net | 408 | |
Earnings from equity method investments | (30,433) | (50,502) |
Distributions from operations of other investments | 19,459 | 23,353 |
Deferred operating lease income | 95 | 317 |
Unrealized loss on equity investment | 247,121 | |
Loss on early extinguishment of debt | 1,523 | |
Land development revenue (in excess of) cost of sales | (6,126) | 979 |
Other operating activities, net | 489 | (2,683) |
Changes in assets and liabilities: | ||
Changes in accrued interest and operating lease income receivable | 723 | 791 |
Changes in deferred expenses and other assets, net | (3,258) | 468 |
Changes in accounts payable, accrued expenses and other liabilities | 8,858 | 88 |
Cash flows used in operating activities | (12,975) | (18,218) |
Cash flows from investing activities: | ||
Originations and fundings of loans receivable and other lending investments, net | (6,388) | (5,831) |
Capital expenditures on real estate assets | (882) | (588) |
Capital expenditures on land and development assets | (7,245) | (15,945) |
Repayments of and principal collections on loans receivable and other lending investments, net | 31,757 | 90,615 |
Net proceeds from sales of loans receivable | 37,650 | 49,382 |
Net proceeds from sales of land and development assets | 42,768 | 51,580 |
Distributions from other investments | 47,411 | 8,913 |
Contributions to and acquisition of interest in other investments | (80,399) | |
Other investing activities, net | 810 | 10,054 |
Cash flows provided by investing activities | 145,881 | 107,781 |
Cash flows from financing activities: | ||
Net transactions with iStar Inc | (290,077) | (74,916) |
Borrowings from debt obligations | 253,070 | |
Repayments of debt obligations | (50,000) | |
Payments for deferred financing costs | (1,262) | |
Payments for debt prepayment or extinguishment costs | (895) | |
Cash flows used in financing activities | (89,164) | (74,916) |
Changes in cash, cash equivalents and restricted cash | 43,742 | 14,647 |
Cash, cash equivalents and restricted cash at beginning of period | 7,474 | 17,074 |
Cash, cash equivalents and restricted cash at end of period | $ 51,216 | $ 31,721 |
Combined and Consolidated Sta_6
Combined and Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Reconciliation of cash and cash equivalents and restricted cash presented on the combined and consolidated statements of cash flows | |||
Cash and cash equivalents | $ 45,563 | [1] | $ 29,744 |
Restricted cash included in deferred expenses and other assets, net | 5,653 | 1,977 | |
Total cash and cash equivalents and restricted cash | 51,216 | 31,721 | |
Supplemental disclosure of non-cash investing and financing activity: | |||
Net transactions with iStar Inc. | (74,704) | $ 5,860 | |
Settlement of debt obligations | 115,000 | ||
Assumption of debt obligations from iStar Inc. | 125,000 | ||
Origination of loan receivable | 2,550 | ||
Accounts payable for capital expenditures on land and development and real estate assets | $ 1,037 | ||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Business and Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2023 | |
Business and Organization | |
Business and Organization | Note 1—Business and Organization On March 31, 2023, Star Holdings, a Maryland statutory trust (the "Company," "Star Holdings," "we" or "us") completed a series of reorganization and separation transactions (collectively, the “Spin-Off”) in accordance with the terms of a Separation and Distribution Agreement (the “Separation and Distribution Agreement”), dated as of March 31, 2023, by and between iStar Inc., a Maryland corporation ("iStar"), and Star Holdings. To effectuate the Spin-Off: (i) iStar contributed its remaining legacy non-ground lease assets, 13,522,651 shares of common stock of Safehold Inc. (the “Safe Shares”) and certain other assets (“iStar Included Assets”) to Star Holdings; and (ii) iStar distributed 100% of the common shares of beneficial interest in Star Holdings to holders of common stock of iStar ("iStar Common Stock") by way of a pro rata distribution of 0.153 common shares of Star Holdings for each outstanding share of iStar Common Stock held on the record date of the distribution. The Spin-Off became effective at 12:02 a.m., Eastern Time, on March 31, 2023 (the “Spin-Off Effective Time”). Following the Spin-Off, Star Holdings became an independent, publicly traded company. Star Holdings' common shares commenced regular-way trading on the Nasdaq Global Market (the “Nasdaq”) under the symbol “STHO” on March 31, 2023. Shortly after the Spin-Off, iStar completed its previously-announced merger (the "Merger") with Safehold Inc., a Maryland corporation. iStar continued as the surviving corporation in the Merger and changed its name to “Safehold Inc.” ("Safe"). The Company operates its business as one segment that focuses on realizing value for shareholders primarily by generating cash flows through active asset management and sales of its existing loans, operating properties and land and development properties. The combined and consolidated financial statements of the Company include loans and other lending investments, operating properties and land and development assets that represent the assets, liabilities and operations from the assets included in the Spin-Off. References to "iStar" in the notes to the Company's financial statements refer to iStar prior to the closing of the Merger and the Spin-Off. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2023 | |
Business and Organization | |
Basis of Presentation and Principles of Consolidation | Note 2—Basis of Presentation and Principles of Consolidation Basis of Presentation The accompanying unaudited combined and consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. These unaudited combined and consolidated financial statements and related notes should be read in conjunction with the combined and consolidated financial statements and related notes included in the Information Statement. The preparation of these combined and consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. In the opinion of management, the accompanying combined and consolidated financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year. The combined and consolidated financial statements of the Company prior to the Spin-off on March 31, 2023 represented a combination of entities under common control that have been “carved out” from iStar’s consolidated financial statements. Historically, financial statements of the Company have not been prepared as it was not operated separately from iStar. These combined and consolidated financial statements reflect the revenues and expenses of the Company and include certain assets and liabilities that were included in the Spin-Off, which have been reflected at iStar’s historical basis. All intercompany balances and transactions have been eliminated. The combined and consolidated financial statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had the Company operated as a standalone company during the periods presented. These combined and consolidated financial statements include an allocation of general and administrative expenses and interest expense to the Company from iStar through the date of the Spin-Off. General and administrative expenses include certain iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations. General and administrative expenses, including stock-based compensation, represent a pro rata allocation of costs from iStar’s real estate finance, operating properties, land and development and corporate business segments based on the Company’s average net assets for those segments as a percentage of iStar’s average net assets for those segments. Interest expense, net of amounts capitalized, was allocated to the Company by calculating the Company’s average net assets as a percentage of the average net assets in iStar’s segments and multiplying that percentage by the interest expense allocated to iStar’s segments. The Company believes the allocation methodology for general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense and interest expense allocations presented in our combined and consolidated statements of operations for historical periods does not necessarily reflect what our general and administrative expenses and interest expense will be as a standalone public company. For the three months ended September 30, 2022, the Company was allocated $7.0 million of general and administrative expense and $9.5 million of interest expense. For the three months ended September 30, 2022, the general and administrative expense allocation includes ($0.2) million of stock-based compensation (refer to Note 3). For the nine months ended September 30, 2023 and 2022, the Company was allocated $14.1 million and $5.9 million, respectively, of general and administrative expense and $8.0 million and $33.3 million, respectively, of interest expense. For the nine months ended September 30, 2023 and 2022, the general and administrative expense allocation includes $1.8 million and ($13.2) million, respectively, of stock-based compensation (refer to Note 3). Subsequent to the Spin-Off, the Company has its own general and administrative expense and interest expense as a stand-alone public company. Prior to the Spin-Off, certain of the entities included in the Company’s financial statements did not have bank accounts for the periods presented, and certain cash transactions for the Company were transacted through bank accounts owned by iStar. The combined and consolidated statements of cash flows for the periods presented were prepared as if operating, investing and financing transactions for the Company had been transacted through its own bank accounts. Principles of Combination and Consolidation The combined and consolidated financial statements include on a carve-out basis the historical balance sheets and statements of operations and cash flows of assets, liabilities and operations included in the Spin-Off. For periods prior to March 31, 2023, the Company was allocated a number of shares of Safe common stock based on estimates driven by the total value of stock that iStar expected to contribute to the Company and the price per share of Safe common stock (refer to Note 7). Information for the periods subsequent to March 31, 2023 reflect the actual number of Safe Shares contributed to the Company. Consolidated VIEs As of September 30, 2023 December 31, 2022 ASSETS Real estate Real estate, at cost $ 94,624 $ 94,159 Less: accumulated depreciation (20,505) (18,033) Real estate, net 74,119 76,126 Land and development, net 112,662 128,717 Cash and cash equivalents 18,610 3,754 Accrued interest and operating lease income receivable, net 23 — Deferred operating lease income receivable, net 7 6 Deferred expenses and other assets, net 7,331 6,921 Total assets $ 212,752 $ 215,524 LIABILITIES Accounts payable, accrued expenses and other liabilities $ 26,198 $ 24,406 Total liabilities 26,198 24,406 Unconsolidated VIEs |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3—Summary of Significant Accounting Policies Real estate and land and development — Real estate and land and development assets are recorded at cost less accumulated depreciation and amortization, as follows: Capitalization and depreciation — Certain improvements and replacements are capitalized when they extend the useful life of the asset. For real estate projects, the Company begins to capitalize qualifying development and construction costs, including interest, real estate taxes, compensation and certain other carrying costs incurred which are specifically identifiable to a development project once activities necessary to get the asset ready for its intended use have commenced. If specific allocation of costs is not practicable, the Company will allocate costs based on relative fair value prior to construction or relative sales value, relative size or other methods as appropriate during construction. The Company’s policy for interest capitalization on qualifying real estate assets is to use the average amount of accumulated expenditures during the period the asset is being prepared for its intended use, which is typically when physical construction commences, and a capitalization rate which is derived from specific borrowings on the qualifying asset or the Company’s corporate borrowing rate in the absence of specific borrowings. The Company ceases capitalization on the portions substantially completed and ready for their intended use. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method of cost recovery over the estimated useful life, which is generally 40 years for facilities, five years for furniture and equipment, the shorter of the remaining lease term or expected life for tenant improvements and the remaining useful life of the facility for facility improvements. Purchase price allocation — The Company’s acquisition of properties are generally accounted for as asset acquisitions. For asset acquisitions, the Company recognizes and measures identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree based on their relative fair values and acquisition-related costs are capitalized and recorded in “Real estate, net” on the Company’s combined and consolidated balance sheets. The Company accounts for its acquisition of properties by recording the purchase price of tangible and intangible assets and liabilities acquired based on their relative fair values. The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant. Intangible assets may include the value of above-market leases and in-place leases which are each recorded at their relative fair values and included in “Deferred expenses and other assets, net” on the Company’s combined and consolidated balance sheets. Intangible liabilities may include the value of below-market leases, which are recorded at their relative fair values and included in “Accounts payable, accrued expenses and other liabilities” on the Company’s combined and consolidated balance sheets. In-place leases are amortized over the remaining non-cancelable term and the amortization expense is included in “Depreciation and amortization” in the Company’s combined and consolidated statements of operations. Above-market (or below-market) lease value is amortized as a reduction of (or increase to) operating lease income over the remaining non-cancelable term of each lease plus any renewal periods with fixed rental terms that are considered to be below-market. The Company may also engage in sale/leaseback transactions and execute leases with the occupant simultaneously with the purchase of the asset. These transactions are accounted for as asset acquisitions. Impairments — The Company reviews real estate assets to be held for use and land and development assets, for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The value of a long-lived asset held for use and land and development assets are impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate assets and land and development assets, when applicable, are recorded in “Impairment of assets” in the Company’s combined and consolidated statements of operations. Dispositions — Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with Accounting Standards Codification (“ASC”) 610-20 , Gains and Losses from the Derecognition of Nonfinancial Assets. The Company primarily uses specific identification and the relative sales value method to allocate costs. Gains on sales of real estate are included in “Income from sales of real estate” in the Company’s combined and consolidated statements of operations. Loans receivable and other lending investments, net — Loans receivable and other lending investments, net includes both senior mortgages and subordinate mortgages. Management considers nearly all of its loans to be held-for-investment, although certain investments may be classified as held-for-sale or available-for-sale. Loans receivable classified as held-for-investment are reported at their outstanding unpaid principal balance net of any unamortized acquisition premiums or discounts and unamortized deferred loan costs or fees. These loans could also include accrued and paid-in-kind interest and accrued exit fees that the Company determines are probable of being collected. Debt securities classified as available-for-sale are reported at fair value with unrealized gains and losses recorded in “Accumulated other comprehensive income (loss)” on the Company’s combined and consolidated balance sheets. Realized gains on the sale of available-for-sale securities are recorded in “Other income” in the Company’s combined and consolidated statements of operations. Loans receivable and other lending investments designated for sale are classified as held-for-sale and are carried at lower of amortized cost or estimated fair value. The amount by which carrying value exceeds fair value is recorded as a valuation allowance. Subsequent changes in the valuation allowance are included in the determination of net income (loss) in the period in which the change occurs. Based on the Company’s strategic plan to realize the maximum value from the collateral received, property is classified as “Land and development, net,” “Real estate, net” or “Real estate available and held for sale,” when the appropriate held for sale criteria are met, at its estimated fair value when title to the property is obtained. Any excess of the carrying value of the loan over the estimated fair value of the property (less costs to sell for assets held for sale) is charged-off against the allowance for loan losses as of the date of foreclosure. Equity investments — Equity interests are accounted for pursuant to the equity method of accounting if the Company can significantly influence the operating and financial policies of an investee. The Company’s periodic share of earnings and losses in equity method investees is included in “Earnings from equity method investments” in the combined and consolidated statements of operations. Equity method investments are included in “Other investments” on the Company’s combined and consolidated balance sheets. The Company also has equity interests that are not accounted for pursuant to the equity method of accounting. These equity interests are carried at cost, plus or minus any changes in value identified through observable comparable price changes in transactions in identical or similar investments of the same entity. These investments are included in “Other investments” on the Company’s combined and consolidated balance sheets and the changes in fair value for these investments are included in “Unrealized loss on equity investment” in the combined and consolidated statements of operations. The Company periodically reviews equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges are recorded in “Earnings from equity method investments” in the Company’s combined and consolidated statements of operations. Cash and cash equivalents — Cash and cash equivalents include cash held in bank accounts. Prior to the Spin-Off, certain of the entities included in the Company’s combined and consolidated financial statements did not have bank accounts for the periods presented, and certain cash transactions for the Company were transacted through bank accounts owned by iStar. Cash and cash equivalents presented on the Company’s combined and consolidated balance sheets represents cash held in bank accounts directly attributable to the Company. Restricted cash — Restricted cash represents amounts required to be maintained for certain of the Company’s loans, real estate and land and development properties. Restricted cash is included in “Deferred expenses and other assets, net” on the Company’s combined and consolidated balance sheets. Variable interest entities — The Company evaluates its investments and other contractual arrangements to determine if they constitute variable interests in a VIE. A VIE is an entity where a controlling financial interest is achieved through means other than voting rights. A VIE is consolidated by the primary beneficiary, which is the party that has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This overall consolidation assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision-making powers, their impact on the VIE’s economic performance, and related party relationships. Where qualitative assessment is not conclusive, the Company performs a quantitative analysis. The Company reassesses its evaluation of the primary beneficiary of a VIE on an ongoing basis and assesses its evaluation of an entity as a VIE upon certain reconsideration events. Deferred expenses and other assets / Accounts payable, accrued expenses and other liabilities — Deferred expenses and other assets include right-of-use operating lease assets, prepaid expenses, certain non-tenant receivables and leasing costs. Leasing costs that include brokerage, legal and other costs are amortized over the life of the respective leases and presented as an operating activity in the Company’s combined and consolidated statements of cash flows. Accounts payable, accrued expenses and other liabilities primarily includes unearned revenue, accrued expenses and operating lease liabilities. The Company, as lessee, records right-of-use operating lease assets in “Deferred expenses and other assets” and operating lease liabilities in “Accounts payable, accrued expenses and other liabilities,” both initially measured at the present value of the fixed and determinable lease payments. Some of the Company’s lease agreements include extension options, which are not included in the lease payments unless the extensions are reasonably certain to be exercised. For operating leases, the Company recognizes a single lease cost for ground leases in “Real estate expense” in the combined and consolidated statements of operations, calculated so that the cost of the lease is allocated generally on a straight-line basis over the term of the lease, and classifies all cash payments within operating activities in the combined and consolidated statements of cash flows. Identified intangible assets and liabilities — Upon the acquisition of a business or an asset, the Company records intangible assets or liabilities acquired at their relative fair values and determines whether such intangible assets or liabilities have finite or indefinite lives. As of September 30, 2023, all such intangible assets and liabilities acquired by the Company have finite lives. Intangible assets are included in “Deferred expenses and other assets, net” and intangible liabilities are included in “Accounts payable, accrued expenses and other liabilities” on the Company’s combined and consolidated balance sheets. The Company amortizes finite lived intangible assets and liabilities based on the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the business acquired. The Company reviews finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the Company determines the carrying value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets, when applicable, are recorded in “Impairment of assets” in the Company’s combined and consolidated statements of operations. Revenue recognition — The Company’s revenue recognition policies are as follows: Operating lease income: For the Company’s leases classified as operating leases, operating lease income is recognized on the straight-line method of accounting generally from the later of the date the lessee takes possession of the space or the space is ready for its intended use. If the Company acquires a facility subject to an existing operating lease, the Company will recognize operating lease income on the straight-line method beginning on the date of acquisition. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease revenue recognized under this method and contractual lease payment terms is recorded as “Deferred operating lease income receivable, net” on the Company’s combined and consolidated balance sheets. The Company also recognizes revenue from certain tenant leases for reimbursements of all or a portion of operating expenses, including common area costs, insurance, utilities and real estate taxes of the respective property. This revenue is accrued in the same periods as the expense is incurred and is recorded as “Operating lease income” in the Company’s combined and consolidated statements of operations. Revenue is also recorded from certain tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the defined threshold has been met for the period. The Company moves to cash basis operating lease income recognition in the period in which collectability of all lease payments is no longer considered probable. At such time, any operating lease receivable or deferred operating lease income receivable balance will be written off. If and when lease payments that were previously not considered probable of collection become probable, the Company will move back to the straight-line method of income recognition and record an adjustment to operating lease income in that period as if the lease was always on the straight-line method of income recognition. Interest Income: Interest income on loans receivable is recognized on an accrual basis using the interest method. On occasion, the Company may acquire loans at premiums or discounts. These discounts and premiums in addition to any deferred costs or fees, are typically amortized over the contractual term of the loan using the interest method. Exit fees are also recognized over the lives of the related loans as a yield adjustment, if management believes it is probable that such amounts will be received. If loans with premiums, discounts, loan origination or exit fees are prepaid by borrowers, the Company immediately recognizes the unamortized portion, which is included in “Other income” or “Other expense” in the Company’s combined and consolidated statements of operations. The Company considers a loan to be non-performing and places it on non-accrual status at such time as: (1) interest payments become 90 days delinquent; (2) it has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. While on non-accrual status, based on the Company’s judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash, or on a cost-recovery basis, where all cash receipts reduce a loan’s carrying value. Non-accrual loans are returned to accrual status when a loan has become contractually current and management believes all amounts contractually owed will be received. Certain of the Company’s loans contractually provide for accrual of interest at specified rates that differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management’s determination that accrued interest and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the borrower. Certain of the Company’s loan investments provide for additional interest based on the borrower’s operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon receipt of cash. Other income: Other income includes dividend income from our investment in Safe (refer to Note 7), ancillary income from our operating properties, land and development projects and loan portfolio, revenues from golf course operations and hotel operations, which are recognized when rooms are occupied, and the related services are provided. Hotel revenues include room sales, food and beverage sales, parking, telephone, spa services and gift shop sales. Other ancillary income could include gains from sales of loans, loan prepayment fees, yield maintenance payments, lease termination fees and other ancillary income. Land development revenue and cost of sales: Land development revenue includes lot, unit and parcel sales from wholly-owned or majority-owned properties and is recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs. Allowance for loan losses — The Company performs quarterly a comprehensive analysis of its loan portfolio and assigns risk ratings that incorporate management’s current judgments about credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower or tenant financial resources and investment collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being risk rated, with ratings ranging from “1” to “5” with “1” representing the lowest risk of loss and “5” representing the highest risk of loss. Upon adoption of ASU 2016-13 on January 1, 2020, the Company implemented procedures to estimate its expected loss (“Expected Loss”) on its loans (including unfunded loan commitments) and held-to-maturity debt securities based on relevant information including historical realized loss rates, current market conditions and reasonable and supportable forecasts that affect the collectability of its investments. The estimate of the Company’s Expected Loss requires significant judgment and the Company analyzes its loan portfolio based upon its different categories of financial assets, which includes: (i) loans and held-to-maturity debt securities; and (ii) construction loans. For the Company’s loans, held-to-maturity debt securities and construction loans, the Company analyzed its historical realized loss experience to estimate its Expected Loss. The Company adjusts its Expected Loss through the use of third-party market data that provided current and future economic conditions that may impact the performance of the commercial real estate assets securing its investments. The Company considers a loan to be non-performing and places it on non-accrual status at such time as: (1) interest payments become 90 days delinquent; (2) it has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. Non-accrual loans are returned to accrual status when they have become contractually current and management believes all amounts contractually owed will be received. The Company will record a specific allowance on a non-performing loan if the Company determines that the collateral fair value less costs to sell is less than the carrying value of the collateral-dependent asset. The specific allowance is increased (decreased) through “Provision for (recovery of) loan losses” in the Company’s combined and consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower or tenant as the Company works toward a settlement or other alternative resolution, which can impact the potential for repayment or receipt of collateral. The Company’s policy is to charge off a loan when it determines, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when the Company receives cash or other assets in a pre-foreclosure sale or takes control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when the Company has otherwise ceased significant collection efforts. The Company considers circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related allowance will be charged off. The Company made the accounting policy election to record accrued interest on its loan portfolio separate from its loans receivable and other lending investments and to exclude accrued interest from its amortized cost basis disclosures (refer to Note 6). As of September 30, 2023 and December 31, 2022, accrued interest was $0.1 million and $0.1 million, respectively, and is recorded in “Accrued interest and operating lease income receivable, net” on the Company’s combined and consolidated balance sheets. The Company places loans on non-accrual status once interest on the loan becomes 90 days delinquent and reverses any accrued interest as a reduction to interest income or recognizes a credit loss expense at such time. As such, the Company elected the practical expedient to not record an allowance against accrued interest receivable. During the three and nine months ended September 30, 2023 and 2022, the Company did not reverse any accrued interest on its loan portfolio. As of September 30, 2023, the Company did not have any non-performing loans. Loans receivable held for sale are carried at the lower of amortized cost or estimated fair value. The Company generally uses the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In some cases, the Company obtains external “as is” appraisals for loan collateral, generally when third party participations exist. Valuations are performed or obtained at the time a loan is determined to be impaired or designated non- performing, and they are updated if circumstances indicate that a significant change in value has occurred. In limited cases, appraised values may be discounted when real estate markets rapidly deteriorate. Management evaluates available-for-sale debt securities held in “Loans receivable and other lending investments, net” for impairment if the security’s fair value is less than its amortized cost. If the Company has an impaired security, it will then determine if: (1) the Company has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery; or (3) it does not expect to recover the entire amortized cost basis of the security. If the Company does not intend to sell the security, it is more likely than not that the entity will not be required to sell the security or it does not expect to recover its amortized cost, the Company will record an allowance for credit losses. The credit loss component of the allowance will be recorded (or reversed, if necessary), when applicable, as a “Provision for loan losses” in the Company’s combined and consolidated statements of operations, and the remainder of the allowance will be recorded in “Accumulated other comprehensive income (loss)” on the Company’s combined and consolidated balance sheets. The Company also adopted ASU 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) on January 1, 2023. ASU 2022-02 eliminated troubled debt restructuring recognition and measurement guidance and requires disclosure of gross write-offs by vintage for public business entities. The adoption of ASU 2022-02 did not have a material impact on the Company’s combined and consolidated financial statements. Stock-based compensation — The Company does not have any stock-based compensation plans; however, prior to the Spin-Off, the Company has been allocated stock-based compensation expense from iStar, related to awards made to employees of iStar under its 2009 Long-Term Incentive Plan, for the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 (refer to Note 2). iStar’s compensation cost for stock-based awards was measured on the grant date and adjusted over the period of the employees’ services to reflect: (i) actual forfeitures; and (ii) the outcome of awards with performance or service conditions through the requisite service period. iStar’s compensation cost for market-based awards was determined using a Monte Carlo model to simulate a range of possible future stock prices for iStar’s common stock, which is reflected in the grant date fair value. All compensation cost for market-based awards in which the service conditions are met is recognized regardless of whether the market-condition is satisfied. Compensation costs are recognized ratably over the applicable vesting/service period. Income taxes — The Company is subject to U.S. federal and state income taxation at corporate rates on its net taxable income. The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the carrying amounts in accordance with GAAP and the tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. Deferred income taxes could also reflect the impact of net operating loss and tax credit carryforwards. The Company evaluates whether its deferred tax assets are realizable and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating whether its deferred tax assets are realizable, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This analysis is inherently subjective, and requires the Company to forecast its business and general economic environment in future periods. Changes in estimates of our valuation allowance, if any, are included in “Income tax (expense) benefit” in the combined and consolidated statements of operations. The Company recognizes interest expense and penalties related to uncertain tax positions, if any, as “Income tax (expense) benefit” in the Company’s combined and consolidated statements of operations. For the nine months ended September 30, 2023, the Company recorded a deferred income tax benefit in the amount of $16.6 million related primarily to unrealized losses on the Company’s equity investments and impairments. For the nine months ended September 30, 2023, the Company also recorded an offsetting income tax expense of $16.6 million to increase the valuation allowance and reduce the Company's deferred tax assets to their more likely than not net realizable value, which is zero as of September 30, 2023. Other — In addition, the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to “opt out” of this extended transition period, and as a result, it will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. The Company’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. The Company will remain an “emerging growth company” until the earliest to occur of: (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion (subject to adjustment for inflation); (ii) the last day of the fiscal year following the fifth anniversary of the Company’s registration statement becoming effective; (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended. |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate | Note 4—Real Estate The Company’s real estate assets were comprised of the following ($ in thousands): As of September 30, 2023 December 31, 2022 Land, at cost $ 5,570 $ 5,570 Buildings and improvements, at cost 91,830 89,023 Less: accumulated depreciation (21,080) (18,096) Real estate, net $ 76,320 $ 76,497 Tenant Reimbursements— and $1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $1.5 million and $2.4 million for the nine months ended September 30, 2023 and 2022, respectively. Allowance for Doubtful Accounts— Future Minimum Operating Lease Payments Year Amount 2023 (remaining three months) $ 1,080 2024 4,243 2025 4,224 2026 4,203 2027 1,570 Thereafter 1,117 |
Land and Development
Land and Development | 9 Months Ended |
Sep. 30, 2023 | |
Land And Development [Abstract] | |
Land and Development | Note 5—Land and Development The Company’s land and development assets were comprised of the following ($ in thousands): As of September 30, December 31, 2023 2022 Land and land development, at cost $ 210,266 $ 243,727 Less: accumulated depreciation (11,977) (11,713) Total land and development, net $ 198,289 $ 232,014 Dispositions— In September 2023, the Company sold a land parcel to a third-party and provided the buyer with a loan to finance the acquisition. If the buyer prepays the loan in full on or before a specified date, it will receive a discounted purchase price. The Company recorded the loan based on the discounted purchase price at origination since collection of the discounted portion of the sale is undetermined. The loan to the buyer is included in “Loans receivable and other lending investments, net” on the Company’s combined and consolidated balance sheet. |
Loans Receivable and Other Lend
Loans Receivable and Other Lending Investments, net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Loans Receivable and Other Lending Investments, net | Note 6—Loans Receivable and Other Lending Investments, net The following is a summary of the Company’s loans receivable and other lending investments by class ($ in thousands): As of September 30, 2023 December 31, 2022 Construction loans Senior mortgages $ — $ 36,249 Subtotal - gross carrying value of construction loans — 36,249 Loans Senior mortgages 2,550 — Subordinate mortgages 14,026 13,331 Subtotal - gross carrying value of loans 16,576 13,331 Other lending investments Available-for-sale debt securities 4,081 — Subtotal - other lending investments 4,081 — Total gross carrying value of loans receivable and other lending investments 20,657 49,580 Allowance for loan losses (484) (925) Total loans receivable and other lending investments, net $ 20,173 $ 48,655 Allowance for Loan Losses General Allowance Held to Construction Maturity Debt Specific Three Months Ended September 30, 2023 Loans Loans Securities Allowance Total Allowance for loan losses at beginning of period $ — $ 389 $ — $ — $ 389 Provision for loan losses (1) — 95 — — 95 Allowance for loan losses at end of period $ — $ 484 $ — $ — $ 484 Three Months Ended September 30, 2022 Allowance for loan losses at beginning of period $ 861 $ 450 $ 1,014 $ 708 $ 3,033 Provision for (recovery of) loan losses (1) (13) (72) (67) 9 (143) Allowance for loan losses at end of period $ 848 $ 378 $ 947 $ 717 $ 2,890 (1) During the three months ended September 30, 2023 and 2022, the Company recorded a provision for (recovery of) loan losses of $0.1 million and ($0.2) million, respectively, in its combined and consolidated statements of operations. The provision in 2023 was due primarily to the origination of a new loan during the three months ended September 30, 2023. The recovery in 2022 was due primarily to the repayment of loans during the three months ended September 30, 2022. Changes in the Company’s allowance for loan losses were as follows for the nine months ended September 30, 2023 and 2022 ($ in thousands): General Allowance Held to Construction Maturity Debt Specific Nine Months Ended September 30, 2023 Loans Loans Securities Allowance Total Allowance for loan losses at beginning of period $ 92 $ 437 $ — $ 396 $ 925 (Recovery of) provision for loan losses (1) (92) 47 — (396) (441) Allowance for loan losses at end of period $ — $ 484 $ — $ — $ 484 Nine Months Ended September 30, 2022 Allowance for loan losses at beginning of period $ 1,213 $ 676 $ 2,304 $ 576 $ 4,769 Provision for (recovery of) loan losses (1) (365) (298) 23,643 141 23,121 Charge-offs (1) — — (25,000) — (25,000) Allowance for loan losses at end of period $ 848 $ 378 $ 947 $ 717 $ 2,890 (1) During the nine months ended September 30, 2023 and 2022, the Company recorded a provision for loan losses of $1.7 million and $22.6 million, respectively, in its combined and consolidated statements of operations. The provision in 2023 was due primarily to a $2.2 million provision on the sale of a loan held for sale, which was partially offset by a recovery of loan losses due to the repayment of loans during the nine months ended September 30, 2023. The provision in 2022 was due primarily to a $25.0 million charge-off on the Company’s held-to-maturity debt security, which was recorded at the repayment proceeds received in 2022. The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows as of September 30, 2023 and December 31, 2022 ($ in thousands): Individually Collectively Evaluated for Evaluated for Impairment (1) Impairment Total As of September 30, 2023 Loans $ — $ 16,576 $ 16,576 Available-for-sale debt securities (2) — 4,081 4,081 Less: Allowance for loan losses — (484) (484) Total $ — $ 20,173 $ 20,173 As of December 31, 2022 Construction loans $ 29,493 $ 6,756 $ 36,249 Loans — 13,331 13,331 Less: Allowance for loan losses (396) (529) (925) Total $ 29,097 $ 19,558 $ 48,655 (1) The carrying value of this loan includes amortized fees of $0.1 million as of December 31, 2022. The Company’s loans individually evaluated for impairment represent loans on non-accrual status and the unamortized amounts associated with these loans are not currently being amortized into income. (2) Available-for-sale debt securities were evaluated for impairment under ASC 326-30 — Financial Instruments-Credit Losses. Credit Characteristics The Company’s amortized cost basis in performing senior mortgage and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of September 30, 2023 were as follows ($ in thousands): Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Total Senior mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 2,550 — — — — — 2,550 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ 2,550 $ — $ — $ — $ — $ — $ 2,550 Subordinate mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — 14,026 14,026 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ — $ 14,026 $ 14,026 Total $ 2,550 $ — $ — $ — $ — $ 14,026 $ 16,576 The Company’s amortized cost basis in performing senior mortgages and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of December 31, 2022 were as follows ($ in thousands): Year of Origination 2022 2021 2020 2019 2018 Prior to 2018 Total Senior mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — — — 3.5 — — — — 6,756 — 6,756 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ 6,756 $ — $ 6,756 Subordinate mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — 13,331 13,331 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ — $ 13,331 $ 13,331 Total $ — $ — $ — $ — $ 6,756 $ 13,331 $ 20,087 The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands): Less Than Greater or Equal Than Total Current to 90 Days 90 Days Past Due Total As of September 30, 2023 Senior mortgages $ 2,550 $ — $ — $ — $ 2,550 Subordinate mortgages 14,026 — — — 14,026 Total $ 16,576 $ — $ — $ — $ 16,576 As of December 31, 2022 Senior mortgages $ 6,756 $ 29,493 $ — $ 29,493 $ 36,249 Subordinate mortgages 13,331 — — — 13,331 Total $ 20,087 $ 29,493 $ — $ 29,493 $ 49,580 Impaired Loans As of September 30, 2023 As of December 31, 2022 Unpaid Unpaid Amortized Principal Related Amortized Principal Related Cost Balance Allowance Cost Balance Allowance With an allowance recorded: Senior mortgages (1) $ — $ — $ — $ 29,493 $ 29,358 $ (396) Total $ — $ — $ — $ 29,493 $ 29,358 $ (396) (1) The Company had one non-accrual loan as of December 31, 2022 that was considered impaired and included in the table above. The Company did no t record any interest income on impaired loans for the three and nine months ended September 30, 2023 and 2022. Loans receivable held for sale Other lending investments— Other lending investments includes the following securities ($ in thousands): Net Net Amortized Unrealized Estimated Carrying Face Value Cost Basis Gain (Loss) Fair Value Value As of September 30, 2023 Available-for-sale securities Municipal debt securities (1) $ 4,220 $ 4,220 $ (139) $ 4,081 $ 4,081 Total $ 4,220 $ 4,220 $ (139) $ 4,081 $ 4,081 (1) In September 2023, the Company acquired two securities for $4.2 million. The securities both accrue interest at 7.0% and mature in July 2053. |
Other Investments
Other Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
Other Investments | Note 7—Other Investments The Company’s other investments and its proportionate share of earnings from equity investments were as follows ($ in thousands): Earnings from Earnings from Carrying Value Equity Method Investments Equity Method Investments as of For the Three Months Ended For the Nine Months Ended September 30, December 31, September 30, September 30, 2023 2022 2023 2022 2023 2022 Safehold Inc. ("Safe") (1) $ 240,703 $ 554,733 $ — $ 16,052 $ 1,089 $ 27,956 Other real estate and strategic equity investments (2) 283 32,405 217 12,941 29,344 22,546 Total $ 240,986 $ 587,138 $ 217 $ 28,993 $ 30,433 $ 50,502 (1) As of September 30, 2023, the Company owned 13.5 million shares of Safe common stock which, based on the closing price of $17.80 on September 29, 2023, had a market value of $240.7 million. The Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321 – Investments – Equity Securities (“ASC 321”), which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. As such, the Company recognized an “Unrealized loss on equity investment” of $80.2 million and $247.1 million, respectively, in its combined and consolidated statements of operations for the three and nine months ended September 30, 2023. Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 – Investments – Equity Method and Joint Ventures (“ASC 323”) due to its ability to exercise significant influence. Pursuant to ASC 323-10-40-1, an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment. Any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. For the nine months ended September 30, 2022, equity in earnings includes $0.3 million of dilution gains resulting from Safe equity offerings. As of December 31, 2022, the Company was allocated ownership of approximately 15.2 million shares of Safe common stock from iStar. The allocation was adjusted based upon the final terms of the Spin-Off on March 31, 2023, and the Company’s investment basis was reduced by approximately 1.8 million shares with a carrying value of approximately $65.6 million, which was adjusted against additional paid-in capital within equity. (2) For the nine months ended September 30, 2023, the Company recorded $29.3 million in earnings from equity method investments primarily from the sale of properties within its equity method investments. For the nine months ended September 30, 2022, the Company recognized earnings from equity method investments of $11.5 million primarily from the sale of a multifamily property at one of our ventures and $5.0 million primarily from the settlement of our interest in a venture. Safehold Inc. On March 31, 2023, the Company entered into the following agreements with Safe: Separation and Distribution Agreement Management Agreement Company’s assets and its and its subsidiaries’ day-to-day operations, subject to the supervision of Board of Trustees of the Company (the “Board”). Pursuant to the Management Agreement, the manager is required to provide the Company with a management team, including a chief executive officer, a chief financial officer and a chief compliance officer, along with support personnel, to provide the management services to be provided by the manager to the Company. The manager does not assume any responsibility other than to render the services called for thereunder and is not responsible for any action of the Board in following or declining to follow its advice or recommendations. The initial term of the Management Agreement will expire on the first anniversary of the date of the Management Agreement and will be automatically renewed for a one-year term each anniversary date thereafter unless previously terminated pursuant to the terms thereof. The Company will pay the manager fixed cash management fees of $25.0 million, $15.0 million, $10.0 million and $5.0 million, respectively, in each of the initial four annual terms of the Management Agreement and 2.0% of the gross book value of the Company’s assets excluding the Safe Shares for each annual term thereafter, and will reimburse the manager for third party expenses incurred in connection with its services. During the three and nine months ended September 30, 2023, the Company recorded $6.3 million and $13.5 million, respectively, of management fees to the Manager. The Management Agreement may be terminated by the Company without cause by not less than one hundred eighty days’ written notice to the Manager upon the affirmative vote of at least two In the event of a termination without cause by the Company prior to the fourth anniversary of the Spin-Off, the Company will pay the Manager a termination fee of $50.0 million minus the aggregate amount of management fees actually paid to the Manager prior to the termination date. However, if the Company has completed the liquidation of its assets on or before the termination date, the termination fee will consist of any portion of the annual management fee that remained unpaid for the remainder of the then current annual term plus, if the termination date occurs on or before the third anniversary of the Spin-Off, the amount of the management fee that would have been payable for the next succeeding annual term, or if the termination date occurs after the third anniversary of the Spin-Off, zero. In the event of a termination by the Manager based on a reduction in the amount of the Company’s combined and consolidated assets below designated thresholds, the Company will pay the Manager a termination fee of $30.0 million if the termination occurs in the first year, $15.0 million if the termination occurs in the second year and $5.0 million if the termination occurs in the third year, in each case, plus the balance of any unpaid portion of the annual management fee for the applicable year. Governance Agreement Pursuant to the terms of the Governance Agreement, the Company and its subsidiaries are subject to customary restrictions on the transfer of Safe Shares held by the Company for nine months. Furthermore, the Company and its subsidiaries are prohibited from transferring at any time any the Safe Shares held by the Company or its subsidiaries to any person who is known by the Company or its subsidiaries to be an “Activist” or “Company Competitor” (as such terms are defined in the Governance Agreement), or to any group that, to the knowledge of the Company or its subsidiaries, includes as “Activist” or “Company Competitor,” without first obtaining the Safe’s prior written consent. During a “restrictive period” which lasts until the earliest to occur of (i) the effective date on which Safe terminates the Management Agreement; or (ii) the date on which we beneficially own less than 7.5% of Safe’s outstanding common stock and Safe is no longer our external manager; or (iii) a Change of Control of Safe (as defined in the Governance Agreement), we and our directly or indirectly wholly owned subsidiaries are required to vote the Safe Shares in accordance with the recommendations of the board of directors of Safe. We have irrevocably designated and appointed the board of directors of Safe as our sole and exclusive attorney-in-fact and proxy with full power of substitution and re-substitution to exercise the voting power of our shares of Safe in accordance with these requirements. We will also be subject to certain standstill agreements during the restrictive period. The terms of such standstill agreements will restrict us from making certain acquisitions of Safe securities, seeking representation on Safe’s board of directors, participating in the solicitation of proxies or written consents of Safe shareholders, and taking other actions which could seek to influence or result in a change of control of Safe or cause or require Safe to make certain public announcements, except as permitted by the governance agreement or with the prior written consent of the independent directors of the board of directors of Safe. Registration Rights Agreement Safe Credit Facility . Other real estate and strategic equity investments Summarized investee financial information Revenues Expenses Net Income Attributable to Safe (1) For the Three Months Ended March 31, 2023 (2) Safe $ 78,329 $ 75,875 $ 4,682 For the Nine Months Ended September 30, 2022 Safe $ 196,943 $ 136,517 $ 113,628 (1) Net Income Attributable to Safe also includes gain on sale of net investment in leases and earnings from equity method investments. (2) Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 due to its ability to exercise significant influence. Subsequent to the Spin-Off, the Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321, which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. |
Other Assets and Other Liabilit
Other Assets and Other Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Other Assets and Other Liabilities [Abstract] | |
Other Assets and Other Liabilities | Note 8—Other Assets and Other Liabilities Deferred expenses and other assets, net, consist of the following items ($ in thousands): (1) As of September 30, 2023 December 31, 2022 Other assets (1) $ 11,001 $ 9,471 Operating lease right-of-use assets (2) 1,492 1,860 Restricted cash 5,653 3,247 Other receivables 2,516 1,895 Leasing costs, net (3) 109 129 Intangible assets, net (4) 273 319 Deferred expenses and other assets, net $ 21,044 $ 16,921 (1) As of September 30, 2023 and December 31, 2022, other assets primarily includes prepaid expenses and deposits for certain real estate assets. (2) Right-of use lease assets initially equal the lease liability. For operating leases, rent expense is recognized on a straight-line basis over the term of the lease and is recorded in “Real estate expense” in the Company’s combined and consolidated statements of operations. During the three months ended September 30, 2023 and 2022, the Company recognized $0.1 million and $0.1 million, respectively, in “Real estate expense” in its combined and consolidated statements of operations relating to operating leases. During the nine months ended September 30, 2023 and 2022, the Company recognized $0.4 million and $0.5 million, respectively, in “Real estate expense” in its combined and consolidated statements of operations relating to operating leases. (3) Accumulated amortization of leasing costs was $0.1 million and $0.1 million as of September 30, 2023 and December 31, 2022, respectively. (4) Intangible assets, net includes above market and in-place lease assets related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was $0.1 million and $0.1 million as of September 30, 2023 and December 31, 2022, respectively. The amortization of above market leases decreased operating lease income in the Company’s combined and consolidated statements of operations by $8 thousand and $0.1 million, respectively, for the three and nine months ended September 30, 2022. These intangible lease assets are amortized over the remaining term of the lease. As of September 30, 2023, the weighted average remaining amortization period for the Company’s intangible assets was approximately 5.1 years. Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands): As of September 30, 2023 December 31, 2022 Other liabilities (1) $ 36,304 $ 26,235 Accrued expenses 4,716 4,861 Operating lease liabilities (see table above) 1,648 2,006 Accounts payable, accrued expenses and other liabilities $ 42,668 $ 33,102 (1) As of September 30, 2023, “Other liabilities” includes $20.1 million of deferred income, $7.2 million of management fees due Safe and $6.2 million of other payables related to real estate properties. As of December 31, 2022, “Other liabilities” includes $21.2 million of deferred income and $2.5 million of other payables related to real estate properties. |
Debt Obligations, net
Debt Obligations, net | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations, net | Note 9—Debt Obligations, net The Company’s debt obligations were as follows ($ in thousands): Carrying Value as of Stated Scheduled September 30, 2023 December 31, 2022 Interest Rates Maturity Date Debt obligations: Safe Credit Facility $ 115,000 $ — 8.00 % March 2027 Margin Loan Facility 100,000 — SOFR plus 3.00 % March 2026 Total debt obligations 215,000 — Debt discounts and deferred financing costs, net (2,181) — Total debt obligations, net (1) $ 212,819 $ — (1) During the three and nine months ended September 30, 2023, the Company capitalized interest expense on qualifying real estate assets of $0.6 million and $1.6 million, respectively. Future Scheduled Maturities 2023 $ — 2024 — 2025 — 2026 100,000 2027 115,000 Thereafter — Total principal maturities 215,000 Unamortized discounts and deferred financing costs, net (2,181) Total debt obligations, net $ 212,819 Safe Credit Facility Interest on borrowings under the Safe Credit Facility is payable in cash and accrues interest at a rate of (x) 8.00% per annum or (y) to the extent any loan remains outstanding under an incremental facility available under the Safe Credit Facility at such time, 10.00% per annum, as applicable. Amounts outstanding under the Safe Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty. Refer to Note 15 for details on the amendment to the terms of the Safe Credit Facility. The Company paid a $0.6 million commitment fee in connection with the Safe Credit Facility. The Safe Credit Facility is secured by a first priority pledge of the equity interests in certain subsidiaries of the Company. During the three and nine months ended September 30, 2023, the Company incurred $2.4 million and $4.8 million, respectively, of interest expense gross of amounts capitalized on the Safe Credit Facility, which is included in “Interest expense – related party” in the Company’s combined and consolidated statements of operations. Margin Loan Facility of the Margin Loan Facility on March 31, 2023 and directed that approximately $88.0 million of the proceeds be applied to redeem iStar’s senior unsecured notes due 2024, 2025 and 2026. The Company repaid $40.0 million principal amount of the Margin Loan Facility during the six months ended September 30, 2023. The Margin Loan Facility is initially secured by a first priority pledge of the Safe Shares and has a maturity of March 31, 2026. Refer to Note 15 for details on the amendment to the terms of the Margin Loan Facility. Interest on the Margin Loan Facility is payable in cash; provided, that STAR SPV may, at its option, elect that the interest for any future interest period be paid-in-kind. Amounts outstanding under the Margin Loan Facility accrue interest at a rate equal to term SOFR for a three-month tenor plus a spread. Amounts outstanding under the Margin Loan Facility may be prepaid at any time upon prior notice, in whole or in part, subject to the payment of any applicable make-whole amount. During the three months ended March 31, 2023, the Company assumed a $125.0 million loan payable to iStar. The loan had an interest rate of 8.0%. As a result, the Company recognized $2.5 million of interest expense during the nine months ended September 30, 2023. The loan was repaid during the three months ended March 31, 2023. Debt Covenants The Margin Loan Facility requires that STAR SPV comply with various covenants, including, without limitation, covenants restricting, subject to certain exceptions, indebtedness, liens, investments and the payment of dividends. Additionally, the Margin Loan Facility includes customary representations and warranties, events of default and other creditor protections for this type of facility. Upon the occurrence of certain events which are customary for this type of facility, STAR SPV may be required to prepay all amounts due under the Margin Loan Facility or post additional collateral in accordance with the Margin Loan Facility and related agreements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10—Commitments and Contingencies Commitments Future minimum lease obligations under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands): (1) 2023 (remaining three months) $ 121 2024 486 2025 486 2026 486 2027 162 Thereafter — Total undiscounted cash flows 1,741 Present value discount (1) (93) Lease liabilities $ 1,648 (1) The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at inception at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 3.0% and the weighted average remaining lease term is 3.6 years. Legal Proceedings The Company and/or one or more of its subsidiaries is party to various pending litigation matters that are considered ordinary routine litigation incidental to the Company’s business as a finance and investment company focused on the commercial real estate industry, including foreclosure-related proceedings. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material effect on the Company’s combined and consolidated financial statements. |
Risk Management
Risk Management | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Note 11—Risk Management Risk management In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different points in time and potentially at different bases, than its interest-earning assets. Credit risk is the risk of default on the Company’s lending investments or leases that result from a borrower’s or tenant’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of loans and other lending investments due to changes in interest rates or other market factors, including the rate of prepayments of principal and the value of the collateral underlying loans, the valuation of real estate assets by the Company as well as changes in foreign currency exchange rates. Risk concentrations— Concentrations of credit risks arise when a number of borrowers, tenants or investees related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. All of the Company’s real estate and assets collateralizing its loans receivable are located in the United States. As of September 30, 2023, the Company’s portfolio contains concentrations in the following property types: entertainment/leisure, land and development, hotel, condominium and retail and the Safe Shares. The Company underwrites the credit of prospective borrowers and tenants and often requires them to provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company’s loans and real estate assets are geographically diverse and the borrowers and tenants operate in a variety of industries, to the extent the Company has a significant concentration of interest or operating lease revenues from any single borrower or tenant, the inability of that borrower or tenant to make its payment could have a material adverse effect on the Company. In addition, declines in the market price of Safe common stock could require the Company to post additional collateral or prepay some or all of the outstanding borrowings under the Margin Loan Facility. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity | |
Equity | Note 12—Equity Common Stock— iStar distributed 100% of the common shares of beneficial interest in the Company to holders of common stock of iStar ("iStar Common Stock") by way of a pro rata distribution of 0.153 common shares of the Company for each outstanding share of iStar Common Stock held on the record date of the distribution. Net Parent Investment— Accumulated Other Comprehensive Income (Loss) |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 13—Earnings Per Share The following table presents a reconciliation of income from operations used in the basic and diluted earnings per share (“EPS”) calculations ($ in thousands, except for per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) $ (81,758) $ 17,568 $ (262,432) $ (3,853) Net (income) loss from operations attributable to noncontrolling interests (56) (57) (58) (46) Net income (loss) allocable to common shareholders $ (81,814) $ 17,511 $ (262,490) $ (3,899) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Earnings allocable to common shares: Numerator for basic and diluted earnings per share: Net income (loss) allocable to common shareholders $ (81,814) $ 17,511 $ (262,490) $ (3,899) Denominator for basic and diluted earnings per share: (1) Weighted average common shares outstanding for basic and diluted earnings per common share 13,320 13,320 13,320 13,320 Basic and diluted earnings per common share: Net income (loss) allocable to common shareholders $ (6.14) $ 1.31 $ (19.71) $ (0.29) (1) For all periods presented prior to the Spin-Off, the weighted average shares outstanding for the EPS calculation assumes the pro rata distribution of 0.153 common shares of the Company’s common stock for each outstanding share of iStar Common Stock on the record date of the distribution were issued and outstanding. |
Fair Values
Fair Values | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Values | Note 14—Fair Values Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Certain of the Company’s assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis. The following fair value hierarchy table summarizes the Company’s assets recorded at fair value on a recurring or non-recurring basis by the above categories as of September 30, 2023 and December 31, 2022 ($ in thousands): Fair Value Using Quoted market Significant prices in other Significant active observable unobservable markets inputs inputs Total (Level 1) (Level 2) (Level 3) As of September 30, 2023 Recurring basis: Available-for-sale debt securities (1) $ 4,081 $ — $ — $ 4,081 Other investments (refer to Note 7) 240,703 240,703 — — As of December 31, 2022 Non-recurring basis: Real estate, net (2) $ 811 $ — $ — $ 811 Impaired land and development (3) 26,300 — — 26,300 Loans receivable held for sale (refer to Note 6) 37,650 — — 37,650 (1) The fair value of the Company’s available-for-sale debt securities are based upon unadjusted third-party broker quotes and are classified as Level 3. (2) During the year ended December 31, 2022, the Company recorded a $1.8 million impairment on an operating property with an estimated fair value of $0.8 million. The estimated fair value is based on the cash flows expected to be received. (3) During the year ended December 31, 2022, the Company recorded a $12.7 million impairment on a land and development asset with an estimated fair value of $26.3 million. The estimated fair value is based on future cash flows expected to be received using a discount rate of 12.5% . The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s combined and consolidated balance sheets for the nine months ended September 30, 2023 ($ in thousands): Beginning balance $ — Purchases 4,220 Unrealized losses recorded in other comprehensive income (loss) (139) Ending balance $ 4,081 Fair values of financial instruments— As of September 30, 2023 As of December 31, 2022 Carrying Fair Carrying Fair Value Value Value Value Assets Loans receivable and other lending investments, net (1) $ 20 $ 17 $ 49 $ 46 Loans receivable held for sale (1) — — 38 38 Equity investment in Safe (2) 241 241 — — Cash and cash equivalents (3) 46 46 4 4 Restricted cash (3) 6 6 3 3 Liabilities Debt obligations, net (1) 213 213 — — (1) The fair value of the Company’s loans receivable and other lending investments, net, loans receivable held for sale and debt obligations are classified as Level 3 within the fair value hierarchy. (2) The fair value of the Company’s investment in approximately 13.5 million shares of Safe common stock is classified as Level 1 within the fair value hierarchy, and is included within “Other investments” on the Company’s balance sheet. (3) The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values. Restricted cash is recorded in “Deferred expenses and other assets, net” on the Company’s balance sheet. The fair value of the Company’s cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | Note 15—Subsequent Events On October 4, 2023, the Company entered into an amendment to its Safe Credit Facility with Safe. The amendment provides that: (i) the Company may access the existing $25.0 million incremental borrowing capacity provided under the agreement to replenish funds expended by the Company on or after October 4, 2023 to make voluntary prepayments under its Margin Loan Facility; and (ii) the Company will no longer have the right to pay interest in kind on the Safe Credit Facility. On October 6, 2023, STAR SPV entered into an amendment to the Margin Loan Facility (refer to Note 9) with Morgan Stanley Bank, N.A., as initial lender. The Margin Loan Facility is secured by all of the Safe Shares beneficially owned by the Company. The amendment: (i) reduces the floor price at which the market price of Safe common stock would trigger a mandatory prepayment of outstanding borrowings under the Margin Loan Facility from $14.00 to $10.00; and (ii) moderately lowers the loan-to-value ratios that would require STAR SPV to post additional collateral with the lender. Subsequent to September 30, 2023, the Company repaid $19.8 million principal amount of the Margin Loan Facility. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited combined and consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. These unaudited combined and consolidated financial statements and related notes should be read in conjunction with the combined and consolidated financial statements and related notes included in the Information Statement. The preparation of these combined and consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. In the opinion of management, the accompanying combined and consolidated financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year. The combined and consolidated financial statements of the Company prior to the Spin-off on March 31, 2023 represented a combination of entities under common control that have been “carved out” from iStar’s consolidated financial statements. Historically, financial statements of the Company have not been prepared as it was not operated separately from iStar. These combined and consolidated financial statements reflect the revenues and expenses of the Company and include certain assets and liabilities that were included in the Spin-Off, which have been reflected at iStar’s historical basis. All intercompany balances and transactions have been eliminated. The combined and consolidated financial statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had the Company operated as a standalone company during the periods presented. These combined and consolidated financial statements include an allocation of general and administrative expenses and interest expense to the Company from iStar through the date of the Spin-Off. General and administrative expenses include certain iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations. General and administrative expenses, including stock-based compensation, represent a pro rata allocation of costs from iStar’s real estate finance, operating properties, land and development and corporate business segments based on the Company’s average net assets for those segments as a percentage of iStar’s average net assets for those segments. Interest expense, net of amounts capitalized, was allocated to the Company by calculating the Company’s average net assets as a percentage of the average net assets in iStar’s segments and multiplying that percentage by the interest expense allocated to iStar’s segments. The Company believes the allocation methodology for general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense and interest expense allocations presented in our combined and consolidated statements of operations for historical periods does not necessarily reflect what our general and administrative expenses and interest expense will be as a standalone public company. For the three months ended September 30, 2022, the Company was allocated $7.0 million of general and administrative expense and $9.5 million of interest expense. For the three months ended September 30, 2022, the general and administrative expense allocation includes ($0.2) million of stock-based compensation (refer to Note 3). For the nine months ended September 30, 2023 and 2022, the Company was allocated $14.1 million and $5.9 million, respectively, of general and administrative expense and $8.0 million and $33.3 million, respectively, of interest expense. For the nine months ended September 30, 2023 and 2022, the general and administrative expense allocation includes $1.8 million and ($13.2) million, respectively, of stock-based compensation (refer to Note 3). Subsequent to the Spin-Off, the Company has its own general and administrative expense and interest expense as a stand-alone public company. Prior to the Spin-Off, certain of the entities included in the Company’s financial statements did not have bank accounts for the periods presented, and certain cash transactions for the Company were transacted through bank accounts owned by iStar. The combined and consolidated statements of cash flows for the periods presented were prepared as if operating, investing and financing transactions for the Company had been transacted through its own bank accounts. Other — In addition, the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to “opt out” of this extended transition period, and as a result, it will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. The Company’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. The Company will remain an “emerging growth company” until the earliest to occur of: (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion (subject to adjustment for inflation); (ii) the last day of the fiscal year following the fifth anniversary of the Company’s registration statement becoming effective; (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended. |
Principles of Combination and Consolidation | Principles of Combination and Consolidation The combined and consolidated financial statements include on a carve-out basis the historical balance sheets and statements of operations and cash flows of assets, liabilities and operations included in the Spin-Off. For periods prior to March 31, 2023, the Company was allocated a number of shares of Safe common stock based on estimates driven by the total value of stock that iStar expected to contribute to the Company and the price per share of Safe common stock (refer to Note 7). Information for the periods subsequent to March 31, 2023 reflect the actual number of Safe Shares contributed to the Company. |
Capitalization and depreciation | Capitalization and depreciation — Certain improvements and replacements are capitalized when they extend the useful life of the asset. For real estate projects, the Company begins to capitalize qualifying development and construction costs, including interest, real estate taxes, compensation and certain other carrying costs incurred which are specifically identifiable to a development project once activities necessary to get the asset ready for its intended use have commenced. If specific allocation of costs is not practicable, the Company will allocate costs based on relative fair value prior to construction or relative sales value, relative size or other methods as appropriate during construction. The Company’s policy for interest capitalization on qualifying real estate assets is to use the average amount of accumulated expenditures during the period the asset is being prepared for its intended use, which is typically when physical construction commences, and a capitalization rate which is derived from specific borrowings on the qualifying asset or the Company’s corporate borrowing rate in the absence of specific borrowings. The Company ceases capitalization on the portions substantially completed and ready for their intended use. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method of cost recovery over the estimated useful life, which is generally 40 years for facilities, five years for furniture and equipment, the shorter of the remaining lease term or expected life for tenant improvements and the remaining useful life of the facility for facility improvements. |
Purchase price allocation | Purchase price allocation — The Company’s acquisition of properties are generally accounted for as asset acquisitions. For asset acquisitions, the Company recognizes and measures identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree based on their relative fair values and acquisition-related costs are capitalized and recorded in “Real estate, net” on the Company’s combined and consolidated balance sheets. The Company accounts for its acquisition of properties by recording the purchase price of tangible and intangible assets and liabilities acquired based on their relative fair values. The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant. Intangible assets may include the value of above-market leases and in-place leases which are each recorded at their relative fair values and included in “Deferred expenses and other assets, net” on the Company’s combined and consolidated balance sheets. Intangible liabilities may include the value of below-market leases, which are recorded at their relative fair values and included in “Accounts payable, accrued expenses and other liabilities” on the Company’s combined and consolidated balance sheets. In-place leases are amortized over the remaining non-cancelable term and the amortization expense is included in “Depreciation and amortization” in the Company’s combined and consolidated statements of operations. Above-market (or below-market) lease value is amortized as a reduction of (or increase to) operating lease income over the remaining non-cancelable term of each lease plus any renewal periods with fixed rental terms that are considered to be below-market. The Company may also engage in sale/leaseback transactions and execute leases with the occupant simultaneously with the purchase of the asset. These transactions are accounted for as asset acquisitions. |
Impairments | Impairments — The Company reviews real estate assets to be held for use and land and development assets, for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The value of a long-lived asset held for use and land and development assets are impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate assets and land and development assets, when applicable, are recorded in “Impairment of assets” in the Company’s combined and consolidated statements of operations. |
Dispositions | Dispositions — Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with Accounting Standards Codification (“ASC”) 610-20 , Gains and Losses from the Derecognition of Nonfinancial Assets. The Company primarily uses specific identification and the relative sales value method to allocate costs. Gains on sales of real estate are included in “Income from sales of real estate” in the Company’s combined and consolidated statements of operations. |
Loans receivable and other lending investments, net | Loans receivable and other lending investments, net — Loans receivable and other lending investments, net includes both senior mortgages and subordinate mortgages. Management considers nearly all of its loans to be held-for-investment, although certain investments may be classified as held-for-sale or available-for-sale. Loans receivable classified as held-for-investment are reported at their outstanding unpaid principal balance net of any unamortized acquisition premiums or discounts and unamortized deferred loan costs or fees. These loans could also include accrued and paid-in-kind interest and accrued exit fees that the Company determines are probable of being collected. Debt securities classified as available-for-sale are reported at fair value with unrealized gains and losses recorded in “Accumulated other comprehensive income (loss)” on the Company’s combined and consolidated balance sheets. Realized gains on the sale of available-for-sale securities are recorded in “Other income” in the Company’s combined and consolidated statements of operations. Loans receivable and other lending investments designated for sale are classified as held-for-sale and are carried at lower of amortized cost or estimated fair value. The amount by which carrying value exceeds fair value is recorded as a valuation allowance. Subsequent changes in the valuation allowance are included in the determination of net income (loss) in the period in which the change occurs. Based on the Company’s strategic plan to realize the maximum value from the collateral received, property is classified as “Land and development, net,” “Real estate, net” or “Real estate available and held for sale,” when the appropriate held for sale criteria are met, at its estimated fair value when title to the property is obtained. Any excess of the carrying value of the loan over the estimated fair value of the property (less costs to sell for assets held for sale) is charged-off against the allowance for loan losses as of the date of foreclosure. |
Equity investments | Equity investments — Equity interests are accounted for pursuant to the equity method of accounting if the Company can significantly influence the operating and financial policies of an investee. The Company’s periodic share of earnings and losses in equity method investees is included in “Earnings from equity method investments” in the combined and consolidated statements of operations. Equity method investments are included in “Other investments” on the Company’s combined and consolidated balance sheets. The Company also has equity interests that are not accounted for pursuant to the equity method of accounting. These equity interests are carried at cost, plus or minus any changes in value identified through observable comparable price changes in transactions in identical or similar investments of the same entity. These investments are included in “Other investments” on the Company’s combined and consolidated balance sheets and the changes in fair value for these investments are included in “Unrealized loss on equity investment” in the combined and consolidated statements of operations. The Company periodically reviews equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges are recorded in “Earnings from equity method investments” in the Company’s combined and consolidated statements of operations. |
Cash and cash equivalents | Cash and cash equivalents — Cash and cash equivalents include cash held in bank accounts. Prior to the Spin-Off, certain of the entities included in the Company’s combined and consolidated financial statements did not have bank accounts for the periods presented, and certain cash transactions for the Company were transacted through bank accounts owned by iStar. Cash and cash equivalents presented on the Company’s combined and consolidated balance sheets represents cash held in bank accounts directly attributable to the Company. |
Restricted cash | Restricted cash — Restricted cash represents amounts required to be maintained for certain of the Company’s loans, real estate and land and development properties. Restricted cash is included in “Deferred expenses and other assets, net” on the Company’s combined and consolidated balance sheets. |
Variable interest entities | Variable interest entities — The Company evaluates its investments and other contractual arrangements to determine if they constitute variable interests in a VIE. A VIE is an entity where a controlling financial interest is achieved through means other than voting rights. A VIE is consolidated by the primary beneficiary, which is the party that has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This overall consolidation assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision-making powers, their impact on the VIE’s economic performance, and related party relationships. Where qualitative assessment is not conclusive, the Company performs a quantitative analysis. The Company reassesses its evaluation of the primary beneficiary of a VIE on an ongoing basis and assesses its evaluation of an entity as a VIE upon certain reconsideration events. |
Deferred expenses and other assets and accounts payable, accrued expenses and other liabilities | Deferred expenses and other assets / Accounts payable, accrued expenses and other liabilities — Deferred expenses and other assets include right-of-use operating lease assets, prepaid expenses, certain non-tenant receivables and leasing costs. Leasing costs that include brokerage, legal and other costs are amortized over the life of the respective leases and presented as an operating activity in the Company’s combined and consolidated statements of cash flows. Accounts payable, accrued expenses and other liabilities primarily includes unearned revenue, accrued expenses and operating lease liabilities. The Company, as lessee, records right-of-use operating lease assets in “Deferred expenses and other assets” and operating lease liabilities in “Accounts payable, accrued expenses and other liabilities,” both initially measured at the present value of the fixed and determinable lease payments. Some of the Company’s lease agreements include extension options, which are not included in the lease payments unless the extensions are reasonably certain to be exercised. For operating leases, the Company recognizes a single lease cost for ground leases in “Real estate expense” in the combined and consolidated statements of operations, calculated so that the cost of the lease is allocated generally on a straight-line basis over the term of the lease, and classifies all cash payments within operating activities in the combined and consolidated statements of cash flows. |
Identified intangible assets and liabilities | Identified intangible assets and liabilities — Upon the acquisition of a business or an asset, the Company records intangible assets or liabilities acquired at their relative fair values and determines whether such intangible assets or liabilities have finite or indefinite lives. As of September 30, 2023, all such intangible assets and liabilities acquired by the Company have finite lives. Intangible assets are included in “Deferred expenses and other assets, net” and intangible liabilities are included in “Accounts payable, accrued expenses and other liabilities” on the Company’s combined and consolidated balance sheets. The Company amortizes finite lived intangible assets and liabilities based on the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the business acquired. The Company reviews finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the Company determines the carrying value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets, when applicable, are recorded in “Impairment of assets” in the Company’s combined and consolidated statements of operations. |
Revenue recognition | Revenue recognition — The Company’s revenue recognition policies are as follows: Operating lease income: For the Company’s leases classified as operating leases, operating lease income is recognized on the straight-line method of accounting generally from the later of the date the lessee takes possession of the space or the space is ready for its intended use. If the Company acquires a facility subject to an existing operating lease, the Company will recognize operating lease income on the straight-line method beginning on the date of acquisition. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease revenue recognized under this method and contractual lease payment terms is recorded as “Deferred operating lease income receivable, net” on the Company’s combined and consolidated balance sheets. The Company also recognizes revenue from certain tenant leases for reimbursements of all or a portion of operating expenses, including common area costs, insurance, utilities and real estate taxes of the respective property. This revenue is accrued in the same periods as the expense is incurred and is recorded as “Operating lease income” in the Company’s combined and consolidated statements of operations. Revenue is also recorded from certain tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the defined threshold has been met for the period. The Company moves to cash basis operating lease income recognition in the period in which collectability of all lease payments is no longer considered probable. At such time, any operating lease receivable or deferred operating lease income receivable balance will be written off. If and when lease payments that were previously not considered probable of collection become probable, the Company will move back to the straight-line method of income recognition and record an adjustment to operating lease income in that period as if the lease was always on the straight-line method of income recognition. Interest Income: Interest income on loans receivable is recognized on an accrual basis using the interest method. On occasion, the Company may acquire loans at premiums or discounts. These discounts and premiums in addition to any deferred costs or fees, are typically amortized over the contractual term of the loan using the interest method. Exit fees are also recognized over the lives of the related loans as a yield adjustment, if management believes it is probable that such amounts will be received. If loans with premiums, discounts, loan origination or exit fees are prepaid by borrowers, the Company immediately recognizes the unamortized portion, which is included in “Other income” or “Other expense” in the Company’s combined and consolidated statements of operations. The Company considers a loan to be non-performing and places it on non-accrual status at such time as: (1) interest payments become 90 days delinquent; (2) it has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. While on non-accrual status, based on the Company’s judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash, or on a cost-recovery basis, where all cash receipts reduce a loan’s carrying value. Non-accrual loans are returned to accrual status when a loan has become contractually current and management believes all amounts contractually owed will be received. Certain of the Company’s loans contractually provide for accrual of interest at specified rates that differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management’s determination that accrued interest and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the borrower. Certain of the Company’s loan investments provide for additional interest based on the borrower’s operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon receipt of cash. Other income: Other income includes dividend income from our investment in Safe (refer to Note 7), ancillary income from our operating properties, land and development projects and loan portfolio, revenues from golf course operations and hotel operations, which are recognized when rooms are occupied, and the related services are provided. Hotel revenues include room sales, food and beverage sales, parking, telephone, spa services and gift shop sales. Other ancillary income could include gains from sales of loans, loan prepayment fees, yield maintenance payments, lease termination fees and other ancillary income. Land development revenue and cost of sales: Land development revenue includes lot, unit and parcel sales from wholly-owned or majority-owned properties and is recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs. |
Allowance for loan losses | Allowance for loan losses — The Company performs quarterly a comprehensive analysis of its loan portfolio and assigns risk ratings that incorporate management’s current judgments about credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower or tenant financial resources and investment collateral, collateral type, project economics and geographical location as well as national and regional economic factors. This methodology results in loans being risk rated, with ratings ranging from “1” to “5” with “1” representing the lowest risk of loss and “5” representing the highest risk of loss. Upon adoption of ASU 2016-13 on January 1, 2020, the Company implemented procedures to estimate its expected loss (“Expected Loss”) on its loans (including unfunded loan commitments) and held-to-maturity debt securities based on relevant information including historical realized loss rates, current market conditions and reasonable and supportable forecasts that affect the collectability of its investments. The estimate of the Company’s Expected Loss requires significant judgment and the Company analyzes its loan portfolio based upon its different categories of financial assets, which includes: (i) loans and held-to-maturity debt securities; and (ii) construction loans. For the Company’s loans, held-to-maturity debt securities and construction loans, the Company analyzed its historical realized loss experience to estimate its Expected Loss. The Company adjusts its Expected Loss through the use of third-party market data that provided current and future economic conditions that may impact the performance of the commercial real estate assets securing its investments. The Company considers a loan to be non-performing and places it on non-accrual status at such time as: (1) interest payments become 90 days delinquent; (2) it has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. Non-accrual loans are returned to accrual status when they have become contractually current and management believes all amounts contractually owed will be received. The Company will record a specific allowance on a non-performing loan if the Company determines that the collateral fair value less costs to sell is less than the carrying value of the collateral-dependent asset. The specific allowance is increased (decreased) through “Provision for (recovery of) loan losses” in the Company’s combined and consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower or tenant as the Company works toward a settlement or other alternative resolution, which can impact the potential for repayment or receipt of collateral. The Company’s policy is to charge off a loan when it determines, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when the Company receives cash or other assets in a pre-foreclosure sale or takes control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when the Company has otherwise ceased significant collection efforts. The Company considers circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related allowance will be charged off. The Company made the accounting policy election to record accrued interest on its loan portfolio separate from its loans receivable and other lending investments and to exclude accrued interest from its amortized cost basis disclosures (refer to Note 6). As of September 30, 2023 and December 31, 2022, accrued interest was $0.1 million and $0.1 million, respectively, and is recorded in “Accrued interest and operating lease income receivable, net” on the Company’s combined and consolidated balance sheets. The Company places loans on non-accrual status once interest on the loan becomes 90 days delinquent and reverses any accrued interest as a reduction to interest income or recognizes a credit loss expense at such time. As such, the Company elected the practical expedient to not record an allowance against accrued interest receivable. During the three and nine months ended September 30, 2023 and 2022, the Company did not reverse any accrued interest on its loan portfolio. As of September 30, 2023, the Company did not have any non-performing loans. Loans receivable held for sale are carried at the lower of amortized cost or estimated fair value. The Company generally uses the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In some cases, the Company obtains external “as is” appraisals for loan collateral, generally when third party participations exist. Valuations are performed or obtained at the time a loan is determined to be impaired or designated non- performing, and they are updated if circumstances indicate that a significant change in value has occurred. In limited cases, appraised values may be discounted when real estate markets rapidly deteriorate. Management evaluates available-for-sale debt securities held in “Loans receivable and other lending investments, net” for impairment if the security’s fair value is less than its amortized cost. If the Company has an impaired security, it will then determine if: (1) the Company has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery; or (3) it does not expect to recover the entire amortized cost basis of the security. If the Company does not intend to sell the security, it is more likely than not that the entity will not be required to sell the security or it does not expect to recover its amortized cost, the Company will record an allowance for credit losses. The credit loss component of the allowance will be recorded (or reversed, if necessary), when applicable, as a “Provision for loan losses” in the Company’s combined and consolidated statements of operations, and the remainder of the allowance will be recorded in “Accumulated other comprehensive income (loss)” on the Company’s combined and consolidated balance sheets. The Company also adopted ASU 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) on January 1, 2023. ASU 2022-02 eliminated troubled debt restructuring recognition and measurement guidance and requires disclosure of gross write-offs by vintage for public business entities. The adoption of ASU 2022-02 did not have a material impact on the Company’s combined and consolidated financial statements. |
Stock-based compensation | Stock-based compensation — The Company does not have any stock-based compensation plans; however, prior to the Spin-Off, the Company has been allocated stock-based compensation expense from iStar, related to awards made to employees of iStar under its 2009 Long-Term Incentive Plan, for the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 (refer to Note 2). iStar’s compensation cost for stock-based awards was measured on the grant date and adjusted over the period of the employees’ services to reflect: (i) actual forfeitures; and (ii) the outcome of awards with performance or service conditions through the requisite service period. iStar’s compensation cost for market-based awards was determined using a Monte Carlo model to simulate a range of possible future stock prices for iStar’s common stock, which is reflected in the grant date fair value. All compensation cost for market-based awards in which the service conditions are met is recognized regardless of whether the market-condition is satisfied. Compensation costs are recognized ratably over the applicable vesting/service period. |
Income taxes | Income taxes — The Company is subject to U.S. federal and state income taxation at corporate rates on its net taxable income. The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the carrying amounts in accordance with GAAP and the tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. Deferred income taxes could also reflect the impact of net operating loss and tax credit carryforwards. The Company evaluates whether its deferred tax assets are realizable and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating whether its deferred tax assets are realizable, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This analysis is inherently subjective, and requires the Company to forecast its business and general economic environment in future periods. Changes in estimates of our valuation allowance, if any, are included in “Income tax (expense) benefit” in the combined and consolidated statements of operations. The Company recognizes interest expense and penalties related to uncertain tax positions, if any, as “Income tax (expense) benefit” in the Company’s combined and consolidated statements of operations. For the nine months ended September 30, 2023, the Company recorded a deferred income tax benefit in the amount of $16.6 million related primarily to unrealized losses on the Company’s equity investments and impairments. For the nine months ended September 30, 2023, the Company also recorded an offsetting income tax expense of $16.6 million to increase the valuation allowance and reduce the Company's deferred tax assets to their more likely than not net realizable value, which is zero as of September 30, 2023. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business and Organization | |
Schedule of assets and liabilities of consolidated VIEs | As of September 30, 2023 December 31, 2022 ASSETS Real estate Real estate, at cost $ 94,624 $ 94,159 Less: accumulated depreciation (20,505) (18,033) Real estate, net 74,119 76,126 Land and development, net 112,662 128,717 Cash and cash equivalents 18,610 3,754 Accrued interest and operating lease income receivable, net 23 — Deferred operating lease income receivable, net 7 6 Deferred expenses and other assets, net 7,331 6,921 Total assets $ 212,752 $ 215,524 LIABILITIES Accounts payable, accrued expenses and other liabilities $ 26,198 $ 24,406 Total liabilities 26,198 24,406 |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of real estate assets | The Company’s real estate assets were comprised of the following ($ in thousands): As of September 30, 2023 December 31, 2022 Land, at cost $ 5,570 $ 5,570 Buildings and improvements, at cost 91,830 89,023 Less: accumulated depreciation (21,080) (18,096) Real estate, net $ 76,320 $ 76,497 |
Schedule of future minimum lease payments to be collected under non-cancelable operating leases | Future Minimum Operating Lease Payments Year Amount 2023 (remaining three months) $ 1,080 2024 4,243 2025 4,224 2026 4,203 2027 1,570 Thereafter 1,117 |
Land and Development (Tables)
Land and Development (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Land And Development [Abstract] | |
Schedule of land and development assets | The Company’s land and development assets were comprised of the following ($ in thousands): As of September 30, December 31, 2023 2022 Land and land development, at cost $ 210,266 $ 243,727 Less: accumulated depreciation (11,977) (11,713) Total land and development, net $ 198,289 $ 232,014 |
Loans Receivable and Other Le_2
Loans Receivable and Other Lending Investments, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of the company's loans and other lending investments by class | The following is a summary of the Company’s loans receivable and other lending investments by class ($ in thousands): As of September 30, 2023 December 31, 2022 Construction loans Senior mortgages $ — $ 36,249 Subtotal - gross carrying value of construction loans — 36,249 Loans Senior mortgages 2,550 — Subordinate mortgages 14,026 13,331 Subtotal - gross carrying value of loans 16,576 13,331 Other lending investments Available-for-sale debt securities 4,081 — Subtotal - other lending investments 4,081 — Total gross carrying value of loans receivable and other lending investments 20,657 49,580 Allowance for loan losses (484) (925) Total loans receivable and other lending investments, net $ 20,173 $ 48,655 |
Schedule of changes in the company's allowance for loan losses | Allowance for Loan Losses General Allowance Held to Construction Maturity Debt Specific Three Months Ended September 30, 2023 Loans Loans Securities Allowance Total Allowance for loan losses at beginning of period $ — $ 389 $ — $ — $ 389 Provision for loan losses (1) — 95 — — 95 Allowance for loan losses at end of period $ — $ 484 $ — $ — $ 484 Three Months Ended September 30, 2022 Allowance for loan losses at beginning of period $ 861 $ 450 $ 1,014 $ 708 $ 3,033 Provision for (recovery of) loan losses (1) (13) (72) (67) 9 (143) Allowance for loan losses at end of period $ 848 $ 378 $ 947 $ 717 $ 2,890 (1) During the three months ended September 30, 2023 and 2022, the Company recorded a provision for (recovery of) loan losses of $0.1 million and ($0.2) million, respectively, in its combined and consolidated statements of operations. The provision in 2023 was due primarily to the origination of a new loan during the three months ended September 30, 2023. The recovery in 2022 was due primarily to the repayment of loans during the three months ended September 30, 2022. Changes in the Company’s allowance for loan losses were as follows for the nine months ended September 30, 2023 and 2022 ($ in thousands): General Allowance Held to Construction Maturity Debt Specific Nine Months Ended September 30, 2023 Loans Loans Securities Allowance Total Allowance for loan losses at beginning of period $ 92 $ 437 $ — $ 396 $ 925 (Recovery of) provision for loan losses (1) (92) 47 — (396) (441) Allowance for loan losses at end of period $ — $ 484 $ — $ — $ 484 Nine Months Ended September 30, 2022 Allowance for loan losses at beginning of period $ 1,213 $ 676 $ 2,304 $ 576 $ 4,769 Provision for (recovery of) loan losses (1) (365) (298) 23,643 141 23,121 Charge-offs (1) — — (25,000) — (25,000) Allowance for loan losses at end of period $ 848 $ 378 $ 947 $ 717 $ 2,890 (1) During the nine months ended September 30, 2023 and 2022, the Company recorded a provision for loan losses of $1.7 million and $22.6 million, respectively, in its combined and consolidated statements of operations. The provision in 2023 was due primarily to a $2.2 million provision on the sale of a loan held for sale, which was partially offset by a recovery of loan losses due to the repayment of loans during the nine months ended September 30, 2023. The provision in 2022 was due primarily to a $25.0 million charge-off on the Company’s held-to-maturity debt security, which was recorded at the repayment proceeds received in 2022. |
Schedule of recorded investment in loans and associated allowance for loan losses | The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows as of September 30, 2023 and December 31, 2022 ($ in thousands): Individually Collectively Evaluated for Evaluated for Impairment (1) Impairment Total As of September 30, 2023 Loans $ — $ 16,576 $ 16,576 Available-for-sale debt securities (2) — 4,081 4,081 Less: Allowance for loan losses — (484) (484) Total $ — $ 20,173 $ 20,173 As of December 31, 2022 Construction loans $ 29,493 $ 6,756 $ 36,249 Loans — 13,331 13,331 Less: Allowance for loan losses (396) (529) (925) Total $ 29,097 $ 19,558 $ 48,655 (1) The carrying value of this loan includes amortized fees of $0.1 million as of December 31, 2022. The Company’s loans individually evaluated for impairment represent loans on non-accrual status and the unamortized amounts associated with these loans are not currently being amortized into income. (2) Available-for-sale debt securities were evaluated for impairment under ASC 326-30 — Financial Instruments-Credit Losses. |
Schedule of investment in performing loans, presented by class and by credit quality, as indicated by risk rating | The Company’s amortized cost basis in performing senior mortgage and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of September 30, 2023 were as follows ($ in thousands): Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Total Senior mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 2,550 — — — — — 2,550 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ 2,550 $ — $ — $ — $ — $ — $ 2,550 Subordinate mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — 14,026 14,026 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ — $ 14,026 $ 14,026 Total $ 2,550 $ — $ — $ — $ — $ 14,026 $ 16,576 The Company’s amortized cost basis in performing senior mortgages and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of December 31, 2022 were as follows ($ in thousands): Year of Origination 2022 2021 2020 2019 2018 Prior to 2018 Total Senior mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — — — 3.5 — — — — 6,756 — 6,756 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ 6,756 $ — $ 6,756 Subordinate mortgages Risk rating 1.0 $ — $ — $ — $ — $ — $ — $ — 1.5 — — — — — — — 2.0 — — — — — — — 2.5 — — — — — — — 3.0 — — — — — 13,331 13,331 3.5 — — — — — — — 4.0 — — — — — — — 4.5 — — — — — — — 5.0 — — — — — — — Subtotal $ — $ — $ — $ — $ — $ 13,331 $ 13,331 Total $ — $ — $ — $ — $ 6,756 $ 13,331 $ 20,087 |
Schedule of recorded investment in loans, aged by payment status and presented by class | The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands): Less Than Greater or Equal Than Total Current to 90 Days 90 Days Past Due Total As of September 30, 2023 Senior mortgages $ 2,550 $ — $ — $ — $ 2,550 Subordinate mortgages 14,026 — — — 14,026 Total $ 16,576 $ — $ — $ — $ 16,576 As of December 31, 2022 Senior mortgages $ 6,756 $ 29,493 $ — $ 29,493 $ 36,249 Subordinate mortgages 13,331 — — — 13,331 Total $ 20,087 $ 29,493 $ — $ 29,493 $ 49,580 |
Schedule of recorded investment in impaired loans | As of September 30, 2023 As of December 31, 2022 Unpaid Unpaid Amortized Principal Related Amortized Principal Related Cost Balance Allowance Cost Balance Allowance With an allowance recorded: Senior mortgages (1) $ — $ — $ — $ 29,493 $ 29,358 $ (396) Total $ — $ — $ — $ 29,493 $ 29,358 $ (396) (1) The Company had one non-accrual loan as of December 31, 2022 that was considered impaired and included in the table above. The Company did no t record any interest income on impaired loans for the three and nine months ended September 30, 2023 and 2022. |
Schedule of other lending investments - securities | Other lending investments— Other lending investments includes the following securities ($ in thousands): Net Net Amortized Unrealized Estimated Carrying Face Value Cost Basis Gain (Loss) Fair Value Value As of September 30, 2023 Available-for-sale securities Municipal debt securities (1) $ 4,220 $ 4,220 $ (139) $ 4,081 $ 4,081 Total $ 4,220 $ 4,220 $ (139) $ 4,081 $ 4,081 (1) In September 2023, the Company acquired two securities for $4.2 million. The securities both accrue interest at 7.0% and mature in July 2053. |
Other Investments (Tables)
Other Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
Schedule of other investments and proportionate share of earnings from equity method investments | The Company’s other investments and its proportionate share of earnings from equity investments were as follows ($ in thousands): Earnings from Earnings from Carrying Value Equity Method Investments Equity Method Investments as of For the Three Months Ended For the Nine Months Ended September 30, December 31, September 30, September 30, 2023 2022 2023 2022 2023 2022 Safehold Inc. ("Safe") (1) $ 240,703 $ 554,733 $ — $ 16,052 $ 1,089 $ 27,956 Other real estate and strategic equity investments (2) 283 32,405 217 12,941 29,344 22,546 Total $ 240,986 $ 587,138 $ 217 $ 28,993 $ 30,433 $ 50,502 (1) As of September 30, 2023, the Company owned 13.5 million shares of Safe common stock which, based on the closing price of $17.80 on September 29, 2023, had a market value of $240.7 million. The Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321 – Investments – Equity Securities (“ASC 321”), which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. As such, the Company recognized an “Unrealized loss on equity investment” of $80.2 million and $247.1 million, respectively, in its combined and consolidated statements of operations for the three and nine months ended September 30, 2023. Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 – Investments – Equity Method and Joint Ventures (“ASC 323”) due to its ability to exercise significant influence. Pursuant to ASC 323-10-40-1, an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment. Any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. For the nine months ended September 30, 2022, equity in earnings includes $0.3 million of dilution gains resulting from Safe equity offerings. As of December 31, 2022, the Company was allocated ownership of approximately 15.2 million shares of Safe common stock from iStar. The allocation was adjusted based upon the final terms of the Spin-Off on March 31, 2023, and the Company’s investment basis was reduced by approximately 1.8 million shares with a carrying value of approximately $65.6 million, which was adjusted against additional paid-in capital within equity. (2) For the nine months ended September 30, 2023, the Company recorded $29.3 million in earnings from equity method investments primarily from the sale of properties within its equity method investments. For the nine months ended September 30, 2022, the Company recognized earnings from equity method investments of $11.5 million primarily from the sale of a multifamily property at one of our ventures and $5.0 million primarily from the settlement of our interest in a venture. |
Schedule of summarized financial information | Summarized investee financial information Revenues Expenses Net Income Attributable to Safe (1) For the Three Months Ended March 31, 2023 (2) Safe $ 78,329 $ 75,875 $ 4,682 For the Nine Months Ended September 30, 2022 Safe $ 196,943 $ 136,517 $ 113,628 (1) Net Income Attributable to Safe also includes gain on sale of net investment in leases and earnings from equity method investments. (2) Prior to the Spin-Off, iStar accounted for its investment in Safe as an equity method investment under ASC 323 due to its ability to exercise significant influence. Subsequent to the Spin-Off, the Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321, which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. |
Other Assets and Other Liabil_2
Other Assets and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Assets and Other Liabilities [Abstract] | |
Schedule of deferred expenses and other assets, net | Deferred expenses and other assets, net, consist of the following items ($ in thousands): (1) As of September 30, 2023 December 31, 2022 Other assets (1) $ 11,001 $ 9,471 Operating lease right-of-use assets (2) 1,492 1,860 Restricted cash 5,653 3,247 Other receivables 2,516 1,895 Leasing costs, net (3) 109 129 Intangible assets, net (4) 273 319 Deferred expenses and other assets, net $ 21,044 $ 16,921 (1) As of September 30, 2023 and December 31, 2022, other assets primarily includes prepaid expenses and deposits for certain real estate assets. (2) Right-of use lease assets initially equal the lease liability. For operating leases, rent expense is recognized on a straight-line basis over the term of the lease and is recorded in “Real estate expense” in the Company’s combined and consolidated statements of operations. During the three months ended September 30, 2023 and 2022, the Company recognized $0.1 million and $0.1 million, respectively, in “Real estate expense” in its combined and consolidated statements of operations relating to operating leases. During the nine months ended September 30, 2023 and 2022, the Company recognized $0.4 million and $0.5 million, respectively, in “Real estate expense” in its combined and consolidated statements of operations relating to operating leases. (3) Accumulated amortization of leasing costs was $0.1 million and $0.1 million as of September 30, 2023 and December 31, 2022, respectively. (4) Intangible assets, net includes above market and in-place lease assets related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was $0.1 million and $0.1 million as of September 30, 2023 and December 31, 2022, respectively. The amortization of above market leases decreased operating lease income in the Company’s combined and consolidated statements of operations by $8 thousand and $0.1 million, respectively, for the three and nine months ended September 30, 2022. These intangible lease assets are amortized over the remaining term of the lease. As of September 30, 2023, the weighted average remaining amortization period for the Company’s intangible assets was approximately 5.1 years. |
Schedule of accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands): As of September 30, 2023 December 31, 2022 Other liabilities (1) $ 36,304 $ 26,235 Accrued expenses 4,716 4,861 Operating lease liabilities (see table above) 1,648 2,006 Accounts payable, accrued expenses and other liabilities $ 42,668 $ 33,102 (1) As of September 30, 2023, “Other liabilities” includes $20.1 million of deferred income, $7.2 million of management fees due Safe and $6.2 million of other payables related to real estate properties. As of December 31, 2022, “Other liabilities” includes $21.2 million of deferred income and $2.5 million of other payables related to real estate properties. |
Debt Obligations, net (Tables)
Debt Obligations, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt obligations | The Company’s debt obligations were as follows ($ in thousands): Carrying Value as of Stated Scheduled September 30, 2023 December 31, 2022 Interest Rates Maturity Date Debt obligations: Safe Credit Facility $ 115,000 $ — 8.00 % March 2027 Margin Loan Facility 100,000 — SOFR plus 3.00 % March 2026 Total debt obligations 215,000 — Debt discounts and deferred financing costs, net (2,181) — Total debt obligations, net (1) $ 212,819 $ — (1) During the three and nine months ended September 30, 2023, the Company capitalized interest expense on qualifying real estate assets of $0.6 million and $1.6 million, respectively. |
Schedule of future scheduled maturities of outstanding debt obligations | Future Scheduled Maturities 2023 $ — 2024 — 2025 — 2026 100,000 2027 115,000 Thereafter — Total principal maturities 215,000 Unamortized discounts and deferred financing costs, net (2,181) Total debt obligations, net $ 212,819 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease obligations operating leases | Commitments Future minimum lease obligations under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands): (1) 2023 (remaining three months) $ 121 2024 486 2025 486 2026 486 2027 162 Thereafter — Total undiscounted cash flows 1,741 Present value discount (1) (93) Lease liabilities $ 1,648 (1) The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at inception at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 3.0% and the weighted average remaining lease term is 3.6 years. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of income (loss) from continuing operations used in the basic and diluted EPS calculations | The following table presents a reconciliation of income from operations used in the basic and diluted earnings per share (“EPS”) calculations ($ in thousands, except for per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) $ (81,758) $ 17,568 $ (262,432) $ (3,853) Net (income) loss from operations attributable to noncontrolling interests (56) (57) (58) (46) Net income (loss) allocable to common shareholders $ (81,814) $ 17,511 $ (262,490) $ (3,899) |
Schedule of earnings per share allocable to common shares | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Earnings allocable to common shares: Numerator for basic and diluted earnings per share: Net income (loss) allocable to common shareholders $ (81,814) $ 17,511 $ (262,490) $ (3,899) Denominator for basic and diluted earnings per share: (1) Weighted average common shares outstanding for basic and diluted earnings per common share 13,320 13,320 13,320 13,320 Basic and diluted earnings per common share: Net income (loss) allocable to common shareholders $ (6.14) $ 1.31 $ (19.71) $ (0.29) (1) For all periods presented prior to the Spin-Off, the weighted average shares outstanding for the EPS calculation assumes the pro rata distribution of 0.153 common shares of the Company’s common stock for each outstanding share of iStar Common Stock on the record date of the distribution were issued and outstanding. |
Fair Values (Tables)
Fair Values (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities recorded at fair value on a recurring and non-recurring basis | The following fair value hierarchy table summarizes the Company’s assets recorded at fair value on a recurring or non-recurring basis by the above categories as of September 30, 2023 and December 31, 2022 ($ in thousands): Fair Value Using Quoted market Significant prices in other Significant active observable unobservable markets inputs inputs Total (Level 1) (Level 2) (Level 3) As of September 30, 2023 Recurring basis: Available-for-sale debt securities (1) $ 4,081 $ — $ — $ 4,081 Other investments (refer to Note 7) 240,703 240,703 — — As of December 31, 2022 Non-recurring basis: Real estate, net (2) $ 811 $ — $ — $ 811 Impaired land and development (3) 26,300 — — 26,300 Loans receivable held for sale (refer to Note 6) 37,650 — — 37,650 (1) The fair value of the Company’s available-for-sale debt securities are based upon unadjusted third-party broker quotes and are classified as Level 3. (2) During the year ended December 31, 2022, the Company recorded a $1.8 million impairment on an operating property with an estimated fair value of $0.8 million. The estimated fair value is based on the cash flows expected to be received. (3) During the year ended December 31, 2022, the Company recorded a $12.7 million impairment on a land and development asset with an estimated fair value of $26.3 million. The estimated fair value is based on future cash flows expected to be received using a discount rate of 12.5% . |
Schedule of carrying value and fair value of financial instruments | The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s combined and consolidated balance sheets for the nine months ended September 30, 2023 ($ in thousands): Beginning balance $ — Purchases 4,220 Unrealized losses recorded in other comprehensive income (loss) (139) Ending balance $ 4,081 Fair values of financial instruments— As of September 30, 2023 As of December 31, 2022 Carrying Fair Carrying Fair Value Value Value Value Assets Loans receivable and other lending investments, net (1) $ 20 $ 17 $ 49 $ 46 Loans receivable held for sale (1) — — 38 38 Equity investment in Safe (2) 241 241 — — Cash and cash equivalents (3) 46 46 4 4 Restricted cash (3) 6 6 3 3 Liabilities Debt obligations, net (1) 213 213 — — (1) The fair value of the Company’s loans receivable and other lending investments, net, loans receivable held for sale and debt obligations are classified as Level 3 within the fair value hierarchy. (2) The fair value of the Company’s investment in approximately 13.5 million shares of Safe common stock is classified as Level 1 within the fair value hierarchy, and is included within “Other investments” on the Company’s balance sheet. (3) The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values. Restricted cash is recorded in “Deferred expenses and other assets, net” on the Company’s balance sheet. The fair value of the Company’s cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy. |
Business and Organization (Deta
Business and Organization (Details) | 9 Months Ended | ||
Sep. 30, 2023 segment shares | Mar. 31, 2023 shares | Sep. 30, 2022 shares | |
Business and Organization | |||
Number of shares of common stock in Safehold, Inc. received in Spin-off | 13,522,651 | ||
Percentage of common shares of beneficial interest distributed at Spin-off | 100% | ||
Pro rata distribution of common shares issued for each outstanding share of iStar common share at Spin-off. | 0.153 | 0.153 | 0.153 |
Number of operating segments | segment | 1 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation (Basis of Presentation) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
General and administrative expenses allocated from iStar | $ 7 | $ 14.1 | $ 5.9 |
Interest expense allocated from iStar | 9.5 | 8 | 33.3 |
General and Administrative | |||
Stock-based compensation expense allocated from iStar | $ (0.2) | $ 1.8 | $ (13.2) |
Basis of Presentation and Pri_4
Basis of Presentation and Principles of Consolidation - (Consolidation) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |||
Real estate | ||||||
Real estate, at cost | [1] | $ 97,400 | $ 94,593 | |||
Less: accumulated depreciation | [1] | (21,080) | (18,096) | |||
Real estate, net | [1] | 76,320 | 76,497 | |||
Land and development, net | [1] | 198,289 | 232,014 | |||
Cash and cash equivalents | 45,563 | [1] | 4,227 | [1] | $ 29,744 | |
Accrued interest and operating lease income receivable, net | [1] | 851 | 1,132 | |||
Deferred operating lease income receivable, net | [1] | 1,042 | 1,137 | |||
Deferred expenses and other assets, net | [1] | 21,044 | 16,921 | |||
Total assets | [1] | 604,268 | 1,005,371 | |||
LIABILITIES | ||||||
Accounts payable, accrued expenses and other liabilities | [1],[2] | 42,668 | 33,102 | |||
Debt obligations, net | [1] | 212,819 | ||||
Total liabilities | [1] | 255,487 | 33,102 | |||
Carrying value of investment | [1] | 240,986 | 587,138 | |||
Consolidated VIEs | ||||||
Real estate | ||||||
Real estate, at cost | 94,624 | 94,159 | ||||
Less: accumulated depreciation | (20,505) | (18,033) | ||||
Real estate, net | 74,119 | 76,126 | ||||
Land and development, net | 112,662 | 128,717 | ||||
Cash and cash equivalents | 18,610 | 3,754 | ||||
Accrued interest and operating lease income receivable, net | 23 | |||||
Deferred operating lease income receivable, net | 7 | 6 | ||||
Deferred expenses and other assets, net | 7,331 | 6,921 | ||||
Total assets | 212,752 | 215,524 | ||||
LIABILITIES | ||||||
Accounts payable, accrued expenses and other liabilities | 26,198 | 24,406 | ||||
Total liabilities | $ 26,198 | 24,406 | ||||
Unconsolidated VIEs | ||||||
LIABILITIES | ||||||
Carrying value of investment | $ 32,100 | |||||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). As of September 30, 2023, includes $7.2 million of management fees due to Safe (refer to Note 1). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment | |||
Impairment of assets | $ 1,750 | ||
Interest receivable | |||
Election to exclude accrued interest from loans receivable | true | ||
Income taxes | |||
Deferred income tax benefit | $ 16,600 | ||
Income tax expense | 16,600 | ||
Deferred tax assets | 0 | ||
Accrued Interest And Operating Lease Income Receivable, Net | |||
Interest receivable | |||
Accrued interest | $ 100 | $ 100 | |
Facilities | |||
Property, Plant and Equipment | |||
Useful life | 40 years | ||
Furniture and Equipment | |||
Property, Plant and Equipment | |||
Useful life | 5 years |
Real Estate (Schedule of Real E
Real Estate (Schedule of Real Estate Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Real Estate Properties [Line Items] | |||
Less: accumulated depreciation | [1] | $ (21,080) | $ (18,096) |
Real estate, net | [1] | 76,320 | 76,497 |
Operating properties | |||
Real Estate Properties [Line Items] | |||
Land, at cost | 5,570 | 5,570 | |
Buildings and improvements, at cost | 91,830 | 89,023 | |
Less: accumulated depreciation | (21,080) | (18,096) | |
Real estate, net | $ 76,320 | $ 76,497 | |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Real Estate (Tenant Reimburseme
Real Estate (Tenant Reimbursements) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Real Estate [Abstract] | ||||
Tenant expense reimbursements | $ 0.7 | $ 1 | $ 1.5 | $ 2.4 |
Real Estate (Allowance for Doub
Real Estate (Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Real Estate Tenant Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts receivable | $ 0.1 | $ 0.1 |
Real Estate (Future Minimum Ope
Real Estate (Future Minimum Operating Lease Payments) (Details) - Operating properties $ in Thousands | Sep. 30, 2023 USD ($) |
Real Estate Properties [Line Items] | |
2023 (remaining three months) | $ 1,080 |
2024 | 4,243 |
2025 | 4,224 |
2026 | 4,203 |
2027 | 1,570 |
Thereafter | $ 1,117 |
Land and Development (Schedule
Land and Development (Schedule of Land and Development Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Real Estate Properties [Line Items] | |||
Total land and development, net | [1] | $ 198,289 | $ 232,014 |
Land and development asset | |||
Real Estate Properties [Line Items] | |||
Land and land development, at cost | 210,266 | 243,727 | |
Less: accumulated depreciation | (11,977) | (11,713) | |
Total land and development, net | $ 198,289 | $ 232,014 | |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Land and Development (Dispositi
Land and Development (Dispositions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Real Estate Properties [Line Items] | ||||
Revenues | $ 43,571 | $ 38,412 | $ 85,837 | $ 106,026 |
Impairment of assets | 1,750 | |||
Land development revenue | ||||
Real Estate Properties [Line Items] | ||||
Revenues | 24,836 | 15,087 | 46,219 | 54,390 |
Cost of sales expense | $ 17,761 | $ 16,778 | $ 40,093 | $ 55,369 |
Loans Receivable and Other Le_3
Loans Receivable and Other Lending Investments, net (Schedule of Loans Receivable) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | $ 16,576 | $ 49,580 | |||||
Other lending investments | 4,081 | 0 | |||||
Total gross carrying value of loans receivable and other lending investments | 20,657 | 49,580 | |||||
Allowance for loan losses | (484) | (925) | |||||
Total loans receivable and other lending investments, net | [1] | 20,173 | 48,655 | ||||
Available-for-sale debt securities | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Other lending investments | 4,081 | 0 | |||||
Senior mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 2,550 | 36,249 | |||||
Subordinate mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 14,026 | 13,331 | |||||
Construction Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 0 | 36,249 | |||||
Allowance for loan losses | (92) | $ (848) | $ (861) | $ (1,213) | |||
Construction Loans | Senior mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 0 | 36,249 | |||||
Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 16,576 | 13,331 | |||||
Allowance for loan losses | (484) | $ (389) | (437) | $ (378) | $ (450) | $ (676) | |
Loans | Senior mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | 2,550 | 0 | |||||
Loans | Subordinate mortgages | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gross carrying value of loans | $ 14,026 | $ 13,331 | |||||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Loans Receivable and Other Le_4
Loans Receivable and Other Lending Investments, net (Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivables | ||||||
Allowance for loan losses at beginning of period | $ 925 | |||||
Provision for (recovery of) loan losses | $ 95 | $ (157) | 1,727 | $ 22,556 | ||
Allowance for loan losses at end of period | $ 925 | 484 | 484 | |||
Held to Maturity Debt Securities | ||||||
Allowance for loan losses at beginning of period | 1,014 | 2,304 | ||||
Provision for (recovery of) loan losses | (67) | 23,643 | ||||
Charge offs | (25,000) | |||||
Allowance for loan losses at end of period | 947 | 947 | ||||
Total | ||||||
Allowance for loan losses at beginning of period | 389 | 3,033 | 925 | 4,769 | ||
Provision for (recovery of) loan losses | 95 | (143) | (441) | 23,121 | ||
Charge offs | (25,000) | |||||
Allowance for loan losses at end of period | 925 | 484 | 2,890 | 484 | 2,890 | |
Provision for (recovery of) loan losses | 100 | (200) | 1,700 | 22,600 | ||
Construction Loans | ||||||
Financing Receivables | ||||||
Allowance for loan losses at beginning of period | 861 | 92 | 1,213 | |||
Provision for (recovery of) loan losses | (13) | (92) | (365) | |||
Allowance for loan losses at end of period | 92 | 848 | 848 | |||
Loans | ||||||
Financing Receivables | ||||||
Allowance for loan losses at beginning of period | 389 | 450 | 437 | 676 | ||
Provision for (recovery of) loan losses | 95 | (72) | 47 | (298) | ||
Allowance for loan losses at end of period | 437 | $ 484 | 378 | 484 | 378 | |
Specific receivables | ||||||
Financing Receivables | ||||||
Allowance for loan losses at beginning of period | 708 | 396 | 576 | |||
Provision for (recovery of) loan losses | 9 | (396) | 141 | |||
Allowance for loan losses at end of period | 396 | $ 717 | $ 717 | |||
Loan receivable transferred to Held for Sale | ||||||
Financing Receivables | ||||||
Provision for (recovery of) loan losses | $ 23,800 | |||||
Total | ||||||
Loss on sale of loan receivable | $ 2,200 | $ 2,200 |
Loans Receivable and Other Le_5
Loans Receivable and Other Lending Investments, net (Investment in Loans and Associated Allowance for Loan Loss) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Loans | |||||||
Total | $ 16,576 | $ 49,580 | |||||
Available-for-sale debt securities | |||||||
Total | 4,081 | 0 | |||||
Less: Allowance for loan losses | |||||||
Individually evaluated for impairment | 0 | (396) | |||||
Collectively evaluated for impairment | (484) | (529) | |||||
Total | (484) | (925) | |||||
Individually Evaluated for Impairment | 0 | 29,097 | |||||
Collectively Evaluated for Impairment | 20,173 | 19,558 | |||||
Total loans receivable and other lending investments, net | [1] | 20,173 | 48,655 | ||||
Available-for-sale debt securities | |||||||
Available-for-sale debt securities | |||||||
Collectively Evaluated for Impairment | 4,081 | ||||||
Total | 4,081 | 0 | |||||
Available-for-sale debt securities | Individually Evaluated for Impairment | |||||||
Available-for-sale debt securities | |||||||
Individually Evaluated for Impairment | 0 | ||||||
Construction Loans | |||||||
Loans | |||||||
Individually Evaluated for Impairment | 29,493 | ||||||
Collectively Evaluated for Impairment | 6,756 | ||||||
Total | 0 | 36,249 | |||||
Less: Allowance for loan losses | |||||||
Total | (92) | $ (848) | $ (861) | $ (1,213) | |||
Net premiums (discounts) | 100 | ||||||
Loans | |||||||
Loans | |||||||
Individually Evaluated for Impairment | 0 | 0 | |||||
Collectively Evaluated for Impairment | 16,576 | 13,331 | |||||
Total | 16,576 | 13,331 | |||||
Less: Allowance for loan losses | |||||||
Total | $ (484) | $ (389) | $ (437) | $ (378) | $ (450) | $ (676) | |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Loans Receivable and Other Le_6
Loans Receivable and Other Lending Investments, net (Credit Characteristics for Performing Loans) (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) loan |
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Total | $ 16,576 | $ 49,580 |
Number of non accrual loans | loan | 1 | |
Senior mortgages | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Total | 2,550 | $ 36,249 |
Subordinate mortgages | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Total | 14,026 | 13,331 |
Performing Financial Instruments | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 2,550 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 6,756 |
5 Years or More Prior | 14,026 | 13,331 |
Total | 16,576 | 20,087 |
Performing Financial Instruments | Senior mortgages | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 2,550 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 6,756 |
5 Years or More Prior | 0 | 0 |
Total | 2,550 | 6,756 |
Performing Financial Instruments | Senior mortgages | Risk Rating 1.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 1.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 2.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 2.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 3.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 2,550 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 2,550 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 3.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 6,756 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 6,756 |
Performing Financial Instruments | Senior mortgages | Risk Rating 4.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 4.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Senior mortgages | Risk Rating 5.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 14,026 | 13,331 |
Total | 14,026 | 13,331 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 1.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 1.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 2.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 2.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 3.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 14,026 | 13,331 |
Total | 14,026 | 13,331 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 3.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 4.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 4.5 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | 0 | 0 |
Performing Financial Instruments | Subordinate mortgages | Risk Rating 5.0 | ||
Recorded Investments in loans, presented by class and by credit quality, as indicated by risk rating | ||
Current | 0 | 0 |
1 Year Prior | 0 | 0 |
2 Years Prior | 0 | 0 |
3 Years Prior | 0 | 0 |
4 Years Prior | 0 | 0 |
5 Years or More Prior | 0 | 0 |
Total | $ 0 | $ 0 |
Loans Receivable and Other Le_7
Loans Receivable and Other Lending Investments, net (Credit Characteristics by Payment Status) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Recorded investment in loans, aged by payment status and presented by class | ||
Total | $ 16,576 | $ 49,580 |
Past Due | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 29,493 |
Greater Than 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 0 |
Less Than and Equal to 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 29,493 |
Current | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 16,576 | 20,087 |
Senior mortgages | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 2,550 | 36,249 |
Senior mortgages | Past Due | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 29,493 |
Senior mortgages | Greater Than 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 0 |
Senior mortgages | Less Than and Equal to 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 29,493 |
Senior mortgages | Current | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 2,550 | 6,756 |
Subordinate mortgages | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 14,026 | 13,331 |
Subordinate mortgages | Past Due | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 0 |
Subordinate mortgages | Greater Than 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 0 |
Subordinate mortgages | Less Than and Equal to 90 Days | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | 0 | 0 |
Subordinate mortgages | Current | ||
Recorded investment in loans, aged by payment status and presented by class | ||
Total | $ 14,026 | $ 13,331 |
Loans Receivable and Other Le_8
Loans Receivable and Other Lending Investments, Net (Impaired Loans) (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) loan | |
Impaired Loans | |||||
Amortized Cost | $ 0 | $ 0 | $ 29,493,000 | ||
Unpaid Principal Balance | 0 | 0 | 29,358,000 | ||
Related Allowance | 0 | 0 | $ (396,000) | ||
Number of non accrual loans | loan | 1 | ||||
Interest income on Impaired loans | 0 | $ 0 | 0 | $ 0 | |
Senior mortgages | |||||
Impaired Loans | |||||
Amortized Cost | 0 | 0 | $ 29,493,000 | ||
Unpaid Principal Balance | 0 | 0 | 29,358,000 | ||
Related Allowance | $ 0 | $ 0 | (396,000) | ||
Nonperforming Financial Instruments | |||||
Financing Receivable, Impaired [Line Items] | |||||
Carrying value of loans | $ 29,100,000 |
Loans Receivable and Other Le_9
Loans Receivable and Other Lending Investments, net (Loan Receivable Held for Sale) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) security | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||||||
Provision for (recovery of) loan losses | $ 95 | $ (157) | $ 1,727 | $ 22,556 | |||
Proceeds from sale of loan receivable | 37,650 | $ 49,382 | |||||
Other lending investments | |||||||
Face Value | $ 4,220 | 4,220 | 4,220 | ||||
Amortized Cost Basis | 4,220 | $ 4,220 | 4,220 | ||||
Net Unrealized Gain (Loss) | $ (139) | $ (139) | |||||
Debt Securities, Available-for-Sale, Type [Extensible Enumeration] | us-gaap:MunicipalNotesMember | us-gaap:MunicipalNotesMember | us-gaap:MunicipalNotesMember | ||||
Number of securities acquired | security | 2 | ||||||
Securities acquired during the period | $ 4,200 | ||||||
Rate of interest accrual on securities | 7% | 7% | 7% | ||||
Carrying Value | |||||||
Other lending investments | |||||||
Net Carrying Value | $ 4,081 | $ 4,081 | $ 4,081 | ||||
Fair Value | |||||||
Other lending investments | |||||||
Net Carrying Value | $ 4,081 | $ 4,081 | 4,081 | ||||
Loan receivable transferred to Held for Sale | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Provision for (recovery of) loan losses | $ 23,800 | ||||||
Proceeds from sale of loan receivable | $ 37,700 | ||||||
Loss on sale of loan receivable | $ 2,200 | $ 2,200 |
Other Investments (Schedule of
Other Investments (Schedule of Other Investments) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | ||
Schedule of Equity Method Investments [Line Items] | |||||||
Carrying value | $ 240,986 | $ 240,986 | $ 587,138 | ||||
Other investments | [1] | 240,986 | 240,986 | 587,138 | |||
Earnings from equity method investments | 217 | $ 28,993 | 30,433 | $ 50,502 | |||
Unrealized loss on equity investment | 80,189 | 247,121 | |||||
Safehold Inc. | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Carrying value | $ 240,703 | 240,703 | $ 554,733 | ||||
Earnings from equity method investments | 16,052 | $ 1,089 | 27,956 | ||||
Number of shares owned (in shares) | 13.5 | 13.5 | |||||
Closing price (in dollars per share) | $ 17.80 | $ 17.80 | |||||
Market value | $ 240,700 | $ 240,700 | |||||
Unrealized loss on equity investment | 80,200 | 247,100 | |||||
Dilution gain | 300 | ||||||
Shares of SAFE allocated from iStar | 15.2 | ||||||
Reduction to allocated shares of affiliate based on final terms of Spin-Off | 1.8 | ||||||
Carrying value of the adjusted shares of SAFE allocated per final terms of Spin-Off agreement | $ 65,600 | ||||||
Other real estate and strategic equity investments | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Carrying value | 283 | 283 | $ 32,405 | ||||
Earnings from equity method investments | $ 217 | $ 12,941 | $ 29,344 | 22,546 | |||
Equity method investment earnings from settlement of interest on a venture | 5,000 | ||||||
Multi-family property sold | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Earnings from equity method investments | $ 11,500 | ||||||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Other Investments (Safehold Inc
Other Investments (Safehold Inc) (Details) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2023 USD ($) item | Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 USD ($) shares | |
Safehold Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of shares owned (in shares) | shares | 13.5 | 13.5 | |
Equity interest | 19% | 19% | |
Safehold Inc. | Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Beneficial ownership percentage under which restrictive voting requirements no longer apply | 7.50% | ||
Percentage of ownership threshold under which registration rights will terminate. | 2% | ||
Safehold Management Services | |||
Schedule of Equity Method Investments [Line Items] | |||
Management fees | $ 6.3 | $ 13.5 | |
Safehold Management Services | Affiliated entity | |||
Schedule of Equity Method Investments [Line Items] | |||
Management agreement renewal term | 1 year | ||
Annual management fee - Year 1 | $ 25 | ||
Annual management fee - Year 2 | 15 | ||
Annual management fee - Year 3 | 10 | ||
Annual management fee - Year 4 | $ 5 | ||
Number of initial annual contract terms | item | 4 | ||
Annual management fee percent of gross book value, year five and thereafter | 2% | ||
Notice required to terminate management agreement with cause | 30 days | ||
Percentage approval of independent directors to terminate management agreement without cause | 66.70% | ||
Termination fee, termination without cause | $ 50 | ||
Termination fee due to liquidation of consolidated assets after third anniversary of agreement | 0 | ||
Termination fee due to reduction in consolidated assets - Year 1 | 30 | ||
Termination fee due to reduction in consolidated assets - Year 2 | 15 | ||
Termination fee due to reduction in consolidated assets - Year 3 | $ 5 | ||
Safehold Management Services | Affiliated entity | Minimum | |||
Schedule of Equity Method Investments [Line Items] | |||
Notice required to terminate management agreement without cause | 180 days |
Other Investments (Other Real E
Other Investments (Other Real Estate Equity Investments) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) property | Dec. 31, 2022 USD ($) property | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ | $ 240,986 | $ 587,138 |
Operating properties and land and development venture | Other real estate equity investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of operating properties | property | 2 | 3 |
Equity interest | 95% | 95% |
Other Investments (Summarized I
Other Investments (Summarized Investee Financial Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Revenues | $ 43,571 | $ 38,412 | $ 85,837 | $ 106,026 | |
Expenses | 44,875 | 49,837 | 130,058 | 160,381 | |
Net Income (Loss) | $ (81,814) | $ 17,511 | $ (262,490) | (3,899) | |
Safehold Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Revenues | $ 78,329 | 196,943 | |||
Expenses | 75,875 | 136,517 | |||
Net Income (Loss) | $ 4,682 | $ 113,628 |
Other Assets and Other Liabil_3
Other Assets and Other Liabilities (Deferred Expenses and Other Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Real Estate Properties [Line Items] | ||||||
Other assets | $ 11,001 | $ 11,001 | $ 9,471 | |||
Operating lease right-of-use assets | 1,492 | 1,492 | 1,860 | |||
Restricted cash | 5,653 | 5,653 | 3,247 | |||
Other receivables | 2,516 | 2,516 | 1,895 | |||
Leasing costs, net | 109 | 109 | 129 | |||
Intangible assets, net | 273 | 273 | 319 | |||
Deferred expenses and other assets, net | [1] | 21,044 | 21,044 | 16,921 | ||
Intangible assets, accumulated amortization | 100 | $ 100 | 100 | |||
Amortization of above market lease | $ 8,000 | $ 100 | ||||
Weighted average amortization period | 5 years 1 month 6 days | |||||
Accumulated amortization on leasing costs | $ 100 | $ 100 | $ 100 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position | Deferred expenses and other assets, net | Deferred expenses and other assets, net | Deferred expenses and other assets, net | |||
Real Estate Expense | ||||||
Real Estate Properties [Line Items] | ||||||
Operating lease expense | $ 100 | $ 100 | $ 400 | $ 500 | ||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Other Assets and Other Liabil_4
Other Assets and Other Liabilities (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Other Assets and Other Liabilities [Abstract] | |||
Other liabilities | $ 36,304 | $ 26,235 | |
Accrued expenses | 4,716 | 4,861 | |
Operating lease liabilities | 1,648 | 2,006 | |
Accounts payable, accrued expenses and other liabilities | [1],[2] | 42,668 | 33,102 |
Deferred income | 20,100 | 21,200 | |
Management fees due SAFE | 7,200 | ||
Other payables related to real estate properties | $ 6,200 | $ 2,500 | |
Operating Lease, Liability, Statement of Financial Position | Accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities | |
[1] As of September 30, 2023, includes $7.2 million of management fees due to Safe (refer to Note 1). Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Debt Obligations, net (Schedule
Debt Obligations, net (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | ||||
Total debt obligations, net | [1] | $ 212,819 | $ 212,819 | |
Interest costs capitalized | 600 | 1,600 | ||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total debt obligations | 215,000 | 215,000 | $ 0 | |
Debt discounts and deferred financing costs, net | (2,181) | (2,181) | 0 | |
Total debt obligations, net | 212,819 | 212,819 | 0 | |
Secured Debt | Safe Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total debt obligations | $ 115,000 | $ 115,000 | 0 | |
Stated interest rate | 8% | 8% | ||
Secured Debt | Margin Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Total debt obligations | $ 100,000 | $ 100,000 | $ 0 | |
Secured Debt | Margin Loan Facility | SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis point spread on variable interest rate | 3% | |||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Debt Obligations, net (Future S
Debt Obligations, net (Future Scheduled Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Maturities of Long-term Debt [Abstract] | |||
Total debt obligations, net | [1] | $ 212,819 | |
Secured Debt | |||
Maturities of Long-term Debt [Abstract] | |||
2023 | 0 | ||
2024 | 0 | ||
2025 | 0 | ||
2026 | 100,000 | ||
2027 | 115,000 | ||
Thereafter | 0 | ||
Total principal maturities | 215,000 | $ 0 | |
Debt discounts and deferred financing costs, net | (2,181) | 0 | |
Total debt obligations, net | $ 212,819 | $ 0 | |
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Debt Obligations, net (Secured
Debt Obligations, net (Secured Term Loan and Credit Facility Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||||
Loss (gain) on early extinguishment of debt | $ 482 | $ 1,523 | |||
Safehold Inc. | |||||
Line of Credit Facility [Line Items] | |||||
Interest expense | 2,400 | 4,800 | |||
Loan Payable to iStar | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 125,000 | ||||
Stated interest rate | 8% | ||||
Interest expense | 2,500 | ||||
Secured Debt | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, outstanding balance | $ 215,000 | $ 215,000 | $ 215,000 | $ 0 | |
Secured Debt | Safe Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Stated interest rate | 8% | 8% | 8% | ||
Long-term debt, outstanding balance | $ 115,000 | $ 115,000 | $ 115,000 | 0 | |
Secured Debt | Safe Credit Facility | Safehold Inc. | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fees paid | $ 600 | ||||
Secured Debt | Safe Credit Facility | Safehold Inc. | Interest rate any time other than during Safe Loan PIK Period | |||||
Line of Credit Facility [Line Items] | |||||
Stated interest rate | 8% | ||||
Secured Debt | Safe Credit Facility | Safehold Inc. | Interest rate at any time other than during Safe Loan PIK Period to extent any loan remains outstanding under the Incremental Facility | |||||
Line of Credit Facility [Line Items] | |||||
Stated interest rate | 10% | ||||
Secured Debt | Term Loan [Member] | Safehold Inc. | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 115,000 | ||||
Secured Debt | Incremental Borrowing Facility | Safehold Inc. | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | 25,000 | ||||
Secured Debt | Margin Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, outstanding balance | $ 100,000 | 100,000 | $ 100,000 | $ 0 | |
Secured Debt | Margin Loan Facility | Morgan Stanley | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 140,000 | ||||
Debt instrument term | 3 years | ||||
Loan proceeds used to extinguish senior unsecured notes | $ 88,000 | ||||
Repayment of principal | $ 40,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating | ||
2023 (remaining three months) | $ 121 | |
2024 | 486 | |
2025 | 486 | |
2026 | 486 | |
2027 | 162 | |
Thereafter | 0 | |
Total undiscounted cash flows | 1,741 | |
Present value discount | (93) | |
Lease liabilities | $ 1,648 | $ 2,006 |
Operating leases, weighted average incremental borrowing rate, discount rate (percent) | 3% | |
Operating leases, weighted average lease term (in years) | 3 years 7 months 6 days |
Equity (Details)
Equity (Details) | 9 Months Ended | |||
Sep. 30, 2023 class shares | Mar. 31, 2023 shares | Dec. 31, 2022 shares | Sep. 30, 2022 shares | |
Equity | ||||
Percentage of common shares of beneficial interest distributed at Spin-off | 100% | |||
Pro rata distribution of common shares issued for each outstanding share of iStar common share at Spin-off. | 0.153 | 0.153 | 0.153 | |
Number of classes of common stock | class | 1 | |||
Common Stock, shares outstanding (in shares) | 13,319,552 | 0 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (81,758) | $ 17,568 | $ (262,432) | $ (3,853) |
Net (income) loss attributable to noncontrolling interests | (56) | (57) | (58) | (46) |
Net income (loss) allocable to common shareholders | $ (81,814) | $ 17,511 | $ (262,490) | $ (3,899) |
Earnings Per Share (Earnings Al
Earnings Per Share (Earnings Allocable to Common Shares) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | |
Numerator for basic and diluted earnings per share: | |||||
Net income (loss) allocable to common shareholders - Basic | $ (81,814) | $ 17,511 | $ (262,490) | $ (3,899) | |
Net income (loss) allocable to common shareholders - Diluted | $ (81,814) | $ 17,511 | $ (262,490) | $ (3,899) | |
Denominator for basic and diluted earnings per share: | |||||
Weighted average common shares outstanding for basic earnings per common share | 13,320,000 | 13,320,000 | 13,320,000 | 13,320,000 | |
Weighted average common shares outstanding for diluted earnings per common share | 13,320,000 | 13,320,000 | 13,320,000 | 13,320,000 | |
Basic and diluted earnings per common share: | |||||
Net income (loss) allocable to common shareholders - Basic | $ (6.14) | $ 1.31 | $ (19.71) | $ (0.29) | |
Net income (loss) allocable to common shareholders - Diluted | $ (6.14) | $ 1.31 | $ (19.71) | $ (0.29) | |
Pro rata distribution of common shares issued for each outstanding share of iStar common share at Spin-off. | 0.153 | 0.153 | 0.153 | 0.153 | 0.153 |
Fair Values (Schedule of Fair V
Fair Values (Schedule of Fair Value Measurement) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | ||
Assets and liabilities recorded at fair value | ||||
Loan receivable held for sale | [1] | $ 37,650 | ||
Other investments | [1] | 587,138 | $ 240,986 | |
Charge-off of held-to-maturity security | $ 25,000 | |||
Fair Value | ||||
Assets and liabilities recorded at fair value | ||||
Available-for-sale securities | 4,081 | |||
Recurring Basis | Significant unobservable inputs (Level 3) | ||||
Assets and liabilities recorded at fair value | ||||
Available-for-sale securities | 4,081 | |||
Recurring Basis | Fair Value | ||||
Assets and liabilities recorded at fair value | ||||
Available-for-sale securities | 4,081 | |||
Other investments | 240,703 | |||
Recurring Basis | Fair Value | Quoted market prices in active markets (Level 1) | ||||
Assets and liabilities recorded at fair value | ||||
Other investments | 240,703 | |||
Recurring Basis | Fair Value | Significant unobservable inputs (Level 3) | ||||
Assets and liabilities recorded at fair value | ||||
Available-for-sale securities | $ 4,081 | |||
Non-recurring Basis | ||||
Assets and liabilities recorded at fair value | ||||
Impairment of real estate | 1,800 | |||
Aggregate impairments | 12,700 | |||
Non-recurring Basis | Fair Value | ||||
Assets and liabilities recorded at fair value | ||||
Real estate, net | 811 | |||
Impaired land and development | 26,300 | |||
Loan receivable held for sale | 37,650 | |||
Non-recurring Basis | Fair Value | Significant unobservable inputs (Level 3) | ||||
Assets and liabilities recorded at fair value | ||||
Real estate, net | 811 | |||
Impaired land and development | 26,300 | |||
Loan receivable held for sale | $ 37,650 | |||
Discount rate used t determine future cash flows | 0.125 | |||
[1] Refer to Note 2 for details on the Company’s combined and consolidated variable interest entities (“VIEs”). |
Fair Values - (Available-For-Sa
Fair Values - (Available-For-Sale Securities) (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Assets and liabilities recorded at fair value | ||
Purchases | $ 4,200 | |
Unrealized losses recorded in other comprehensive income (loss) | (139) | $ (139) |
Recurring Basis | Significant unobservable inputs (Level 3) | ||
Assets and liabilities recorded at fair value | ||
Purchases | 4,220 | |
Unrealized losses recorded in other comprehensive income (loss) | (139) | |
Ending balance | $ 4,081 | $ 4,081 |
Fair Values - (Carrying Value a
Fair Values - (Carrying Value and Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands, shares in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Book and estimated fair values of financial instruments | ||
Equity method investments | $ 240,986 | $ 587,138 |
Safehold Inc. | ||
Book and estimated fair values of financial instruments | ||
Equity method investments | $ 240,703 | 554,733 |
Number of shares owned (in shares) | 13.5 | |
Carrying Value | ||
Book and estimated fair values of financial instruments | ||
Loans receivable and other lending investments | $ 20 | 49 |
Loans receivable held for sale | 0 | 38 |
Cash and cash equivalents | 46 | 4 |
Restricted cash | 6 | 3 |
Debt obligations, net | 213 | |
Carrying Value | Safehold Inc. | ||
Book and estimated fair values of financial instruments | ||
Equity method investments | 241 | |
Fair Value | ||
Book and estimated fair values of financial instruments | ||
Loans receivable and other lending investments | 17 | 46 |
Loans receivable held for sale | 0 | 38 |
Cash and cash equivalents | 46 | 4 |
Restricted cash | 6 | $ 3 |
Debt obligations, net | 213 | |
Fair Value | Safehold Inc. | ||
Book and estimated fair values of financial instruments | ||
Equity method investments | $ 241 |
Subsequent Events (Detail)
Subsequent Events (Detail) - Secured Debt - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Nov. 08, 2023 | Sep. 30, 2023 | Oct. 06, 2023 | Oct. 04, 2023 | |
Margin Loan Facility | Morgan Stanley | ||||
Subsequent events | ||||
Floor share price of pledged common stock that would trigger mandatory repayment of outstanding borrowings under the facility | $ 14 | |||
Repayment of principal | $ 40 | |||
Subsequent Events | Incremental Borrowing Facility | Safehold Inc. | ||||
Subsequent events | ||||
Incremental borrowing capacity available to replenish funds expended to make voluntary prepayments on the Margin Loan Facility | $ 25 | |||
Subsequent Events | Margin Loan Facility | Morgan Stanley | ||||
Subsequent events | ||||
Floor share price of pledged common stock that would trigger mandatory repayment of outstanding borrowings under the facility | $ 10 | |||
Repayment of principal | $ 19.8 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (81,814) | $ 17,511 | $ (262,490) | $ (3,899) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |