Safehold Inc. 10-Q

Item 1. Financial Statements iStar Inc. Consolidated Balance Sheets (In thousands, except per share data) (1) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ June 30, ​ December 31, ​ ​ 2021 2020 ​ ASSETS ​ ​ ​ Real estate ​ ​ ​ Real estate, at cost ​ $ 1,657,173 ​ $ 1,752,053 ​ Less: accumulated depreciation ​ ( 290,167 ) ​ ( 267,772 ) ​ Real estate, net ​ 1,367,006 ​ 1,484,281 ​ Real estate available and held for sale ​ 99,201 ​ 5,212 ​ Total real estate ​ 1,466,207 ​ 1,489,493 ​ Net investment in leases ($ 9,005 and $ 10,871 of allowances as of June 30, 2021 and December 31, 2020, respectively) ​ 477,798 ​ 429,101 ​ Land and development, net ​ 381,719 ​ 430,663 ​ Loans receivable and other lending investments, net ($ 7,135 and $ 13,170 of allowances as of June 30, 2021 and December 31, 2020, respectively) ​ 454,960 ​ 732,330 ​ Loans receivable held for sale ​ ​ 62,525 ​ ​ — ​ Other investments ​ 1,275,954 ​ 1,176,560 ​ Cash and cash equivalents ​ 154,941 ​ 98,633 ​ Finance lease right of use assets ​ ​ 142,985 ​ ​ 143,727 ​ Accrued interest and operating lease income receivable, net ​ 7,328 ​ 10,061 ​ Deferred operating lease income receivable, net ​ 63,339 ​ 58,128 ​ Deferred expenses and other assets, net ​ 279,894 ​ 293,112 ​ Total assets ​ $ 4,767,650 ​ $ 4,861,808 ​ LIABILITIES AND EQUITY ​ ​ ​ Liabilities: ​ ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 315,337 ​ $ 317,402 ​ Finance lease liabilities ​ ​ 151,925 ​ ​ 150,520 ​ Liabilities associated with properties held for sale ​ 2,201 ​ 27 ​ Loan participations payable, net ​ — ​ 42,501 ​ Debt obligations, net ​ 3,289,481 ​ 3,286,975 ​ Total liabilities ​ 3,758,944 ​ 3,797,425 ​ Commitments and contingencies (refer to Note 12) ​ ​ ​ Equity: ​ ​ ​ iStar Inc. shareholders' equity: ​ ​ ​ Preferred Stock Series D, G and I, liquidation preference $ 25.00 per share (refer to Note 14) ​ 12 ​ 12 ​ Common Stock, $ 0.001 par value, 200,000 shares authorized, 72,419 and 73,967 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively ​ 72 ​ 74 ​ Additional paid-in capital ​ 3,185,748 ​ 3,240,535 ​ Accumulated deficit ​ ( 2,338,454 ) ​ ( 2,316,972 ) ​ Accumulated other comprehensive loss (refer to Note 14) ​ ( 35,824 ) ​ ( 52,680 ) ​ Total iStar Inc. shareholders' equity ​ 811,554 ​ 870,969 ​ Noncontrolling interests ​ 197,152 ​ 193,414 ​ Total equity ​ 1,008,706 ​ 1,064,383 ​ Total liabilities and equity ​ $ 4,767,650 ​ $ 4,861,808 ​ (1) Refer to Note 2 for details on the Company’s consolidated variable interest entities (“VIEs”). The accompanying notes are an integral part of the consolidated financial statements. ​ 2 Table of Contents iStar Inc. Consolidated Statements of Operations (In thousands, except per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, ​ For the Six Months Ended June 30, ​ ​ 2021 2020 2021 2020 ​ Revenues: ​ ​ ​ ​ ​ ​ Operating lease income ​ $ 45,544 ​ $ 46,812 ​ $ 92,988 ​ $ 94,158 ​ Interest income ​ 8,973 ​ 15,439 ​ 19,623 ​ 32,655 ​ Interest income from sales-type leases ​ 8,689 ​ 8,295 ​ 17,316 ​ 16,650 ​ Other income ​ 10,064 ​ 10,292 ​ 24,354 ​ 30,660 ​ Land development revenue ​ 32,318 ​ 15,577 ​ 64,567 ​ 95,752 ​ Total revenues ​ 105,588 ​ 96,415 ​ 218,848 ​ 269,875 ​ Costs and expenses: ​ ​ ​ ​ ​ Interest expense ​ 39,417 ​ 41,950 ​ 78,980 ​ 85,341 ​ Real estate expense ​ 18,289 ​ 14,276 ​ 35,183 ​ 36,774 ​ Land development cost of sales ​ 30,803 ​ 16,287 ​ 60,126 ​ 93,346 ​ Depreciation and amortization ​ 14,660 ​ 14,300 ​ 30,115 ​ 28,786 ​ General and administrative ​ 30,394 ​ 18,998 ​ 51,833 ​ 53,270 ​ (Recovery of) provision for loan losses ​ ( 2,263 ) ​ 2,067 ​ ( 6,057 ) ​ 6,070 ​ (Recovery of) provision for losses on net investment in leases ​ ( 265 ) ​ 534 ​ ( 1,866 ) ​ 1,826 ​ Impairment of assets ​ — ​ 4,783 ​ 1,785 ​ 6,491 ​ Other expense ​ 211 ​ 203 ​ 464 ​ 277 ​ Total costs and expenses ​ 131,246 ​ 113,398 ​ 250,563 ​ 312,181 ​ Income from sales of real estate ​ 2,210 ​ 62 ​ 2,822 ​ 62 ​ Loss from operations before earnings from equity method investments and other items ​ ( 23,448 ) ​ ( 16,921 ) ​ ( 28,893 ) ​ ( 42,244 ) ​ Loss on early extinguishment of debt, net ​ — ​ — ​ — ​ ( 4,115 ) ​ Earnings from equity method investments ​ 12,697 ​ 2,586 ​ 25,466 ​ 19,198 ​ Net loss before income taxes ​ ( 10,751 ) ​ ( 14,335 ) ​ ( 3,427 ) ​ ( 27,161 ) ​ Income tax expense ​ ( 665 ) ​ ( 28 ) ​ — ​ ( 88 ) ​ Net loss ​ ( 11,416 ) ​ ( 14,363 ) ​ ( 3,427 ) ​ ( 27,249 ) ​ Net (income) attributable to noncontrolling interests ​ ( 2,253 ) ​ ( 3,098 ) ​ ( 4,773 ) ​ ( 5,789 ) ​ Net loss attributable to iStar Inc. ​ ( 13,669 ) ​ ( 17,461 ) ​ ( 8,200 ) ​ ( 33,038 ) ​ Preferred dividends ​ ( 5,874 ) ​ ( 5,874 ) ​ ( 11,748 ) ​ ( 11,748 ) ​ Net loss allocable to common shareholders ​ $ ( 19,543 ) ​ $ ( 23,335 ) ​ $ ( 19,948 ) ​ $ ( 44,786 ) ​ Per common share data: ​ ​ ​ ​ ​ Net loss allocable to common shareholders: ​ ​ ​ ​ ​ Basic ​ $ ( 0.27 ) ​ $ ( 0.31 ) ​ $ ( 0.27 ) ​ $ ( 0.58 ) ​ Diluted ​ $ ( 0.27 ) ​ $ ( 0.31 ) ​ $ ( 0.27 ) ​ $ ( 0.58 ) ​ Weighted average number of common shares: ​ ​ ​ ​ ​ Basic ​ 72,872 ​ 76,232 ​ 73,374 ​ 76,838 ​ Diluted ​ 72,872 ​ 76,232 ​ 73,374 ​ 76,838 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 3 Table of Contents iStar Inc. Consolidated Statements of Comprehensive Income (Loss) (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, For the Six Months Ended June 30, ​ ​ 2021 2020 ​ 2021 2020 ​ Net loss ​ $ ( 11,416 ) ​ $ ( 14,363 ) ​ $ ( 3,427 ) ​ $ ( 27,249 ) ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ Reclassification of losses on cash flow hedges into earnings upon realization (1) ​ 2,486 ​ 2,106 ​ 4,824 ​ 3,420 ​ Unrealized gains (losses) on available-for-sale securities ​ 657 ​ 972 ​ ( 374 ) ​ 1,175 ​ Unrealized gains (losses) on cash flow hedges ( 764 ) ( 3,351 ) ​ 11,211 ​ ( 31,127 ) ​ Other comprehensive income (loss) ​ 2,379 ( 273 ) ​ 15,661 ​ ( 26,532 ) ​ Comprehensive income (loss) ​ ( 9,037 ) ​ ( 14,636 ) ​ 12,234 ​ ( 53,781 ) ​ Comprehensive (income) loss attributable to noncontrolling interests ​ ( 2,765 ) ​ ( 2,348 ) ​ ( 7,744 ) ​ 405 ​ Comprehensive income (loss) attributable to iStar Inc. ​ $ ( 11,802 ) ​ $ ( 16,984 ) ​ $ 4,490 ​ $ ( 53,376 ) ​ (1) Amounts reclassified to “Interest expense” in the Company’s consolidated statements of operations for the three months ended June 30, 2021 and 2020 are $ 2,029 and $ 1,799 , respectively, and amounts reclassified to “Interest expense” in the Company’s consolidated statements of operations for the six months ended June 30, 2021 and 2020 are $ 4,133 and $ 2,887 , respectively. Amounts reclassified to “Earnings from equity method investments” in the Company’s consolidated statements of operations for the three months ended June 30, 2021 and 2020 are $ 457 and $ 307 , respectively, and amounts reclassified to “Earnings from equity method investments” in the Company’s consolidated statements of operations for the six months ended June 30, 2021 and 2020 are $ 691 and $ 533 , respectively. The accompanying notes are an integral part of the consolidated financial statements. ​ 4 Table of Contents iStar Inc. Consolidated Statements of Changes in Equity (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ iStar Inc. Shareholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ Additional ​ ​ Retained ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ ​ Stock at ​ ​ Paid-In ​ ​ Earnings ​ ​ Comprehensive ​ ​ Noncontrolling ​ Total ​ ​ ​ Stock (1) ​ ​ Par ​ ​ Capital ​ ​ (Deficit) ​ ​ Income (Loss) ​ ​ Interests ​ Equity Balance as of March 31, 2021 ​ $ 12 ​ $ 73 ​ $ 3,204,862 ​ $ ( 2,309,763 ) ​ $ ( 41,858 ) ​ $ 197,681 ​ $ 1,051,007 Dividends declared—preferred ​ — ​ — ​ — ​ ( 5,874 ) ​ — ​ — ​ ( 5,874 ) Dividends declared—common ($ 0.125 per share) ​ — ​ — ​ — ​ ( 9,148 ) ​ — ​ — ​ ( 9,148 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ — ​ 1,199 ​ — ​ — ​ 168 ​ 1,367 Net income (loss) ​ — ​ — ​ — ​ ( 13,669 ) ​ — ​ 2,253 ​ ( 11,416 ) Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 6,034 ​ 512 ​ 6,546 Repurchase of stock ​ — ​ ( 1 ) ​ ( 19,978 ) ​ — ​ — ​ — ​ ( 19,979 ) Contributions from noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ 794 ​ 794 Distributions to noncontrolling interests ​ — ​ — ​ ( 335 ) ​ — ​ — ​ ( 4,256 ) ​ ( 4,591 ) Balance as of June 30, 2021 ​ $ 12 ​ $ 72 ​ $ 3,185,748 ​ $ ( 2,338,454 ) ​ $ ( 35,824 ) ​ $ 197,152 ​ $ 1,008,706 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2020 ​ $ 12 ​ $ 77 ​ $ 3,275,055 ​ $ ( 2,247,504 ) ​ $ ( 59,522 ) ​ $ 191,951 ​ $ 1,160,069 Dividends declared—preferred ​ — ​ — ​ — ​ ( 5,874 ) ​ — ​ — ​ ( 5,874 ) Dividends declared—common ($ 0.11 per share) ​ — ​ — ​ — ​ ( 8,445 ) ​ — ​ — ​ ( 8,445 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ 1 ​ 860 ​ — ​ — ​ 848 ​ 1,709 Net income (loss) ​ — ​ — ​ — ​ ( 17,461 ) ​ — ​ 3,098 ​ ( 14,363 ) Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 477 ​ ( 750 ) ​ ( 273 ) Repurchase of stock ​ — ​ ( 2 ) ​ ( 15,742 ) ​ — ​ — ​ — ​ ( 15,744 ) Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 153 ​ ​ 153 Distributions to noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ ( 3,447 ) ​ ( 3,447 ) Balance as of June 30, 2020 ​ $ 12 ​ $ 76 ​ $ 3,260,173 ​ $ ( 2,279,284 ) ​ $ ( 59,045 ) ​ $ 191,853 ​ $ 1,113,785 5 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ iStar Inc. Shareholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ Additional ​ ​ Retained ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ ​ Stock at ​ ​ Paid-In ​ ​ Earnings ​ ​ Comprehensive ​ ​ Noncontrolling ​ Total ​ ​ ​ Stock (1) ​ ​ Par ​ ​ Capital ​ ​ (Deficit) ​ ​ Income (Loss) ​ ​ Interests ​ Equity Balance as of December 31, 2020 ​ $ 12 ​ $ 74 ​ $ 3,240,535 ​ $ ( 2,316,972 ) ​ $ ( 52,680 ) ​ $ 193,414 ​ $ 1,064,383 Impact from adoption of new accounting standards (refer to Note 3) ​ — ​ — ​ ( 25,869 ) ​ 15,850 ​ — ​ — ​ ( 10,019 ) Dividends declared—preferred ​ — ​ — ​ — ​ ( 11,748 ) ​ — ​ — ​ ( 11,748 ) Dividends declared—common ($ 0.235 per share) ​ — ​ — ​ — ​ ( 17,384 ) ​ — ​ — ​ ( 17,384 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ — ​ 3,771 ​ — ​ — ​ 1,538 ​ 5,309 Net income (loss) ​ — ​ — ​ — ​ ( 8,200 ) ​ — ​ 4,773 ​ ( 3,427 ) Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 16,856 ​ 2,970 ​ 19,826 Repurchase of stock ​ — ​ ( 2 ) ​ ( 32,354 ) ​ — ​ — ​ — ​ ( 32,356 ) Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 857 ​ ​ 857 Distributions to noncontrolling interests ​ ​ — ​ ​ — ​ ​ ( 335 ) ​ ​ — ​ ​ — ​ ​ ( 6,400 ) ​ ​ ( 6,735 ) Balance as of June 30, 2021 ​ $ 12 ​ $ 72 ​ $ 3,185,748 ​ $ ( 2,338,454 ) ​ $ ( 35,824 ) ​ $ 197,152 ​ $ 1,008,706 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2019 ​ $ 12 ​ $ 78 ​ $ 3,284,877 ​ $ ( 2,205,838 ) ​ $ ( 38,707 ) ​ $ 197,538 ​ $ 1,237,960 Impact from adoption of new accounting standards ​ — ​ — ​ — ​ ( 12,382 ) ​ — ​ — ​ ( 12,382 ) Dividends declared—preferred ​ — ​ — ​ — ​ ( 11,748 ) ​ — ​ — ​ ( 11,748 ) Dividends declared—common ($ 0.21 per share) ​ — ​ — ​ — ​ ( 16,278 ) ​ — ​ — ​ ( 16,278 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ 1 ​ 3,082 ​ — ​ — ​ 1,575 ​ 4,658 Net income (loss) ​ — ​ — ​ — ​ ( 33,038 ) ​ — ​ 5,789 ​ ( 27,249 ) Change in accumulated other comprehensive income (loss) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 20,338 ) ​ ​ ( 6,194 ) ​ ​ ( 26,532 ) Repurchase of stock ​ ​ — ​ ​ ( 3 ) ​ ​ ( 27,786 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 27,789 ) Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 317 ​ ​ 317 Distributions to noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ ( 7,172 ) ​ ( 7,172 ) Balance as of June 30, 2020 ​ $ 12 ​ $ 76 ​ $ 3,260,173 ​ $ ( 2,279,284 ) ​ $ ( 59,045 ) ​ $ 191,853 ​ $ 1,113,785 (1) Refer to Note 14 for details on the Company’s Preferred Stock. (2) Net of payments for withholding taxes upon vesting of stock-based compensation. The accompanying notes are an integral part of the consolidated financial statements. ​ 6 Table of Contents iStar Inc. Consolidated Statements of Cash Flows (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ 2021 2020 ​ Cash flows from operating activities: ​ ​ ​ ​ Net income (loss) ​ $ ( 3,427 ) ​ $ ( 27,249 ) ​ Adjustments to reconcile net income (loss) to cash flows from operating activities: ​ ​ ​ (Recovery of) provision for loan losses ​ ( 6,057 ) ​ 6,070 ​ (Recovery of) provision for losses on net investment in leases ​ ( 1,866 ) ​ 1,826 ​ Impairment of assets ​ 1,785 ​ 6,491 ​ Depreciation and amortization ​ 30,115 ​ 28,786 ​ Non-cash interest income from sales-type leases ​ ( 18,808 ) ​ ( 8,153 ) ​ Stock-based compensation expense ​ 20,299 ​ 21,014 ​ Amortization of discounts/premiums and deferred financing costs on debt obligations, net ​ 3,957 ​ 6,664 ​ Amortization of discounts/premiums and deferred interest on loans, net ​ ( 7,459 ) ​ ( 16,977 ) ​ Deferred interest on loans received ​ 23,703 ​ 8,633 ​ Earnings from equity method investments ​ ( 25,466 ) ​ ( 19,198 ) ​ Distributions from operations of other investments ​ 18,193 ​ 11,000 ​ Deferred operating lease income ​ ( 5,211 ) ​ ( 7,499 ) ​ Income from sales of real estate ​ ( 2,822 ) ​ ( 62 ) ​ Land development revenue in excess of cost of sales ​ ( 4,441 ) ​ ( 2,406 ) ​ Loss on early extinguishment of debt, net ​ — ​ 4,115 ​ Other operating activities, net ​ ( 2,148 ) ​ ( 9,008 ) ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ Origination and fundings of loans receivable held for sale ​ ​ ( 62,525 ) ​ ​ — ​ Changes in accrued interest and operating lease income receivable ​ 3,572 ​ ( 929 ) ​ Changes in deferred expenses and other assets, net ​ ( 1,637 ) ​ ( 1,692 ) ​ Changes in accounts payable, accrued expenses and other liabilities ​ ( 4,719 ) ​ ( 11,218 ) ​ Cash flows used in operating activities ​ ( 44,962 ) ​ ( 9,792 ) ​ Cash flows from investing activities: ​ ​ ​ Originations and fundings of loans receivable, net ​ ( 65,208 ) ​ ( 57,828 ) ​ Capital expenditures on real estate assets ​ ( 4,287 ) ​ ( 6,482 ) ​ Capital expenditures on land and development assets ​ ( 8,382 ) ​ ( 25,028 ) ​ Acquisitions of real estate, net investments in leases and land assets ​ ( 42,000 ) ​ — ​ Repayments of and principal collections on loans receivable and other lending investments, net ​ 209,779 ​ 87,552 ​ Net proceeds from sales of loans receivable ​ 79,560 ​ — ​ Net proceeds from sales of real estate ​ ​ 3,259 ​ ​ 9,090 ​ Net proceeds from sales of net investment in leases ​ 12,825 ​ — ​ Net proceeds from sales of land and development assets ​ 61,945 ​ 94,076 ​ Distributions from other investments ​ 22,996 ​ 11,606 ​ Contributions to and acquisition of interest in other investments ​ ( 91,419 ) ​ ( 141,091 ) ​ Other investing activities, net ​ 4,910 ​ ( 332 ) ​ Cash flows provided by (used in) investing activities ​ 183,978 ​ ( 28,437 ) ​ Cash flows from financing activities: ​ ​ ​ Borrowings from debt obligations ​ 25,000 ​ 310,572 ​ Repayments and repurchases of debt obligations ​ ( 35,900 ) ​ ( 421,363 ) ​ Preferred dividends paid ​ ( 11,748 ) ​ ( 11,748 ) ​ Common dividends paid ​ ( 17,304 ) ​ ( 16,148 ) ​ Repurchase of stock ​ ( 32,556 ) ​ ( 33,647 ) ​ Payments for debt prepayment or extinguishment costs ​ ​ — ​ ​ ( 3,316 ) ​ Payments for deferred financing costs ​ ( 75 ) ​ ( 2,501 ) ​ Payments for withholding taxes upon vesting of stock-based compensation ​ ( 2,181 ) ​ ( 1,984 ) ​ Contributions from noncontrolling interests ​ 64 ​ 317 ​ Distributions to noncontrolling interests ​ ( 6,401 ) ​ ( 7,172 ) ​ Cash flows used in financing activities ​ ( 81,101 ) ​ ( 186,990 ) ​ Effect of exchange rate changes on cash ​ ( 111 ) ​ ( 24 ) ​ Changes in cash, cash equivalents and restricted cash ​ 57,804 ​ ( 225,243 ) ​ Cash, cash equivalents and restricted cash at beginning of period ​ 150,566 ​ 352,206 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 208,370 ​ $ 126,963 ​ ​ ​ ​ ​ 7 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ ​ 2021 2020 ​ Supplemental disclosure of non-cash investing and financing activity: ​ ​ ​ Fundings and (repayments) of loan receivables and loan participations, net ​ $ ( 42,501 ) ​ $ 4,384 ​ Accounts payable for capital expenditures on land and development and real estate assets ​ ​ 930 ​ ​ 1,873 ​ Accrued repurchase of stock ​ ​ — ​ ​ 500 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 8 iStar Inc. Notes to Consolidated Financial Statements (unaudited) Table of Contents ​ Note 1—Business and Organization Business —iStar Inc. (the “Company”) finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. The Company also manages entities focused on ground lease and net lease investments (refer to Note 8). The Company has invested over $ 40 billion of capital over the past two decades and is structured as a real estate investment trust (“REIT”) with a diversified portfolio focused on larger assets located in major metropolitan markets. The Company’s primary reportable business segments are net lease, real estate finance, operating properties and land and development (refer to Note 18). Organization —The Company began its business in 1993 through the management of private investment funds and became publicly traded in 1998. Since that time, the Company has grown through the origination of new investments and corporate acquisitions. ​ Note 2—Basis of Presentation and Principles of Consolidation Basis of Presentation —The accompanying unaudited condensed 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 consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”). The preparation of 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 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. Certain prior year amounts have been reclassified in the Company’s consolidated financial statements and the related notes to conform to the current period presentation. Principles of Consolidation —The consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, controlled partnerships and VIEs for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The Company’s involvement with VIEs affects its financial performance and cash flows primarily through amounts recorded in “Operating lease income,” “Interest income,” “Earnings from equity method investments,” “Real estate expense” and “Interest expense” in the Company’s consolidated statements of operations. The Company has provided no financial support to those VIEs that it was not previously contractually required to provide. Consolidated VIEs —The Company consolidates VIEs for which it is considered the primary beneficiary. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE’s respective assets. The Company did not have any unfunded commitments related to consolidated VIEs as of June 30, 2021 and December 31, 9 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 2020. The following table presents the assets and liabilities of the Company’s consolidated VIEs as of June 30, 2021 and December 31, 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ As of ​ June 30, 2021 December 31, 2020 ASSETS ​ ​ ​ Real estate ​ ​ ​ Real estate, at cost ​ $ 900,365 ​ $ 899,110 Less: accumulated depreciation ​ ( 74,334 ) ​ ( 61,917 ) Real estate, net ​ 826,031 ​ 837,193 Land and development, net ​ 199,876 ​ 240,137 Other investments ​ 29 ​ 35 Cash and cash equivalents ​ 24,999 ​ 22,571 Accrued interest and operating lease income receivable, net ​ 1,295 ​ 1,472 Deferred operating lease income receivable, net ​ 34,119 ​ 29,428 Deferred expenses and other assets, net ​ 117,977 ​ 122,591 Total assets ​ $ 1,204,326 ​ $ 1,253,427 LIABILITIES ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 76,684 ​ $ 115,581 Debt obligations, net ​ 480,708 ​ 488,719 Total liabilities ​ 557,392 ​ 604,300 ​ Unconsolidated VIEs —The Company has investments in VIEs where it is not the primary beneficiary and accordingly the VIEs have not been consolidated in the Company’s consolidated financial statements. As of June 30, 2021, the Company’s maximum exposure to loss from these investments does not exceed the sum of the $ 130.1 million carrying value of the investments, which are classified in “Other investments” on the Company’s consolidated balance sheets, and $ 14.9 million of related unfunded commitments. ​ Note 3—Summary of Significant Accounting Policies The following paragraph describes the impact on the Company’s consolidated financial statements from the adoption of Accounting Standards Updates (“ASUs”) on January 1, 2021. The Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) on January 1, 2021 using the modified retrospective approach method. Under the modified retrospective approach, the Company recorded a cumulative effect adjustment on January 1, 2021 by increasing “Debt obligations, net” by $ 10.0 million, increasing retained earnings by $ 15.9 million and decreasing “Additional paid-in capital” by $ 25.9 million with respect to its 3.125 % senior convertible notes (refer to Note 11). Periods presented that are prior to the adoption date of January 1, 2021 will not be adjusted. In addition, upon the adoption of ASU 2020-06, the Company is required to use a modified if-converted method when calculating earnings per share. The Company will settle conversions of the 3.125 % senior convertible notes by paying the conversion value in cash up to the original principal amount of the notes being converted and shares of common stock to the extent of any conversion premium. The if-converted method is modified so that interest expense is not added back to the numerator, and the denominator only includes the net number of incremental shares that would be issued upon conversion. For the remainder of the Company’s significant accounting policies, refer to the Company’s Annual Report. 10 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents New Accounting Pronouncements — In March 2020, the Financial Accounting Standards Board issued ASU 2020-04, Reference Rate Reform (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In March 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. ​ Note 4—Real Estate The Company’s real estate assets were comprised of the following ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Operating ​ ​ ​ ​ Lease (1) ​ Properties ​ Total As of June 30, 2021 ​ ​ ​ Land, at cost ​ $ 188,418 ​ $ 6,830 ​ $ 195,248 Buildings and improvements, at cost ​ 1,355,014 ​ 106,911 ​ 1,461,925 Less: accumulated depreciation ​ ( 270,401 ) ​ ( 19,766 ) ​ ( 290,167 ) Real estate, net (1) ​ 1,273,031 ​ 93,975 ​ 1,367,006 Real estate available and held for sale (2) ​ — ​ 99,201 ​ 99,201 Total real estate ​ $ 1,273,031 ​ $ 193,176 ​ $ 1,466,207 As of December 31, 2020 ​ ​ ​ Land, at cost ​ $ 188,418 ​ $ 103,530 ​ $ 291,948 Buildings and improvements, at cost ​ 1,353,683 ​ 106,422 ​ 1,460,105 Less: accumulated depreciation ​ ( 250,198 ) ​ ( 17,574 ) ​ ( 267,772 ) Real estate, net (1) ​ 1,291,903 ​ 192,378 ​ 1,484,281 Real estate available and held for sale (2) ​ — ​ 5,212 ​ 5,212 Total real estate ​ $ 1,291,903 ​ $ 197,590 ​ $ 1,489,493 (1) As of June 30, 2021 and December 31, 2020, real estate, net included $ 746.1 million and $ 755.5 million, respectively, of real estate of the Net Lease Venture (refer to Net Lease Venture below). (2) As of June 30, 2021 and December 31, 2020, the Company had $ 2.4 million and $ 5.2 million, respectively, of residential condominiums available for sale in its operating properties portfolio. Net Lease Venture —In February 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the “Net Lease Venture”) and gave a right of first offer to the venture on all new net lease investments. The Company and its partner had joint decision making rights pertaining to the acquisition of new investments. Upon the expiration of the investment period on June 30, 2018, the Company obtained control of the venture through its unilateral rights of management and disposition of the assets. As a result, the expiration of the investment period resulted in a reconsideration event under GAAP and the Company determined that the Net Lease Venture is a VIE for which the Company is the primary beneficiary. Effective June 30, 2018, the Company consolidated the Net Lease Venture as an asset acquisition under ASC 810. The Net Lease Venture had previously been accounted for as an equity method investment. The Company has an equity interest in the Net Lease Venture of approximately 51.9 %. The Company is responsible for sourcing new opportunities and managing the venture and its assets in exchange for a management fee and incentive fee. Several of the Company’s senior executives whose time is substantially devoted to the Net Lease Venture own a total of 0.6 % equity ownership in the venture via co-investment. These senior executives are also entitled to an amount equal to 50 % of any incentive fee received based on the 47.5 % external partner’s interest. Dispositions— During the six months ended June 30, 2020, the Company sold a net lease asset for net proceeds of $ 7.5 million and recognized an impairment of $ 1.7 million in connection with the sale. 11 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Real Estate Available and Held for Sale— During the six months ended June 30, 2021, the Company transferred an operating property with a carrying value of $ 96.8 million to held for sale due to an executed contract with a third party. The operating property was sold in July 2021 for $ 125.0 million and the Company expects to recognize a gain of approximately $ 25.0 million after selling costs. Impairments— During the six months ended June 30, 2020, the Company recorded an impairment of $ 1.7 million in connection with the sale of a net lease asset and an impairment of $ 3.0 million on a real estate asset held for sale. Tenant Reimbursements— The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements were $ 5.1 million and $ 12.1 million for the three and six months ended June 30, 2021, respectively, and $ 5.4 million and $ 11.4 million for the three and six months ended June 30, 2020, respectively . These amounts are included in “Operating lease income” in the Company’s consolidated statements of operations. Allowance for Doubtful Accounts— As of June 30, 2021 and December 31, 2020, the allowance for doubtful accounts related to real estate tenant receivables was $ 0.7 million and $ 1.7 million, respectively. These amounts are included in “Accrued interest and operating lease income receivable, net” on the Company’s consolidated balance sheets. Future Minimum Operating Lease Payments —Future minimum operating lease payments to be collected under non-cancelable operating leases, excluding customer reimbursements of expenses, in effect as of June 30, 2021, are as follows by year ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Net Operating Year ​ Lease ​ Properties 2021 (remaining six months) ​ $ 67,653 ​ $ 3,163 2022 ​ 131,176 ​ 6,643 2023 ​ 122,817 ​ 6,383 2024 ​ 117,126 ​ 6,345 2025 ​ 120,582 ​ 5,682 Thereafter ​ 1,333,855 ​ 8,247 ​ ​ Note 5—Net Investment in Leases In June 2021, the Company acquired two parcels of land for $ 42.0 million each and simultaneously entered into two Ground Leases with the respective tenants. Each Ground Lease also provides for a leasehold improvement allowance up to a maximum of $ 83.0 million. The Company also concurrently entered into an agreement pursuant to which SAFE would acquire the Ground Leases from the Company. If certain construction conditions are not met within a specified time period, SAFE will have no obligation to acquire the Ground Leases or fund the leasehold improvement allowances. The Company classified one of the Ground Leases as a sales-type lease and it is recorded in “Net investment in leases” on the Company’s consolidated balance sheets. One Ground Lease was entered into with the seller of the land and did not qualify for sale leaseback accounting, and as such, is accounted for as a financing transaction and $ 42.2 million is recorded in “Loans receivable held for sale” on the Company’s consolidated balance sheet. There can be no assurance that the conditions to closing will be satisfied and that SAFE will acquire the properties and Ground Leases from the Company. In May 2019, the Company entered into a transaction with an operator of bowling entertainment venues, consisting of the purchase of nine bowling centers for $ 56.7 million, of which seven were acquired from the lessee for $ 44.1 million, and a commitment to invest up to $ 55.0 million in additional bowling centers over the next several years. The new centers were added to the Company’s existing master leases with the tenant. In connection with this transaction, the maturities of the master leases were extended by 15 years to 2047. In the second quarter 2020, the Company entered into a transaction with the lessee whereby it would apply $ 10 million of the net proceeds it received from certain sales of the lessee’s facilities to the lessee’s upcoming rent obligations to the Company. In exchange, the Company’s obligation under the lease to acquire an equal amount of new facilities for them or to reduce their rent in the future was terminated. In the third quarter 12 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 2020, the Company granted the lessee a nine-month rent deferral on its two wholly-owned master leases in exchange for eliminating the Company’s commitment to invest up to $ 55.0 million in additional bowling centers over the next several years. All deferred amounts are required to be repaid with interest beginning in January 2023. As a result of the May 2019 modifications to the leases, the Company classified the leases as sales-type leases and recorded $ 424.1 million in “Net investment in leases” on its consolidated balance sheet. As a result of the modifications in the second and third quarter 2020, the Company reassessed this classification as required by ASC 842, and concluded that the leases should continue to be classified as sales-type leases. In May 2019, the Company determined that the seven bowling centers acquired did not qualify as a sale leaseback transaction and recorded $ 44.1 million in “Loans receivable and other lending investments, net” on its consolidated balance sheet (refer to Note 7). For the three and six months ended June 30, 2021 , the Company recognized $ 0.2 million and $ 0.3 million, respectively, of cash interest income and $ 8.5 million and $ 17.0 million, respectively, of non-cash interest income in “Interest income from sales-type leases” in the Company’s consolidated statements of operations. For the three and six months ended June 30, 2020, the Company recognized $ 2.3 million and $ 9.2 million, respectively, of cash interest income and $ 6.0 million and $ 7.5 million, respectively, of non-cash interest income in "Interest income from sales-type leases" in the Company's consolidated statements of operations. Dispositions— During the six months ended June 30, 2021, the Company sold net lease assets for net proceeds of $ 6.6 million and recognized an aggregate impairment of $ 1.5 million in connection with the sales. The Company’s net investment in leases were comprised of the following as of June 30, 2021 and December 31, 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 December 31, 2020 Total undiscounted cash flows ​ $ 1,545,634 ​ $ 1,020,921 Unguaranteed estimated residual value ​ 378,016 ​ 345,284 Present value discount ​ ( 1,436,847 ) ​ ( 926,233 ) Allowance for losses on net investment in leases ​ ( 9,005 ) ​ ( 10,871 ) Net investment in leases (1) ​ $ 477,798 ​ $ 429,101 (1) As of June 30, 2021 and December 31, 2020, all of the Company’s net investment in leases were current in their payment status and performing in accordance with the terms of the respective leases. As of June 30, 2021, the weighted average risk rating on the Company’s net investment in leases was 1.9 . Future Minimum Lease Payments under Sales-type Leases —Future minimum lease payments to be collected under sales-type leases, excluding lease payments that are not fixed and determinable, in effect as of June 30, 2021, are as follows by year ($ in thousands): ​ ​ ​ ​ ​ Amount 2021 (remaining six months) ​ $ 14,249 2022 ​ 30,590 2023 ​ 43,272 2024 ​ 43,029 2025 ​ 31,955 Thereafter ​ 1,382,539 Total undiscounted cash flows ​ $ 1,545,634 ​ ​ 13 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Allowance for Losses on Net Investment in Leases —Changes in the Company’s allowance for losses on net investment in leases for the three and six months ended June 30, 2021 and 2020 were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ ​ June 30, 2021 ​ June 30, 2020 ​ June 30, 2021 ​ June 30, 2020 ​ Allowance for losses on net investment in leases at beginning of period $ 9,270 ​ $ 10,403 $ 10,871 ​ $ — Initial allowance recorded upon adoption of new accounting standard (1) ​ — ​ — ​ — ​ 9,111 ​ (Recovery of) provision for losses on net investment in leases (2) ​ ( 265 ) ​ 534 ​ ( 1,866 ) ​ 1,826 ​ Allowance for losses on net investment in leases at end of period ​ $ 9,005 ​ $ 10,937 ​ $ 9,005 ​ $ 10,937 ​ (1) The Company recorded an initial allowance for losses on net investment in leases of $ 9.1 million upon the adoption of ASU 2016-13 on January 1, 2020. (2) During the three and six months ended June 30, 2021, the Company recorded a recovery of losses on net investment in leases of $ 0.3 million and $ 1.9 million, respectively, due primarily to an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. During the three and six months ended June 30, 2020, the Company recorded an allowance for losses on net investment in leases of $ 0.5 million and $ 1.8 million, respectively, due primarily to the macroeconomic impact of COVID-19 on commercial real estate markets and the adoption of ASU 2016-13 . ​ Note 6—Land and Development The Company’s land and development assets were comprised of the following ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ June 30, ​ December 31, ​ ​ 2021 2020 ​ Land and land development, at cost ​ $ 392,703 ​ $ 441,201 ​ Less: accumulated depreciation ​ ( 10,984 ) ​ ( 10,538 ) ​ Total land and development, net ​ $ 381,719 ​ $ 430,663 ​ ​ Dispositions— During the six months ended June 30, 2021 and 2020, the Company sold land parcels and residential lots and units and recognized land development revenue of $ 64.6 million and $ 95.8 million, respectively. During the six months ended June 30, 2021 and 2020, the Company recognized land development cost of sales of $ 60.1 million and $ 93.3 million, respectively, from its land and development portfolio. ​ Impairments— During the six months ended June 30, 2020, the Company recorded an impairment of $ 1.5 million on a land and development asset. ​ ​ ​ 14 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 7—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 ​ ​ June 30, 2021 December 31, 2020 ​ Construction loans ​ ​ ​ ​ ​ ​ ​ Senior mortgages ​ $ 190,830 ​ $ 449,733 ​ Corporate/Partnership loans ​ 20,049 ​ 65,100 ​ Subtotal - gross carrying value of construction loans (1) ​ 210,879 ​ 514,833 ​ Loans ​ ​ ​ Senior mortgages ​ 50,463 ​ 35,922 ​ Corporate/Partnership loans ​ 18,674 ​ 20,567 ​ Subordinate mortgages ​ 12,042 ​ 11,640 ​ Subtotal - gross carrying value of loans ​ 81,179 ​ 68,129 ​ Other lending investments ​ ​ ​ Financing receivables (refer to Note 5) ​ 48,286 ​ 46,549 ​ Held-to-maturity debt securities ​ 93,677 ​ 90,715 ​ Available-for-sale debt securities ​ 28,074 ​ 25,274 ​ Subtotal - other lending investments ​ 170,037 ​ 162,538 ​ Total gross carrying value of loans receivable and other lending investments ​ 462,095 ​ 745,500 ​ Allowance for loan losses ​ ( 7,135 ) ​ ( 13,170 ) ​ Total loans receivable and other lending investments, net ​ $ 454,960 ​ $ 732,330 ​ (1) As of June 30, 2021, 91 % of gross carrying value of construction loans had completed construction. Allowance for Loan Losses —Changes in the Company’s allowance for loan losses were as follows for the three months ended June 30, 2021 and 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General Allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ Maturity Debt ​ Financing ​ Specific ​ ​ ​ Three Months Ended June 30, 2021 ​ Loans ​ Loans ​ Securities ​ Receivables ​ Allowance ​ Total Allowance for loan losses at beginning of period ​ $ 2,893 ​ $ 1,815 ​ $ 2,685 ​ $ 998 ​ $ 667 ​ $ 9,058 Recovery of loan losses (1) ​ ( 1,253 ) ​ ( 196 ) ​ ( 292 ) ​ ( 105 ) ​ ( 77 ) ​ ( 1,923 ) Allowance for loan losses at end of period ​ $ 1,640 ​ $ 1,619 ​ $ 2,393 ​ $ 893 ​ $ 590 ​ $ 7,135 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses at beginning of period ​ $ 9,724 ​ $ 686 ​ $ 53 ​ $ 1,100 ​ $ 21,701 ​ $ 33,264 Provision for loan losses (1) ​ 2,012 ​ 219 ​ 58 ​ 59 ​ — ​ 2,348 Allowance for loan losses at end of period ​ $ 11,736 ​ $ 905 ​ $ 111 ​ $ 1,159 ​ $ 21,701 ​ $ 35,612 (1) During the three months ended June 30, 2021 and 2020, the Company recorded a provision for (recovery of) loan losses of ($ 2.3 ) million and $ 2.1 million, respectively, in its consolidated statement of operations. The recovery in 2021 was due primarily to the repayment of loans during the three months ended June 30, 2021 and an improving macroeconomic forecast on commercial real estate markets since March 31, 2021. Of this amount, $ 0.4 million related to a provision for loan losses for unfunded loan commitments and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities." The provision in 2020 was due to the macroeconomic impact of COVID-19 on commercial real estate markets, which was partially offset by a $ 0.3 million reduction in provision for loan losses for unfunded loan commitments that were funded during the three months ended June 30, 2020, and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities." 15 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Changes in the Company’s allowance for loan losses were as follows for the six months ended June 30, 2021 and 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General Allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ Maturity Debt ​ Financing ​ Specific ​ ​ ​ Six Months Ended June 30, 2021 ​ Loans ​ Loans ​ Securities ​ Receivables ​ Allowance ​ Total Allowance for loan losses at beginning of period ​ $ 6,541 ​ $ 1,643 ​ $ 3,093 ​ $ 1,150 ​ $ 743 ​ $ 13,170 Recovery of loan losses (1) ​ ( 4,901 ) ​ ( 24 ) ​ ( 700 ) ​ ( 257 ) ​ ( 153 ) ​ ( 6,035 ) Allowance for loan losses at end of period ​ $ 1,640 ​ $ 1,619 ​ $ 2,393 ​ $ 893 ​ $ 590 ​ $ 7,135 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses at beginning of period ​ $ 6,668 ​ $ 265 ​ $ — ​ $ — ​ $ 21,701 ​ $ 28,634 Adoption of new accounting standard (2) ​ ( 353 ) ​ 98 ​ 20 ​ 964 ​ — ​ 729 Provision for loan losses (1) ​ 5,421 ​ 542 ​ 91 ​ 195 ​ — ​ 6,249 Allowance for loan losses at end of period ​ $ 11,736 ​ $ 905 ​ $ 111 ​ $ 1,159 ​ $ 21,701 ​ $ 35,612 (1) During the six months ended June 30, 2021 and 2020, the Company recorded a provision for (recovery of) loan losses of ($ 6.1 ) million and $ 6.1 million, respectively, in its consolidated statements of operations. The recovery in 2021 was due primarily to the repayment of loans during the six months ended June 30, 2021 and an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. The provision for loan losses in 2020 resulted from the macroeconomic impact of COVID-19 on commercial real estate markets and was partially offset by a $ 0.2 million reduction in provision for loan losses for unfunded loan commitments that were funded during the six months ended June 30, 2020 and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities." (2) On January 1, 2020, the Company recorded an increase to its allowance for loan losses of $ 3.3 million upon the adoption of ASU 2016-13, of which $ 2.5 million related to expected credit losses for unfunded loan commitments and was recorded in “Accounts payable, accrued expenses and other liabilities.” ​ ​ 16 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows as of June 30, 2021 and December 31, 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually Collectively ​ ​ ​ ​ Evaluated for ​ Evaluated for ​ ​ ​ ​ ​ Impairment (1) ​ Impairment ​ Total As of June 30, 2021 ​ ​ ​ Construction loans (2) ​ $ 56,610 ​ $ 154,269 ​ $ 210,879 Loans (2) ​ — ​ 81,179 ​ 81,179 Financing receivables ​ — ​ 48,286 ​ 48,286 Held-to-maturity debt securities ​ — ​ 93,677 ​ 93,677 Available-for-sale debt securities (3) ​ — ​ 28,074 ​ 28,074 Less: Allowance for loan losses ​ ( 590 ) ​ ( 6,545 ) ​ ( 7,135 ) Total ​ $ 56,020 ​ $ 398,940 ​ $ 454,960 As of December 31, 2020 ​ ​ ​ Construction loans (2) ​ $ 53,305 ​ $ 461,528 ​ $ 514,833 Loans (2) ​ — ​ 68,129 ​ 68,129 Financing receivables ​ — ​ 46,549 ​ 46,549 Held-to-maturity debt securities ​ — ​ 90,715 ​ 90,715 Available-for-sale debt securities (3) ​ — ​ 25,274 ​ 25,274 Less: Allowance for loan losses ​ ( 743 ) ​ ( 12,427 ) ​ ( 13,170 ) Total ​ $ 52,562 ​ $ 679,768 ​ $ 732,330 (1) The carrying value of this loan includes an unamortized discount of $ 0.8 million and $ 0.8 million as of June 30, 2021 and December 31, 2020, respectively. 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) The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $ 1.7 million and $ 2.3 million as of June 30, 2021 and December 31, 2020, respectively. (3) Available-for-sale debt securities are evaluated for impairment under ASC 326-30. Credit Characteristics —As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain, and there can be no assurance that actual performance will be similar to current expectation. The Company designates loans as non-performing at such time as: (1) interest payments become 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt. 17 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The Company’s amortized cost basis in performing senior mortgages, corporate/partnership loans, subordinate mortgages and financing receivables, presented by year of origination and by credit quality, as indicated by risk rating, as of June 30, 2021 were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year of Origination ​ ​ 2021 2020 2019 2018 2017 Prior to 2017 Total Senior mortgages ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ 34,394 ​ — ​ — ​ 118,045 ​ — ​ 3,500 ​ 155,939 3.5 ​ — ​ — ​ — ​ 28,744 ​ — ​ — ​ 28,744 4.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal (1) ​ $ 34,394 ​ $ — ​ $ — ​ $ 146,789 ​ $ — ​ $ 3,500 ​ $ 184,683 Corporate/partnership loans ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ — ​ 13,115 ​ — ​ — ​ 13,115 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ 6,934 ​ — ​ — ​ — ​ — ​ — ​ 6,934 3.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.0 ​ — ​ — ​ — ​ 18,674 ​ — ​ — ​ 18,674 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal ​ $ 6,934 ​ $ — ​ $ — ​ $ 31,789 ​ $ — ​ $ — ​ $ 38,723 Subordinate mortgages ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ — ​ — ​ — ​ — ​ — ​ 12,042 ​ 12,042 3.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 12,042 ​ $ 12,042 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing receivables ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ 48,286 ​ — ​ — ​ — ​ 48,286 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal ​ $ — ​ $ — ​ $ 48,286 ​ $ — ​ $ — ​ $ — ​ $ 48,286 Total ​ $ 41,328 ​ $ — ​ $ 48,286 ​ $ 178,578 ​ $ — ​ $ 15,542 ​ $ 283,734 (1) As of June 30, 2021, excludes $ 56.6 million for one loan on non-accrual status. 18 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less Than Greater ​ ​ ​ ​ ​ ​ ​ ​ ​ and Equal ​ Than ​ Total ​ ​ ​ ​ ​ Current ​ to 90 Days ​ 90 Days ​ Past Due ​ Total As of June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior mortgages ​ $ 184,683 ​ $ 56,610 ​ $ — ​ ​ 56,610 ​ $ 241,293 Corporate/Partnership loans ​ 38,723 ​ — ​ — ​ — ​ 38,723 Subordinate mortgages ​ 12,042 ​ — ​ — ​ — ​ 12,042 Total ​ $ 235,448 ​ $ 56,610 ​ $ — ​ $ 56,610 ​ $ 292,058 As of December 31, 2020 ​ ​ ​ ​ ​ Senior mortgages ​ $ 443,154 ​ $ 42,501 ​ $ — ​ $ 42,501 ​ $ 485,655 Corporate/Partnership loans ​ 42,721 ​ 42,946 ​ — ​ 42,946 ​ 85,667 Subordinate mortgages ​ 11,640 ​ — ​ — ​ — ​ 11,640 Total ​ $ 497,515 ​ $ 85,447 ​ $ — ​ $ 85,447 ​ $ 582,962 ​ Impaired Loans —The Company’s impaired loan was as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 As of December 31, 2020 ​ ​ ​ Unpaid ​ ​ ​ ​ Unpaid ​ ​ ​ ​ Amortized ​ Principal ​ Related ​ Amortized ​ Principal ​ Related ​ ​ Cost ​ Balance ​ Allowance ​ Cost ​ Balance ​ Allowance With an allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ Senior mortgages (1) ​ $ 56,610 ​ $ 55,859 ​ $ ( 590 ) ​ $ 53,305 ​ $ 52,552 ​ $ ( 743 ) Total ​ $ 56,610 ​ $ 55,859 ​ $ ( 590 ) ​ $ 53,305 ​ $ 52,552 ​ $ ( 743 ) (1) The Company has one non-accrual loan as of June 30, 2021 and December 31, 2020 that is considered impaired and included in the table above. The Company did no t record any interest income on impaired loans for the six months ended June 30, 2021 and 2020. Loans receivable held for sale —In March 2021, the Company acquired land and simultaneously structured and entered into with the seller a Ground Lease on which a multi-family project will be constructed. The Company funded $ 16.1 million at closing and the Ground Lease documents provide for future funding obligations of approximately $ 11.9 million of deferred purchase price and $ 52.0 million of leasehold improvement allowance upon achievement of certain milestones. At closing, the Company entered into an agreement with SAFE pursuant to which, subject to certain conditions being met, SAFE will acquire the ground lessor from the Company. The Company determined that the transaction did not qualify as a sale leaseback transaction and recorded the Ground Lease in “Loans receivable held for sale” on the Company’s consolidated balance sheet as of June 30, 2021. The Company received $ 2.7 million of consideration from SAFE in connection with this transaction. In June 2021, the Company acquired a parcel of land for $ 42.0 million and simultaneously entered into a Ground Lease (refer to Note 5). The Company also concurrently entered into an agreement pursuant to which SAFE would acquire the Ground Lease from the Company. The Ground Lease was entered into with the seller of the land and did not qualify for sale leaseback accounting, and as such, is accounted for as a financing transaction and $ 42.2 million is recorded in “Loans receivable held for sale” on the Company’s consolidated balance sheets. 19 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Other lending investments —Other lending investments includes the following securities ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ Net ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Estimated ​ Carrying ​ ​ Face Value ​ Cost Basis ​ Gain ​ Fair Value ​ Value As of June 30, 2021 ​ ​ ​ ​ ​ Available-for-Sale Securities ​ ​ ​ ​ ​ Municipal debt securities ​ $ 23,855 ​ $ 23,855 ​ $ 4,219 ​ $ 28,074 ​ $ 28,074 Held-to-Maturity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt securities ​ 100,000 ​ 93,677 ​ — ​ 93,677 ​ 93,677 Total ​ $ 123,855 ​ $ 117,532 ​ $ 4,219 ​ $ 121,751 ​ $ 121,751 As of December 31, 2020 ​ ​ ​ ​ ​ Available-for-Sale Securities ​ ​ ​ ​ ​ Municipal debt securities ​ $ 20,680 ​ $ 20,680 ​ $ 4,594 ​ $ 25,274 ​ $ 25,274 Held-to-Maturity Securities ​ ​ ​ ​ ​ ​ ​ ​ Debt securities ​ 100,000 ​ 90,715 ​ — ​ 90,715 ​ 90,715 Total ​ $ 120,680 ​ $ 111,395 ​ $ 4,594 ​ $ 115,989 ​ $ 115,989 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021, the contractual maturities of the Company’s securities were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-Maturity Debt Securities Available-for-Sale Debt Securities ​ ​ Amortized ​ Estimated ​ Amortized ​ Estimated ​ ​ Cost Basis Fair Value Cost Basis Fair Value Maturities ​ ​ ​ ​ Within one year ​ $ — ​ $ — ​ $ — ​ $ — After one year through 5 years ​ 93,677 ​ 93,677 ​ — ​ — After 5 years through 10 years ​ — ​ — ​ — ​ — After 10 years ​ — ​ — ​ 23,855 ​ 28,074 Total ​ $ 93,677 ​ $ 93,677 ​ $ 23,855 ​ $ 28,074 ​ ​ ​ 20 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 8—Other Investments The Company’s other investments and its proportionate share of earnings (losses) from equity method investments were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (Losses) from ​ Earnings (Losses) from ​ ​ Carrying Value ​ Equity Method Investments (1) ​ Equity Method Investments (1) ​ ​ as of ​ For the Three Months Ended ​ For the Six Months Ended ​ ​ June 30, ​ December 31, ​ June 30, ​ June 30, ​ ​ 2021 2020 2021 2020 2021 2020 Real estate equity investments ​ ​ ​ ​ ​ ​ ​ ​ ​ Safehold Inc. ("SAFE") (2) ​ $ 988,687 ​ $ 937,712 ​ $ 9,703 ​ $ 8,236 ​ $ 21,115 ​ $ 27,574 iStar Net Lease II LLC ("Net Lease Venture II") ​ 84,735 ​ 78,998 ​ 1,599 ​ 564 ​ 2,600 ​ 757 Other real estate equity investments ​ 68,920 ​ 89,939 ​ ( 1,461 ) ​ ( 4,893 ) ​ ( 2,063 ) ​ ( 6,975 ) Subtotal ​ 1,142,342 ​ 1,106,649 ​ 9,841 ​ 3,907 ​ 21,652 ​ 21,356 Other strategic investments (3) ​ 133,612 ​ 69,911 ​ 2,856 ​ ( 1,321 ) ​ 3,814 ​ ( 2,158 ) Total ​ $ 1,275,954 ​ $ 1,176,560 ​ $ 12,697 ​ $ 2,586 ​ $ 25,466 ​ $ 19,198 (1) For the three months ended June 30, 2021 and 2020, earnings (losses) from equity method investments is net of the Company’s pro rata share of $ 5.5 million and $ 4.8 million, respectively, of depreciation expense and $ 17.7 million and $ 15.7 million, respectively, of interest expense. For the six months ended June 30, 2021 and 2020, earnings (losses) from equity method investments is net of the Company’s pro rata share of $ 11.1 million and $ 8.8 million, respectively, of depreciation expense and $ 33.2 million and $ 29.4 million, respectively, of interest expense. (2) As of June 30, 2021, the Company owned 35.2 million shares of SAFE common stock which, based on the closing price of $ 78.50 on June 30, 2021, had a market value of $ 2.8 billion. For the six months ended June 30, 2021 and 2020, equity in earnings includes dilution gains of $ 0.5 million and $ 7.9 million, respectively, resulting from SAFE equity offerings. (3) During the six months ended June 30, 2021 and 2020, the Company identified observable price changes in an equity security held by the Company as evidenced by orderly private issuances of similar securities by the same issuer. In accordance with ASC 321, the Company remeasured its equity investment at fair value and recognized aggregate mark-to-market gains for the six months ended June 30, 2021 and 2020 of $ 5.1 million and $ 9.9 million, respectively, in “Other income” in the Company’s consolidated statements of operations. Safehold Inc. —Safehold Inc. (“SAFE”) is a publicly-traded company formed by the Company primarily to acquire, own, manage, finance and capitalize ground leases. Ground leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon (“Ground Leases”). As of June 30, 2021, the Company owned approximately 66.0 % of SAFE’s common stock outstanding. In January 2019, the Company purchased 12.5 million newly designated limited partnership units (the “Investor Units”) in SAFE’s operating partnership (“SAFE OP”), at a purchase price of $ 20.00 per unit, for a total purchase price of $ 250.0 million. In May 2019, after the approval of SAFE’s stockholders, the Investor Units were exchanged for shares of SAFE’s common stock on a one -for-one basis. Following the exchange, the Investor Units were retired. In connection with the Company’s purchase of the Investor Units, it entered into a Stockholder’s Agreement with SAFE on January 2, 2019. The Stockholder’s Agreement: ● limits the Company’s discretionary voting power to 41.9 % of the outstanding voting power of SAFE’s common stock until its aggregate ownership of SAFE common stock is less than 41.9 % ; ● requires the Company to cast all of its voting power in favor of three director nominees to SAFE’s board who are independent of each of the Company and SAFE for three years ; ● subjects the Company to certain standstill provisions; and ● provides the Company certain preemptive rights. 21 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents In March 2020, the Company acquired 1.7 million shares of SAFE’s common stock in a private placement for $ 80.0 million. A wholly-owned subsidiary of the Company is the external manager of SAFE and is entitled to a management fee. In addition, the Company is also the external manager of a venture in which SAFE is a member. Following are the key terms of the management agreement with SAFE: ● The Company receives a fee equal to 1.0 % of total SAFE equity (as defined in the management agreement) up to $ 1.5 billion; 1.25 % of total SAFE equity (for incremental equity of $ 1.5 billion - $ 3.0 billion); 1.375 % of total SAFE equity (for incremental equity of $ 3.0 billion - $ 5.0 billion); and 1.5 % of total SAFE equity (for incremental equity over $ 5.0 billion); ● Fee to be paid in cash or in shares of SAFE common stock, at the discretion of SAFE’s independent directors; ● The stock is locked up for two years , subject to certain restrictions; ● There is no additional performance or incentive fee; ● The management agreement is non-terminable by SAFE through June 30, 2023, except for cause; and ● Automatic annual renewals thereafter, subject to non-renewal upon certain findings by SAFE’s independent directors and payment of termination fee equal to three times the prior year’s management fee. During the three months ended June 30, 2021 and 2020, the Company recorded $ 3.5 million and $ 3.2 million, respectively, of management fees pursuant to its management agreement with SAFE. During the six months ended June 30, 2021 and 2020, the Company recorded $ 7.0 million and $ 6.0 million, respectively, of management fees pursuant to its management agreement with SAFE. The Company is also entitled to receive certain expense reimbursements, including for the allocable costs of its personnel that perform certain legal, accounting, due diligence tasks and other services that third-party professionals or outside consultants otherwise would perform. The Company has elected not to charge in full certain of the expense reimbursements while SAFE is growing its portfolio. During the three months ended June 30, 2021 and 2020, the Company recognized $ 1.9 million and $ 1.3 million, respectively, of expense reimbursements pursuant to its management agreement with SAFE. During the six months ended June 30, 2021 and 2020, the Company recognized $ 3.8 million and $ 2.5 million, respectively, of expense reimbursements pursuant to its management agreement with SAFE. The Company has an exclusivity agreement with SAFE pursuant to which it agreed, subject to certain exceptions, that it will not acquire, originate, invest in, or provide financing for a third party’s acquisition of, a Ground Lease unless it has first offered that opportunity to SAFE and a majority of its independent directors has declined the opportunity. Following is a list of investments that the Company has transacted with SAFE, all of which were approved by the Company’s and SAFE’s independent directors, for the periods presented: In October 2017, the Company closed on a 99-year Ground Lease and a $ 80.5 million construction financing commitment to support the ground-up development of a to-be-built luxury multi-family project. The transaction included a combination of: (i) a newly created Ground Lease and a $ 7.2 million leasehold improvement allowance, which was fully funded; and (ii) an $ 80.5 million leasehold first mortgage. During the three months ended June 30, 2020, the Company recorded $ 0.8 million of interest income on the loan. During the six months ended June 30, 2021 and 2020, the Company recorded $ 0.3 million and $ 1.5 million, respectively, of interest income on the loan. The Company sold the Ground Lease to SAFE in September 2020 for $ 34.0 million and sold the leasehold first mortgage to an entity in which the Company has a 53 % equity interest (refer to “Other strategic investments” below) in January 2021 for $ 63.3 million. 22 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents In January 2019, the Company committed to provide a $ 13.3 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan was for the conversion of an office building into a multi-family property. The loan was repaid during the fourth quarter 2020. During the three and six months ended June 30, 2020, the Company recorded $ 0.3 million and $ 0.5 million, respectively, of interest income on the loan. In June 2020, Net Lease Venture II (see below) acquired the leasehold interest in an office laboratory property in Honolulu, HI and simultaneously entered into a 99-year Ground Lease with SAFE. In February 2021, the Company provided a $ 50.0 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan was for the Ground Lease tenant’s recapitalization of a hotel property. The Company received $ 1.9 million of consideration from SAFE in connection with this transaction. As of June 30, 2021, $ 42.7 million of the loan was funded and during the three and six months ended June 30, 2021, the Company recorded $ 1.5 million and $ 2.4 million, respectively, of interest income on the loan. In March 2021, the Company acquired land and simultaneously structured and entered into with the seller a Ground Lease on which a multi-family project will be constructed. At closing, the Company entered into an agreement with SAFE pursuant to which, subject to certain conditions being met, SAFE will acquire the ground lessor from the Company (refer to Note 7 - Loans receivable held for sale). The Company also committed to provide a $ 75.0 million construction loan to the Ground Lease tenant. In June 2021, the Company sold to SAFE its rights under a purchase option agreement for $ 1.2 million. The Company had previously acquired such purchase option agreement from a third-party property owner for $ 1.0 million and incurred $ 0.2 million of expenses. Under the option agreement, upon certain conditions being met by an outside developer who may become the Ground Lease tenant, SAFE has the right to acquire for $ 215.0 million a property and hold a Ground Lease under approximately 1.1 million square feet of office space that may be developed on the property. No gain or loss was recognized by the Company as a result of the sale. In June 2021, the Company and SAFE entered into two agreements pursuant to each of which SAFE would acquire land and a related Ground Lease originated by the Company when certain construction related conditions are met by a specified time period. The purchase price to be paid for each is $ 42.0 million, plus an amount necessary for the Company to achieve the greater of a 1.25 x multiple and a 9 % return on its investment. In addition, each Ground Lease provides for a leasehold improvement allowance up to a maximum of $ 83.0 million, which obligation would be assumed by SAFE upon acquisition. If certain construction conditions are not met within a specified time period, SAFE will have no obligation to acquire the Ground Leases or fund the leasehold improvement allowances. There can be no assurance that the conditions to closing will be satisfied and that SAFE will acquire the properties and Ground Leases from the Company. 23 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Net Lease Venture II —In July 2018, the Company entered into a new venture (“Net Lease Venture II”) with an investment strategy similar to the Net Lease Venture. The Net Lease Venture II has a right of first offer on all new net lease investments (excluding Ground Leases) originated by the Company. In June 2021, Net Lease Venture II’s investment period was extended to December 31, 2021. Net Lease Venture II is a voting interest entity and the Company has an equity interest in the venture of approximately 51.9 %. The Company does not have a controlling interest in Net Lease Venture II due to the substantive participating rights of its partner. The Company accounts for its investment in Net Lease Venture II as an equity method investment and is responsible for managing the venture in exchange for a management fee and incentive fee. During the three months ended June 30, 2021 and 2020, the Company recorded $ 0.4 million and $ 0.4 million, respectively, of management fees from Net Lease Venture II. During the six months ended June 30, 2021 and 2020, the Company recorded $ 0.8 million and $ 0.8 million, respectively, of management fees from Net Lease Venture II. Other real estate equity investments —As of June 30, 2021, the Company’s other real estate equity investments include equity interests in real estate ventures ranging from 33 % to 95 %, comprised of investments of $ 55.3 million in operating properties and $ 13.6 million in land assets. As of December 31, 2020, the Company’s other real estate equity investments included $ 58.7 million in operating properties and $ 31.2 million in land assets. In August 2018, the Company provided a mezzanine loan with a principal balance of $ 33.0 million as of June 30, 2021 and December 31, 2020 to an unconsolidated entity in which the Company owns a 50 % equity interest. The loan matures in August 2022. As of June 30, 2021, and December 31, 2020, the loan is included in “Loans receivable and other lending investments, net” on the Company’s consolidated balance sheet. During the three months ended June 30, 2021 and 2020, the Company recorded $ 0.6 million and $ 0.6 million, respectively, of interest income on the mezzanine loan. During the six months ended June 30, 2021 and 2020, the Company recorded $ 1.1 million and $ 1.2 million, respectively, of interest income on the mezzanine loan. Other strategic investments —As of June 30, 2021 and December 31, 2020, the Company also had investments in real estate related funds and other strategic investments in real estate entities. In January 2021, the Company sold two loans for $ 83.4 million to a newly formed entity in which the Company has a 53.0 % noncontrolling equity interest. The Company did no t recognize any gain or loss on the sales. The Company does not have a controlling interest in this entity due to the substantive participating rights of its partner. The Company accounts for this investment as an equity method investment and receives a fixed annual fee in exchange for managing the entity. Summarized investee financial information — The following table presents the investee level summarized financial information for the Company’s equity method investment that was significant as of June 30, 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues Expenses Net Income Attributable to Parent For the Six Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ SAFE ​ $ 87,720 ​ $ 57,536 ​ $ 31,640 ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ SAFE ​ $ 77,518 ​ $ 49,200 ​ $ 29,861 ​ ​ 24 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 9—Other Assets and Other Liabilities Deferred expenses and other assets, net, consist of the following items ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ June 30, 2021 December 31, 2020 ​ Intangible assets, net (1) ​ $ 149,620 ​ $ 156,041 ​ Restricted cash ​ 53,429 ​ 51,933 ​ Operating lease right-of-use assets (2) ​ 45,894 ​ 48,891 ​ Other assets (3) ​ 20,720 ​ 19,453 ​ Other receivables ​ 4,696 ​ 10,881 ​ Leasing costs, net (4) ​ 2,631 ​ 2,340 ​ Corporate furniture, fixtures and equipment, net (5) ​ 1,852 ​ 2,024 ​ Deferred financing fees, net ​ 1,052 ​ 1,549 ​ Deferred expenses and other assets, net ​ $ 279,894 ​ $ 293,112 ​ (1) Intangible assets, net includes above market and in-place lease assets and lease incentives related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was $ 50.6 million and $ 44.4 million as of June 30, 2021 and December 31, 2020, respectively. The amortization of above market leases and lease incentive assets decreased operating lease income in the Company’s consolidated statements of operations by $ 0.3 million and $ 0.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 0.7 million and $ 0.7 million for the six months ended June 30, 2021 and 2020, respectively. These intangible lease assets are amortized over the remaining term of the lease. The amortization expense for in-place leases was $ 2.6 million and $ 2.6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 5.8 million and $ 5.3 million for the six months ended June 30, 2021 and 2020, respectively. These amounts are included in “Depreciation and amortization” in the Company’s consolidated statements of operations. As of June 30, 2021, the weighted average remaining amortization period for the Company’s intangible assets was approximately 16.4 years. (2) Right-of-use lease assets relate primarily to the Company’s leases of office space. 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 “General and administrative” and “Real estate expense” in the Company’s consolidated statements of operations. During the three months ended June 30, 2021 and 2020, the Company recognized $ 1.2 million and $ 1.2 million, respectively, in "General and administrative" and $ 0.9 million and $ 0.9 million, respectively, in "Real estate expense" in its consolidated statement of operations relating to operating leases. During the six months ended June 30, 2021 and 2020, the Company recognized $ 2.5 million and $ 2.2 million, respectively, in "General and administrative" and $ 1.8 million and $ 1.7 million, respectively, in "Real estate expense" in its consolidated statement of operations relating to operating leases. (3) Other assets primarily includes prepaid expenses, deposits for certain real estate assets and management fees and expense reimbursements due from SAFE (refer to Note 8). (4) Accumulated amortization of leasing costs was $ 2.2 million and $ 2.6 million as of June 30, 2021 and December 31, 2020, respectively. (5) Accumulated depreciation on corporate furniture, fixtures and equipment was $ 14.6 million and $ 14.3 million as of June 30, 2021 and December 31, 2020, respectively. Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ June 30, 2021 December 31, 2020 ​ Other liabilities (1) ​ $ 81,056 ​ ​ 91,513 ​ Accrued expenses ​ 104,716 ​ 94,724 ​ Intangible liabilities, net (2) ​ 47,492 ​ 48,738 ​ Operating lease liabilities (see table above) ​ 48,645 ​ 50,072 ​ Accrued interest payable ​ 33,428 ​ 32,355 ​ Accounts payable, accrued expenses and other liabilities ​ $ 315,337 ​ $ 317,402 ​ (1) As of June 30, 2021 and December 31, 2020, other liabilities includes $ 33.0 million and $ 36.9 million, respectively, of deferred income. As of June 30, 2021 and December 31, 2020, other liabilities includes $ 13.5 million and $ 19.0 million, respectively, of derivative liabilities. As of June 30, 2021 and December 31, 2020, other liabilities includes $ 1.0 million and $ 1.0 million, respectively, of expected credit losses for unfunded loan commitments. (2) Intangible liabilities, net includes below market lease liabilities related to the acquisition of real estate assets. Accumulated amortization on below market lease liabilities was $ 8.8 million and $ 7.5 million as of June 30, 2021 and December 31, 2020, respectively. The amortization of below market leases increased operating lease income in the Company's consolidated statements of operations by $ 0.6 million and $ 0.6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 1.2 million and $ 1.2 million for the six months ended June 30, 2021 and 2020, respectively. ​ ​ 25 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 10—Loan Participations Payable, net The Company had one loan participation payable with a carrying value of $ 42.5 million and an interest rate of 6.0 % as of December 31, 2020. The loan was repaid in the first quarter 2021. Loan participations represent transfers of financial assets that did not meet the sales criteria established under ASC Topic 860 and are accounted for as loan participations payable, net as of December 31, 2020. As of December 31, 2020, the corresponding loan receivable balance was $ 42.5 million and is included in “Loans receivable and other lending investments, net” on the Company’s consolidated balance sheets. The principal and interest due on loan participations payable are paid from cash flows of the corresponding loans receivable, which serve as collateral for the participations. ​ ​ ​ 26 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 11—Debt Obligations, net The Company’s debt obligations were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Value as of ​ Stated ​ Scheduled ​ June 30, 2021 December 31, 2020 Interest Rates Maturity Date Secured credit facilities and mortgages: ​ ​ ​ Revolving Credit Facility ​ $ — ​ $ — ​ LIBOR + 2.00 % (1) September 2022 Senior Term Loan ​ 491,875 ​ 491,875 ​ LIBOR + 2.75 % (2) June 2023 Mortgages collateralized by net lease assets ​ 710,175 ​ 721,075 ​ 1.65 % - 7.26 % (3) ​ Total secured credit facilities and mortgages (4) ​ 1,202,050 ​ 1,212,950 ​ Unsecured notes: ​ ​ ​ 3.125 % senior convertible notes (5) ​ 287,500 ​ 287,500 ​ 3.125 % September 2022 4.75 % senior notes (6) ​ 775,000 ​ 775,000 ​ 4.75 % October 2024 4.25 % senior notes (7) ​ 550,000 ​ 550,000 ​ 4.25 % August 2025 5.50 % senior notes (8) ​ 400,000 ​ 400,000 ​ 5.50 % February 2026 Total unsecured notes ​ 2,012,500 ​ 2,012,500 ​ Other debt obligations: ​ ​ ​ Trust preferred securities ​ 100,000 ​ 100,000 ​ LIBOR + 1.50 % October 2035 Total debt obligations ​ 3,314,550 ​ 3,325,450 ​ Debt discounts and deferred financing costs, net (9) ​ ( 25,069 ) ​ ( 38,475 ) ​ Total debt obligations, net (10) ​ $ 3,289,481 ​ $ 3,286,975 ​ (1) The Revolving Credit Facility bears interest at the Company’s election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.50 % or (c) LIBOR plus 1.0 % and subject to a margin ranging from 1.00 % to 1.50 % ; or (ii) LIBOR subject to a margin ranging from 2.00 % to 2.50 % . At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2023. (2) The loan bears interest at the Company’s election of either: (i) a base rate, which is the greater of (a) prime, (b) federal funds plus 0.50 % or (c) LIBOR plus 1.0 % and subject to a margin of 1.75 % ; or (ii) LIBOR subject to a margin of 2.75 % . (3) As of June 30, 2021, the weighted average interest rate of these loans is 4.4 % , inclusive of the effect of interest rate swaps. (4) As of June 30, 2021, $ 2.0 billion net carrying value of assets served as collateral for the Company’s secured debt obligations. (5) The Company’s 3.125 % senior convertible fixed rate notes due September 2022 (“ 3.125 % Convertible Notes”) are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding September 15, 2022. The conversion rate as of June 30, 2021 was 71.2325 shares per $1,000 principal amount of 3.125 % Convertible Notes, which equals a conversion price of $ 14.04 per share. The conversion rate is subject to adjustment from time to time for specified events. Upon conversion, the Company will pay or deliver, as the case may be, a combination of cash and shares of its common stock. As of December 31, 2020, the carrying value of the 3.125 % Convertible Notes was $ 275.1 million, net of fees, and the unamortized discount of the 3.125 % Convertible Notes was $ 10.2 million, net of fees. Upon the adoption of ASU 2020-06 on January 1, 2021, the Company reclassed the unamortized discount to shareholders equity (refer to Note 3). During the three months ended June 30, 2021 and 2020, the Company recognized $ 2.2 million and $ 2.2 million, respectively, of contractual interest and during the three months ended June 30, 2020, the Company recognized $ 1.3 million of discount amortization on the 3.125 % Convertible Notes. During the six months ended June 30, 2021 and 2020, the Company recognized $ 4.5 million and $ 4.5 million, respectively, of contractual interest and during the six months ended June 30, 2020, the Company recognized $ 2.6 million of discount amortization on the 3.125 % Convertible Notes. The effective interest rate for the three and six months ended June 30, 2020 was 5.2 % . (6) The Company can prepay these senior notes without penalty beginning July 1, 2024. (7) The Company can prepay these senior notes without penalty beginning May 1, 2025. (8) The Company can prepay these senior notes without penalty beginning August 15, 2024. (9) On January 1, 2021, the Company adopted ASU 2020-06 and reclassed $ 10.0 million of debt discount and unamortized fees from the 3.125 % Convertible Notes to shareholders’ equity on the Company’s consolidated balance sheet (refer to Note 3). (10) The Company capitalized interest relating to development activities of $ 0.2 million and $ 0.6 million during the three months ended June 30, 2021 and 2020, respectively, and $ 0.5 million and $ 1.1 million during the six months ended June 30, 2021 and 2020, respectively. ​ 27 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Future Scheduled Maturities —As of June 30, 2021, future scheduled maturities of outstanding debt obligations are as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured Debt Secured Debt Total 2021 (remaining six months) ​ $ — ​ $ 101,011 ​ $ 101,011 2022 ​ 287,500 ​ 95,867 ​ 383,367 2023 ​ — ​ 491,875 ​ 491,875 2024 ​ 775,000 ​ — ​ 775,000 2025 ​ 550,000 ​ 270,890 ​ 820,890 Thereafter ​ 500,000 ​ 242,407 ​ 742,407 Total principal maturities ​ 2,112,500 ​ 1,202,050 ​ 3,314,550 Unamortized discounts and deferred financing costs, net ​ ( 19,782 ) ​ ( 5,287 ) ​ ( 25,069 ) Total debt obligations, net ​ $ 2,092,718 ​ $ 1,196,763 ​ $ 3,289,481 ​ Senior Term Loan —The Company has a $ 650.0 million senior term loan (the “Senior Term Loan”) that bears interest at LIBOR plus 2.75 % per annum and matures in June 2023. The Senior Term Loan is secured by pledges of equity of certain subsidiaries that own a defined pool of assets. The Senior Term Loan permits substitution of collateral, subject to overall collateral pool coverage and concentration limits, over the life of the facility. The Company may make optional prepayments, subject to prepayment fees. As of June 30, 2021, the outstanding balance on the Company’s Senior Term Loan was $ 491.9 million. Revolving Credit Facility —The Company has a secured revolving credit facility (the “Revolving Credit Facility”) with a maximum capacity of $ 350.0 million that matures in September 2022. Outstanding borrowings under the Revolving Credit Facility are secured by pledges of the equity interests in the Company’s subsidiaries that own a defined pool of assets. Borrowings under this credit facility bear interest at a floating rate indexed to one of several base rates plus a margin which adjusts upward or downward based upon the Company’s corporate credit rating, ranging from 1.0 % to 1.5 % in the case of base rate loans and from 2.0 % to 2.5 % in the case of LIBOR loans. In addition, there is an undrawn credit facility commitment fee that ranges from 0.25 % to 0.45 %, based on corporate credit ratings. At maturity, the Company may convert outstanding borrowings to a one year term loan which matures in quarterly installments through September 2023. As of June 30, 2021, based on the Company’s borrowing base of assets, the Company had the ability to draw $ 341.7 million without pledging any additional assets to the facility. Unsecured Notes —As of June 30, 2021, the Company has senior unsecured notes outstanding with varying fixed-rates and maturities ranging from September 2022 to February 2026. The Company’s senior unsecured notes are interest only, are generally redeemable at the option of the Company and contain certain financial covenants (see below). During the six months ended June 30, 2020, repayments of unsecured notes prior to maturity resulted in losses on early extinguishment of debt of $ 4.1 million. This amount is included in “Loss on early extinguishment of debt, net” in the Company’s consolidated statements of operations. Debt Covenants —The Company’s outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness, as such terms are defined in the indentures governing the debt securities, of at least 1.2 x and a covenant restricting certain incurrences of debt based on a fixed charge coverage ratio. If any of the Company’s covenants are breached and not cured within applicable cure periods, the breach could result in acceleration of its debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. The Company’s Senior Term Loan and the Revolving Credit Facility contain certain covenants, including covenants relating to collateral coverage, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the Senior Term Loan requires the Company to maintain collateral coverage of at least 1.25 x outstanding borrowings on the facility. The Revolving Credit Facility is secured by a borrowing base of assets and requires the Company to maintain both borrowing base asset value 28 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents of at least 1.5 x outstanding borrowings on the facility and a consolidated ratio of cash flow to fixed charges of at least 1.5 x. The Revolving Credit Facility does not require that proceeds from the borrowing base be used to pay down outstanding borrowings provided the borrowing base asset value remains at least 1.5 x outstanding borrowings on the facility. To satisfy this covenant, the Company has the option to pay down outstanding borrowings or substitute assets in the borrowing base. Under both the Senior Term Loan and the Revolving Credit Facility the Company is permitted to pay dividends provided that no material default (as defined in the relevant agreement) has occurred and is continuing or would result therefrom and the Company remains in compliance with its financial covenants after giving effect to the dividend. The Company’s Senior Term Loan and the Revolving Credit Facility contain cross default provisions that would allow the lenders to declare an event of default and accelerate the Company’s indebtedness to them if the Company fails to pay amounts due in respect of its other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing the Company’s unsecured public debt securities permit the bondholders to declare an event of default and accelerate the Company’s indebtedness to them if the Company’s other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated. ​ Note 12—Commitments and Contingencies Unfunded Commitments —The Company generally funds construction and development loans and build-outs of space in real estate assets over a period of time if and when the borrowers and tenants meet established milestones and other performance criteria. The Company refers to these arrangements as Performance-Based Commitments. In addition, the Company has committed to invest capital in several real estate funds and other ventures. These arrangements are referred to as Strategic Investments. As of June 30, 2021, the maximum amount of fundings the Company may be required to make under each category, assuming all performance hurdles and milestones are met under the Performance-Based Commitments and that 100 % of its capital committed to Strategic Investments is drawn down, are as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans and Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lending ​ Real ​ Other ​ ​ ​ ​ Investments Estate Investments Total Performance-Based Commitments ​ $ 94,398 ​ $ 71,702 ​ $ 33,790 ​ $ 199,890 Strategic Investments ​ — ​ — ​ 14,934 ​ 14,934 Total ​ $ 94,398 ​ $ 71,702 ​ $ 48,724 ​ $ 214,824 ​ ​ 29 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Other Commitments —Future minimum lease obligations under non-cancelable operating and finance leases as of June 30, 2021 are as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Operating (1)(2) Finance (1) 2021 (remaining six months) ​ $ 2,588 ​ $ 2,763 2022 ​ 6,756 ​ 5,604 2023 ​ 6,393 ​ 5,716 2024 ​ 6,309 ​ 5,830 2025 ​ 6,297 ​ 5,946 Thereafter ​ 496 ​ 1,567,826 Total undiscounted cash flows ​ 28,839 ​ 1,593,685 Present value discount (1) ​ ( 3,128 ) ​ ( 1,441,760 ) Other adjustments (2) ​ 22,934 ​ — Lease liabilities ​ $ 48,645 ​ $ 151,925 (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 the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.1 % and the weighted average remaining lease term is 7.8 years. The weighted average remaining lease term for the Company’s operating leases, excluding operating leases for which the Company’s tenants pay rent on its behalf, was 5.1 years and the weighted average discount rate was 5.0 % . For finance leases, which relate primarily to the Company’s Ground Leases with SAFE, lease liabilities were discounted at a weighted average rate implicit in the lease of 5.5 % and the weighted average remaining lease term is 96.5 years. Right-of-use assets for finance leases are amortized on a straight-line basis over the term of the lease and are recorded in “Depreciation and amortization” in the Company’s consolidated statements of operations. During the three months ended June 30, 2021 and 2020, the Company recognized $ 2.1 million and $ 2.0 million, respectively, in "Interest expense" and $ 0.4 million and $ 0.4 million, respectively, in "Depreciation and amortization" in its consolidated statement of operations relating to finance leases. During the six months ended June 30, 2021 and 2020, the Company recognized $ 4.1 million and $ 4.1 million, respectively, in "Interest expense" and $ 0.7 million and $ 0.7 million, respectively, in "Depreciation and amortization" in its consolidated statement of operations relating to finance leases. During the three months ended June 30, 2021 and 2020, the Company made payments of $ 0.4 million and $ 1.1 million, respectively, related to its operating leases and $ 1.4 million and $ 1.3 million, respectively, related to its finance leases with SAFE . During the six months ended June 30, 2021 and 2020, the Company made payments of $ 1.2 million and $ 2.1 million, respectively, related to its operating leases and $ 2.7 million and $ 2.7 million, respectively, related to its finance leases with SAFE . (2) The Company is obligated to pay ground rent under certain operating leases; however, the Company’s tenants at the properties pay this expense directly under the terms of various subleases and these amounts are excluded from lease obligations. The amount shown above is the net present value of the payments to be made by the Company’s tenants on its behalf. Future minimum lease obligations under non-cancelable operating and finance leases as of December 31, 2020 are as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Operating (1)(2) Finance (1) 2021 ​ $ 3,797 ​ $ 5,494 2022 ​ 6,756 ​ 5,604 2023 ​ 6,393 ​ 5,716 2024 ​ 6,309 ​ 5,830 2025 ​ 6,297 ​ 5,946 Thereafter ​ 496 ​ 1,567,826 Total undiscounted cash flows ​ 30,048 ​ 1,596,416 Present value discount (1) ​ ( 3,771 ) ​ ( 1,445,896 ) Other adjustments (2) ​ 23,795 ​ — Lease liabilities ​ $ 50,072 ​ $ 150,520 (1) The weighted average remaining lease term for the Company’s operating leases, excluding operating leases for which the Company’s tenants pay rent on its behalf, was 5.6 years and the weighted average discount rate was 5.5 % . The weighted average remaining lease term for the Company’s finance leases was 97 years and the weighted average discount rate was 5.5 % . (2) The Company is obligated to pay ground rent under certain operating leases; however, the Company’s tenants at the properties pay this expense directly under the terms of various subleases and these amounts are excluded from lease obligations. The amount shown above is the net present value of the payments to be made by the Company’s tenants on its behalf. 30 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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 adverse effect on the Company’s consolidated financial statements. ​ Note 13—Derivatives The Company’s use of derivative financial instruments has historically been limited to the utilization of interest rate swaps, interest rate caps and foreign exchange contracts. The principal objective of such financial instruments is to minimize the risks and/or costs associated with the Company’s operating and financial structure and to manage its exposure to interest rates and foreign exchange rates. The Company may have derivatives that are not designated as hedges because they do not meet the strict hedge accounting requirements. Although not designated as hedges, such derivatives are entered into to manage the Company’s exposure to interest rate movements and other identified risks. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2021 and December 31, 2020 ($ in thousands): (1) ​ ​ ​ ​ ​ ​ ​ Derivative Liabilities ​ ​ Balance Sheet ​ Fair As of June 30, 2021 Location Value Derivatives Designated in Hedging Relationships ​ ​ ​ ​ ​ Interest rate swaps Accounts payable, accrued expenses and other liabilities ​ $ 13,481 Total ​ $ 13,481 ​ ​ ​ ​ ​ ​ As of December 31, 2020 ​ Derivatives Designated in Hedging Relationships ​ Interest rate swaps Accounts payable, accrued expenses and other liabilities ​ $ 18,926 Total ​ $ 18,926 (1) Over the next 12 months, the Company expects that $ 9.8 million related to cash flow hedges will be reclassified from “Accumulated other comprehensive income (loss)” as an increase to interest expense. 31 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The table below presents the effect of the Company’s derivative financial instruments, including the Company’s share of derivative financial instruments at certain of its equity method investments, in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Gain Amount of Gain ​ ​ Location of Gain ​ (Loss) Recognized in ​ (Loss) Reclassified ​ ​ (Loss) ​ Accumulated Other ​ from Accumulated Derivatives Designated in ​ When Recognized in ​ Comprehensive ​ Other Comprehensive Hedging Relationships Income Income Income into Earnings For the Three Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps Interest expense ​ $ ( 763 ) ​ $ ( 2,029 ) Interest rate swaps Earnings from equity method investments ​ ( 1 ) ​ ( 457 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, 2020 ​ ​ Interest rate swaps Interest expense ​ $ ( 2,365 ) ​ $ ( 1,799 ) Interest rate swaps Earnings from equity method investments ​ ( 986 ) ​ ( 307 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps Interest expense ​ $ 2,556 ​ $ ( 4,133 ) Interest rate swaps Earnings from equity method investments ​ 8,655 ​ ( 691 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2020 ​ ​ Interest rate swaps Interest Expense ​ $ ( 14,970 ) ​ $ ( 2,887 ) Interest rate swaps Earnings from equity method investments ​ ( 16,157 ) ​ ( 533 ) ​ ​ ​ 32 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 14—Equity Preferred Stock —The Company had the following series of Cumulative Redeemable Preferred Stock outstanding as of June 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cumulative Preferential Cash ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends (1)(2) ​ ​ ​ ​ ​ ​ Shares Issued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual ​ Carrying ​ ​ ​ Outstanding ​ Par ​ Liquidation ​ Rate per ​ Dividend ​ Value ​ Series (in thousands) Value Preference (3) Annum per share (in thousands) ​ D 4,000 ​ $ 0.001 ​ $ 25.00 8.00 % $ 2.00 ​ $ 89,041 ​ G 3,200 ​ 0.001 ​ 25.00 7.65 % 1.91 ​ 72,664 ​ I 5,000 ​ 0.001 ​ 25.00 7.50 % 1.88 ​ 120,785 ​ Total 12,200 ​ ​ ​ ​ ​ ​ ​ ​ $ 282,490 ​ (1) Holders of shares of the Series D, G and I preferred stock are entitled to receive dividends, when and as declared by the Company’s Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Company’s Board of Directors for the payment of dividends that is not more than 30 nor less than 10 days prior to the dividend payment date. (2) The Company declared and paid dividends of $ 4.0 million, $ 3.1 million and $ 4.7 million on its Series D, G and I Cumulative Redeemable Preferred Stock during both the six months ended June 30, 2021 and 2020. The character of the 2020 dividends was 100 % return of capital. There are no dividend arrearages on any of the preferred shares currently outstanding. (3) The Company may, at its option, redeem the Series G and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100 % of the liquidation preference of $ 25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date. Dividends —To maintain its qualification as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the REIT. The Company has recorded NOLs and may record NOLs in the future, which may reduce its taxable income in future periods and lower or eliminate entirely the Company’s obligation to pay dividends for such periods in order to maintain its REIT qualification. As of December 31, 2020, the Company had $ 529.6 million of NOL carryforwards at the corporate REIT level that can generally be used to offset both ordinary taxable income and capital gain net income in future years. The NOL carryforwards will begin to expire in 2032 and will fully expire in 2036 if unused. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and certain asset impairments), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows. The Senior Term Loan and the Revolving Credit Facility permit the Company to pay common dividends with no restrictions so long as the Company is not in default on any of its debt obligations. The Company declared common stock dividends of $ 17.4 million, or $ 0.235 per share, for the six months ended June 30, 2021 and $ 16.3 million, or $ 0.21 per share, for the six months ended June 30, 2020. The character of the 2020 dividends was 100 % return of capital. Stock Repurchase Program —The Company may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans. During the six months ended June 30, 2021, the Company repurchased 1.8 million shares of its outstanding common stock for $ 32.4 million, for an average cost of $ 17.57 per share. During the six months ended June 30, 2020, the Company repurchased 2.5 million shares of its outstanding common stock for $ 27.8 million, for an average cost of $ 10.98 per share. The Company is generally authorized to repurchase up to $ 50.0 million in shares of its common stock. As of July 31, 2021, the Company had remaining authorization to repurchase up to $ 33.0 million of common stock under its stock repurchase program. The Company’s Board of Directors subsequently authorized an increase to the stock repurchase program to $ 50.0 million effective after the date of the filing of this report on Form 10-Q. 33 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Accumulated Other Comprehensive Income (Loss) — “Accumulated other comprehensive income (loss)” reflected in the Company’s shareholders’ equity is comprised of the following ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ June 30, 2021 December 31, 2020 ​ Unrealized gains on available-for-sale securities ​ $ 4,220 $ 4,594 ​ Unrealized losses on cash flow hedges ​ ( 40,043 ) ​ ( 53,075 ) ​ Unrealized losses on cumulative translation adjustment ​ — ​ ( 4,199 ) ​ Accumulated other comprehensive loss ​ $ ( 35,824 ) ​ $ ( 52,680 ) ​ ​ ​ Note 15—Stock-Based Compensation Plans and Employee Benefits Stock-Based Compensation —The Company recorded stock-based compensation expense, including the expense related to performance incentive plans (see below), of $ 14.8 million and $ 20.3 million for the three and six months ended June 30, 2021, respectively, and $ 4.7 million and $ 21.0 million for the three and six months ended June 30, 2020, respectively, in “General and administrative” in the Company’s consolidated statements of operations. Performance Incentive Plans —The Company’s Performance Incentive Plans (“iPIP”) are designed to provide, primarily to senior executives and select professionals engaged in the Company’s investment activities, long-term compensation which has a direct relationship to the realized returns on investments included in the plans. Awards vest over six years , with 40 % being vested at the end of the second year and 15 % each year thereafter. As of June 30, 2021, there are five iPIP Plans, each covering a two-year investment period beginning with the 2013-2014 Plan through the 2021-2022 Plan. 2019-2022 iPIP Plans —The Company’s 2019-2020 and 2021-2022 iPIP plans are equity-classified awards which are measured at the grant date fair value and recognized as compensation cost in “General and administrative” in the Company’s consolidated statements of operations and “Noncontrolling interests” in the Company’s consolidated statements of changes in equity over the requisite service period. Investments in the 2019-2022 iPIP plans are held by consolidated subsidiaries of the Company and have two ownership classes, class A units and class B units. The Company owns 100 % of the class A units and the class B units were issued to employees as long-term compensation. Except for certain clawback provisions, participants can retain vested class B units upon their termination of employment with the Company. The class B units are entitled to distributions from the net cash realized from the investments in the plan after the Company, through its ownership of the class A units, has received a specified return on its invested capital and a return of its invested capital. Distributions on the class B units are also subject to reductions under a total shareholder return (“TSR”) adjustment. The fair value of the class B units was determined using a model that forecasts the underlying cash flows from the investments within the entity to which the class B units have ownership rights. During the six months ended June 30, 2021 and 2020, the Company recorded $ 1.5 million and $ 1.6 million, respectively, of expense related to the 2019-2022 iPIP plans. Distributions on the class B units are expected to be 50 % in cash and 50 % in shares of the Company’s common stock; provided, however, that (a) the cash portion will be increased if the Company does not have sufficient shares available under shareholder approved equity plans; and (b) if the principal remaining material asset in a plan is unsold SAFE shares, the Company may elect to distribute SAFE shares in lieu of cash and Company stock. The following is a summary of the status of the Company’s equity-classified iPIP plans and changes during the six months ended June 30, 2021. ​ ​ ​ ​ ​ ​ ​ iPIP Investment Pool ​ 2019-2020 2021-2022 Points at beginning of period 97.40 — Granted ​ — ​ 94.75 Forfeited ( 2.20 ) ( 10.00 ) Points at end of period 95.20 84.75 ​ 34 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents As of June 30, 2021, investments with an aggregate gross book value of $ 1.1 billion, including 26.7 million shares of SAFE common stock acquired by the Company, were attributable to the 2019-2020 Plan and investments with an aggregate gross book value of $ 109 million, including 0.3 million shares of SAFE common stock acquired by the Company, were attributable to the 2021-2022 Plan. 2013-2018 iPIP Plans —The remainder of the Company’s iPIP plans, as shown in the table below, are liability-classified awards and are remeasured each reporting period at fair value until the awards are settled. Certain employees will be granted awards that entitle employees to receive the residual cash flows from the investments in the plans after the Company has received a specified return on its invested capital and a return of its invested capital. Awards are also subject to reductions under a TSR adjustment. The fair value of awards is determined using a model that forecasts the Company’s projected investment performance. Settlement of the awards will be 50 % in cash and 50 % in shares of the Company’s common stock or in shares of SAFE’s common stock owned by the Company. The following is a summary of the status of the Company’s liability-classified iPIP plans and changes during the six months ended June 30, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ iPIP Investment Pool ​ 2013 ‑ 2014 2015 ‑ 2016 2017 ‑ 2018 Points at beginning of period 80.17 70.40 73.34 Granted ​ — ​ — ​ 2.00 Points at end of period 80.17 70.40 75.34 ​ During the six months ended June 30, 2021 and 2020, the Company recorded $ 15.1 million and $ 16.8 million, respectively, of expense related to the 2013-2018 iPIP plans. As of June 30, 2021, investments with an aggregate gross book value of $ 387 million were attributable to the 2013-2014 Plan, investments with an aggregate gross book value of $ 434 million were attributable to the 2015-2016 Plan and investments with an aggregate gross book value of $ 496 million, including 7.6 million shares of SAFE common stock acquired by the Company, were attributable to the 2017-2018 Plan. During the six months ended June 30, 2021, the Company made distributions to participants in the 2015-2016 investment pool. The iPIP participants received total distributions in the amount of $ 3.2 million as compensation, comprised of cash and 97,881 shares of the Company’s common stock with a fair value of $ 17.65 per share, which are fully-vested and issued under the 2009 LTIP (see below). After deducting statutory minimum tax withholdings, a total of 57,920 shares of the Company’s common stock were issued. During the six months ended June 30, 2020, the Company made distributions to participants in the 2015-2016 investment pool. The iPIP participants received total distributions in the amount of $ 1.5 million as compensation, comprised of cash and 54,245 shares of the Company’s common stock with a fair value of $ 14.51 per share, which are fully-vested and issued under the 2009 LTIP. After deducting statutory minimum tax withholdings, a total of 32,825 shares of the Company’s common stock were issued. As of June 30, 2021 and December 31, 2020, the Company had accrued compensation costs relating to iPIP of $ 81.0 million and $ 69.1 million, respectively, which are included in “Accounts payable, accrued expenses and other liabilities” on the Company’s consolidated balance sheets. Long-Term Incentive Plan —The Company’s 2009 Long-Term Incentive Plan (the “2009 LTIP”) is designed to provide incentive compensation for officers, key employees, directors and advisors of the Company. The 2009 LTIP provides for awards of stock options, shares of restricted stock, phantom shares, restricted stock units, dividend equivalent rights and other share-based performance awards. All awards under the 2009 LTIP are made at the discretion of the Company’s Board of Directors or a committee of the Board of Directors. The Company’s shareholders approved the 2009 LTIP in 2009 and approved the performance-based provisions of the 2009 LTIP, as amended, in 2014. In May 2021, the 35 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Company’s shareholders approved an increase in the number of shares available for issuance under the 2009 LTIP from a maximum of 8.9 million to 9.9 million and extended the expiration date of the 2009 LTIP from May 2029 to May 2031. As of June 30, 2021, an aggregate of 3.1 million shares remain available for issuance pursuant to future awards under the Company’s 2009 LTIP. Restricted Stock Unit Activity —A summary of the Company’s stock-based compensation awards to certain employees in the form of long-term incentive awards for the six months ended June 30, 2021, is as follows (in thousands): ​ ​ ​ Nonvested at beginning of period ​ 531 Granted ​ 331 Vested ​ ( 112 ) Forfeited ​ ( 32 ) Nonvested at end of period 718 ​ As of June 30, 2021, there was $ 6.7 million of total unrecognized compensation cost related to all unvested restricted stock units that are expected to be recognized over a weighted average remaining vesting/service period of 1.85 years. Directors’ Awards —During the six months ended June 30, 2021, the Company granted 38,186 restricted shares of common stock to non-employee Directors at a fair value of $ 17.51 at the time of grant for their annual equity awards and also issued 1,159 common stock equivalents (“CSEs”) at a fair value of $ 18.24 per CSE in respect of dividend equivalents on outstanding CSEs. As of June 30, 2021, a combined total of 129,019 CSEs and restricted shares of common stock granted to members of the Company’s Board of Directors remained outstanding under the Company’s Non-Employee Directors Deferral Plan, with an aggregate intrinsic value of $ 2.7 million. 401(k) Plan — The Company made contributions of $ 0.1 million and $ 0.1 million for the three months ended June 30, 2021 and 2020, respectively, and $ 0.7 million and $ 0.7 million for the six months ended June 30, 2021 and 2020, respectively, to the Company’s 401(k) Plan. ​ Note 16—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 June 30, ​ For the Six Months Ended June 30, ​ ​ 2021 2020 2021 2020 ​ Net loss ​ $ ( 11,416 ) ​ $ ( 14,363 ) ​ $ ( 3,427 ) ​ $ ( 27,249 ) ​ Net income attributable to noncontrolling interests ​ ( 2,253 ) ​ ( 3,098 ) ​ ( 4,773 ) ​ ( 5,789 ) ​ Preferred dividends ​ ( 5,874 ) ​ ( 5,874 ) ​ ( 11,748 ) ​ ( 11,748 ) ​ Net loss allocable to common shareholders for basic and diluted earnings per common share ​ $ ( 19,543 ) ​ $ ( 23,335 ) ​ $ ( 19,948 ) ​ $ ( 44,786 ) ​ ​ 36 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, ​ For the Six Months Ended June 30, ​ ​ 2021 2020 2021 2020 ​ Earnings allocable to common shares: ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ Net loss attributable to iStar Inc. and allocable to common shareholders ​ $ ( 19,543 ) ​ $ ( 23,335 ) ​ $ ( 19,948 ) ​ $ ( 44,786 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for basic and diluted earnings per share: ​ ​ ​ ​ ​ Weighted average common shares outstanding for basic and diluted earnings per common share ​ 72,872 ​ 76,232 ​ 73,374 ​ 76,838 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted earnings per common share: (1) ​ ​ ​ ​ ​ Net loss allocable to common shareholders ​ $ ( 0.27 ) ​ $ ( 0.31 ) ​ $ ( 0.27 ) ​ $ ( 0.58 ) ​ (1) For the three and six months ended June 30, 2021, the effect of the Company’s restricted stock awards were anti-dilutive. For the three and six months ended June 30, 2021, 4,700,805 shares and 3,797,296 shares, respectively, of the 3.125 % Convertible Notes (refer to Note 11) were anti-dilutive based upon the conversion price for such period. For the three and six months ended June 30, 2020, no shares of common stock would have been issuable upon conversion of the 3.125 % Convertible Notes, and therefore the 3.125 % Convertible Notes had no effect on diluted EPS for such periods. ​ Note 17—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. 37 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The following fair value hierarchy table summarizes the Company’s assets and liabilities recorded at fair value on a recurring and non-recurring basis by the above categories ($ 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 June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Recurring basis: ​ ​ ​ ​ Derivative liabilities (1) $ 13,481 $ — $ 13,481 $ — Available-for-sale securities (1) ​ 28,074 ​ — ​ — ​ 28,074 Non-recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other investments (2) ​ ​ 75,402 ​ ​ — ​ ​ 75,402 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2020 ​ ​ ​ ​ Recurring basis: ​ ​ ​ ​ Derivative liabilities (1) ​ ​ 18,926 ​ ​ — ​ ​ 18,926 ​ ​ — Available-for-sale securities (1) ​ ​ 25,274 ​ ​ — ​ ​ — ​ ​ 25,274 Non-recurring basis: ​ ​ ​ ​ Impaired land and development (3) ​ 6,078 ​ — ​ — ​ 6,078 (1) The fair value of the Company’s derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. The fair value of the Company’s available-for-sale securities are based upon unadjusted third-party broker quotes and are classified as Level 3. (2) During the six months ended June 30, 2021, the Company identified an observable price change in an equity security held by the Company as evidenced by an orderly private issuance of similar securities by the same issuer and, as such, classified such observable price change as Level 2. (3) The Company recorded a $ 1.3 million impairment on a land and development asset with an estimated fair value of $ 6.1 million. The estimated fair value is based on future cash flows expected to be received. The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s consolidated balance sheets for the six months ended June 30, 2021 and 2020 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2021 2020 Beginning balance ​ $ 25,274 ​ $ 23,896 Purchases ​ ​ 3,375 ​ ​ — Repayments ​ ( 201 ) ​ ( 460 ) Unrealized gains (losses) recorded in other comprehensive income ​ ( 374 ) ​ 1,175 Ending balance ​ $ 28,074 ​ $ 24,611 ​ ​ 38 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Fair values of financial instruments— The following table presents the carrying value and fair value for the Company’s financial instruments ($ in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 ​ As of December 31, 2020 ​ ​ Carrying ​ Fair ​ Carrying ​ Fair ​ Value Value Value Value Net investment in leases (1) ​ $ 478 ​ $ 491 ​ $ 429 ​ $ 431 Loans receivable and other lending investments, net (1) ​ 455 ​ 488 ​ 732 ​ 772 Cash and cash equivalents (2) ​ 155 ​ 155 ​ 99 ​ 99 Restricted cash (2) ​ 53 ​ 53 ​ 52 ​ 52 Loan participations payable, net (1) ​ — ​ — ​ 43 ​ 43 Debt obligations, net (1)(3) ​ ​ 3,289 ​ ​ 3,543 ​ ​ 3,287 ​ ​ 3,414 (1) The fair value of the Company’s net investment in leases, loans receivable and other lending investments, net, loan participations payable, net and debt obligations, net are classified as Level 3 within the fair value hierarchy. (2) 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. (3) As of June 30, 2021 and December 31, 2020, the fair value of the Company’s 3.125 % Senior Convertible Notes was $ 435.9 million and $ 338.8 million, respectively. ​ Note 18—Segment Reporting The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Net Lease, Real Estate Finance, Operating Properties and Land and Development. The Net Lease segment includes the Company’s activities and operations related to the ownership of properties generally leased to single corporate tenants and its investments in SAFE and Net Lease Venture II (refer to Note 8). The Real Estate Finance segment includes all of the Company’s activities related to senior and mezzanine real estate loans and real estate related securities. The Operating Properties segment includes the Company’s activities and operations related to its commercial and residential properties. The Land and Development segment includes the Company’s activities related to its developable land portfolio. The Company evaluates performance-based on the following financial measures for each segment. The Company’s segment information is as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Real Estate Operating Land and Corporate/ Company ​ ​ Lease ​ Finance ​ Properties ​ Development ​ Other (1) ​ Total Three Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ 40,752 ​ $ — ​ $ 4,703 ​ $ 89 ​ $ — ​ $ 45,544 Interest income ​ 1,188 ​ 7,785 ​ — ​ — ​ — ​ 8,973 Interest income from sales-type leases ​ 8,689 ​ — ​ — ​ — ​ — ​ 8,689 Other income ​ 4,690 ​ 52 ​ 3,953 ​ 1,315 ​ 54 ​ 10,064 Land development revenue ​ — ​ — ​ — ​ 32,318 ​ — ​ 32,318 Earnings (losses) from equity method investments ​ 11,302 ​ 755 ​ ( 2,935 ) ​ 1,474 ​ 2,101 ​ 12,697 Income from sales of real estate ​ 2,114 ​ — ​ 96 ​ — ​ — ​ 2,210 Total revenue and other earnings ​ 68,735 ​ 8,592 ​ 5,817 ​ 35,196 ​ 2,155 ​ 120,495 Real estate expense ​ ( 6,984 ) ​ — ​ ( 6,256 ) ​ ( 5,049 ) ​ — ​ ( 18,289 ) Land development cost of sales ​ — ​ — ​ — ​ ( 30,803 ) ​ — ​ ( 30,803 ) Other expense ​ — ​ ( 87 ) ​ — ​ — ​ ( 124 ) ​ ( 211 ) Allocated interest expense ​ ( 25,342 ) ​ ( 3,828 ) ​ ( 2,030 ) ​ ( 3,864 ) ​ ( 4,353 ) ​ ( 39,417 ) Allocated general and administrative (2) ​ ( 6,120 ) ​ ( 1,242 ) ​ ( 664 ) ​ ( 2,367 ) ​ ( 5,210 ) ​ ( 15,603 ) Segment profit (loss) (3) ​ $ 30,289 ​ $ 3,435 ​ $ ( 3,133 ) ​ $ ( 6,887 ) ​ $ ( 7,532 ) ​ $ 16,172 Other significant items: ​ ​ ​ ​ ​ ​ Recovery of loan losses ​ $ ( 105 ) ​ $ ( 2,158 ) ​ $ — ​ $ — ​ $ — ​ $ ( 2,263 ) Recovery of losses on net investment in leases ​ ( 265 ) ​ — ​ — ​ — ​ — ​ ( 265 ) Depreciation and amortization ​ 13,088 ​ — ​ 1,221 ​ 228 ​ 123 ​ 14,660 Capitalized expenditures ​ 63 ​ — ​ 432 ​ 4,571 ​ — ​ 5,066 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ Operating lease income ​ $ 41,500 ​ $ — ​ $ 5,242 ​ $ 70 ​ $ — ​ $ 46,812 39 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Interest income ​ 860 ​ 14,579 ​ — ​ — ​ — ​ 15,439 Interest income from sales-type leases ​ 8,295 ​ — ​ — ​ — ​ — ​ 8,295 Other income ​ 4,621 ​ 3,839 ​ 492 ​ 1,103 ​ 237 ​ 10,292 Land development revenue ​ — ​ — ​ — ​ 15,577 ​ — ​ 15,577 Earnings (losses) from equity method investments ​ 8,800 ​ — ​ ( 4,941 ) ​ 48 ​ ( 1,321 ) ​ 2,586 Income from sales of real estate ​ — ​ — ​ 62 ​ — ​ — ​ 62 Total revenue and other earnings ​ 64,076 ​ 18,418 ​ 855 ​ 16,798 ​ ( 1,084 ) ​ 99,063 Real estate expense ​ ( 6,134 ) ​ — ​ ( 4,509 ) ​ ( 3,633 ) ​ — ​ ( 14,276 ) Land development cost of sales ​ — ​ — ​ — ​ ( 16,287 ) ​ — ​ ( 16,287 ) Other expense ​ — ​ ( 21 ) ​ — ​ — ​ ( 182 ) ​ ( 203 ) Allocated interest expense ​ ( 24,388 ) ​ ( 5,959 ) ​ ( 2,183 ) ​ ( 4,422 ) ​ ( 4,998 ) ​ ( 41,950 ) Allocated general and administrative (2) ​ ( 5,177 ) ​ ( 1,575 ) ​ ( 595 ) ​ ( 2,385 ) ​ ( 4,522 ) ​ ( 14,254 ) Segment profit (loss) (3) ​ 28,377 ​ $ 10,863 ​ $ ( 6,432 ) ​ $ ( 9,929 ) ​ $ ( 10,786 ) ​ $ 12,093 Other significant non-cash items: ​ ​ ​ ​ ​ ​ Provision for loan losses ​ $ 57 ​ $ 2,010 ​ $ — ​ $ — ​ $ — ​ $ 2,067 Provision for losses on net investment in leases ​ ​ 534 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 534 Impairment of assets ​ 328 ​ — ​ 2,983 ​ 1,472 ​ — ​ 4,783 Depreciation and amortization ​ 12,487 ​ — ​ 1,271 ​ 243 ​ 299 ​ 14,300 Capitalized expenditures ​ 5,171 ​ — ​ 421 ​ 8,026 ​ — ​ 13,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Real Estate Operating Land and Corporate/ Company ​ ​ Lease ​ Finance ​ Properties ​ Development ​ Other (1) ​ Total Six Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ 83,265 ​ $ — ​ $ 9,540 ​ $ 183 ​ $ — ​ $ 92,988 Interest income ​ 2,066 ​ 17,557 ​ — ​ — ​ — ​ 19,623 Interest income from sales-type leases ​ 17,316 ​ — ​ — ​ — ​ — ​ 17,316 Other income ​ 9,444 ​ 151 ​ 6,291 ​ 2,704 ​ 5,764 ​ 24,354 Land development revenue ​ — ​ — ​ — ​ 64,567 ​ — ​ 64,567 Earnings (losses) from equity method investments ​ 23,715 ​ 1,220 ​ ( 6,682 ) ​ 4,619 ​ 2,594 ​ 25,466 Income from sales of real estate ​ 2,114 ​ — ​ 708 ​ — ​ — ​ 2,822 Total revenue and other earnings ​ 137,920 ​ 18,928 ​ 9,857 ​ 72,073 ​ 8,358 ​ 247,136 Real estate expense ​ ( 15,616 ) ​ — ​ ( 10,055 ) ​ ( 9,512 ) ​ — ​ ( 35,183 ) Land development cost of sales ​ — ​ — ​ — ​ ( 60,126 ) ​ — ​ ( 60,126 ) Other expense ​ — ​ ( 153 ) ​ — ​ — ​ ( 311 ) ​ ( 464 ) Allocated interest expense ​ ( 50,421 ) ​ ( 8,406 ) ​ ( 4,073 ) ​ ( 7,802 ) ​ ( 8,278 ) ​ ( 78,980 ) Allocated general and administrative (2) ​ ( 12,057 ) ​ ( 2,701 ) ​ ( 1,324 ) ​ ( 4,795 ) ​ ( 10,657 ) ​ ( 31,534 ) Segment profit (loss) (3) ​ $ 59,826 ​ $ 7,668 ​ $ ( 5,595 ) ​ $ ( 10,162 ) ​ $ ( 10,888 ) ​ $ 40,849 Other significant items: ​ ​ ​ ​ ​ ​ Recovery of loan losses ​ $ ( 257 ) ​ $ ( 5,800 ) ​ $ — ​ $ — ​ $ — ​ $ ( 6,057 ) Recovery of losses on net investment in leases ​ ( 1,866 ) ​ — ​ — ​ — ​ — ​ ( 1,866 ) Impairment of assets ​ 1,528 ​ — ​ 257 ​ — ​ — ​ 1,785 Depreciation and amortization ​ 26,141 ​ — ​ 3,208 ​ 446 ​ 320 ​ 30,115 Capitalized expenditures ​ 1,331 ​ — ​ 489 ​ 9,311 ​ — ​ 11,131 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ 82,965 ​ $ — ​ $ 11,015 ​ $ 178 ​ $ — ​ $ 94,158 Interest income ​ 1,683 ​ 30,972 ​ — ​ — ​ — ​ 32,655 Interest income from sales-type leases ​ 16,650 ​ — ​ — ​ — ​ — ​ 16,650 Other income ​ 8,913 ​ 4,145 ​ 3,650 ​ 1,727 ​ 12,225 ​ 30,660 Land development revenue ​ — ​ — ​ — ​ 95,752 ​ — ​ 95,752 Earnings (losses) from equity method investments ​ 28,332 ​ — ​ ( 7,608 ) ​ 632 ​ ( 2,158 ) ​ 19,198 Income from sales of real estate ​ — ​ — ​ 62 ​ — ​ — ​ 62 Total revenue and other earnings ​ 138,543 ​ 35,117 ​ 7,119 ​ 98,289 ​ 10,067 ​ 289,135 Real estate expense ​ ( 12,361 ) ​ — ​ ( 12,173 ) ​ ( 12,240 ) ​ — ​ ( 36,774 ) Land development cost of sales ​ — ​ — ​ — ​ ( 93,346 ) ​ — ​ ( 93,346 ) Other expense ​ — ​ ( 41 ) ​ — ​ — ​ ( 236 ) ​ ( 277 ) Allocated interest expense ​ ( 48,866 ) ​ ( 12,158 ) ​ ( 4,442 ) ​ ( 8,992 ) ​ ( 10,883 ) ​ ( 85,341 ) Allocated general and administrative (2) ​ ( 12,166 ) ​ ( 3,672 ) ​ ( 1,384 ) ​ ( 5,204 ) ​ ( 9,830 ) ​ ( 32,256 ) Segment profit (loss) (3) ​ $ 65,150 ​ $ 19,246 ​ $ ( 10,880 ) ​ $ ( 21,493 ) ​ $ ( 10,882 ) ​ $ 41,141 Other significant items: ​ ​ ​ ​ ​ ​ Provision for loan losses ​ $ — ​ $ 6,070 ​ $ — ​ $ — ​ $ — ​ $ 6,070 Provision for losses on net investment in leases ​ 1,826 ​ — ​ — ​ — ​ — ​ 1,826 Impairment of assets ​ 2,036 ​ — ​ 2,983 ​ 1,472 ​ — ​ 6,491 40 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Depreciation and amortization ​ ​ 25,143 ​ ​ — ​ ​ 2,556 ​ ​ 486 ​ ​ 601 ​ ​ 28,786 Capitalized expenditures ​ 7,017 ​ — ​ 1,338 ​ 20,052 ​ — ​ 28,407 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 ​ ​ ​ ​ ​ ​ Real estate, net ​ $ 1,273,031 ​ $ — ​ $ 93,975 ​ $ — ​ $ — ​ $ 1,367,006 Real estate available and held for sale ​ — ​ — ​ 99,201 ​ — ​ — ​ 99,201 Total real estate ​ 1,273,031 ​ — ​ 193,176 ​ — ​ — ​ 1,466,207 Net investment in leases ​ 477,798 ​ — ​ — ​ — ​ — ​ 477,798 Land and development, net ​ — ​ — ​ — ​ 381,719 ​ — ​ 381,719 Loans receivable and other lending investments, net ​ 47,392 ​ 407,568 ​ — ​ — ​ — ​ 454,960 Loan receivable held for sale ​ 62,525 ​ — ​ — ​ — ​ — ​ 62,525 Other investments ​ ​ 1,073,422 ​ ​ 46,945 ​ ​ 55,344 ​ ​ 13,576 ​ ​ 86,667 ​ ​ 1,275,954 Total portfolio assets ​ ​ 2,934,168 ​ ​ 454,513 ​ ​ 248,520 ​ ​ 395,295 ​ ​ 86,667 ​ 4,119,163 Cash and other assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 648,487 Total assets ​ ​ ​ ​ ​ ​ ​ ​ $ 4,767,650 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2020 ​ ​ ​ ​ ​ ​ Real estate, net ​ $ 1,291,903 ​ $ — ​ $ 192,378 ​ $ — ​ $ — ​ $ 1,484,281 Real estate available and held for sale ​ — ​ — ​ 5,212 ​ — ​ — ​ 5,212 Total real estate ​ 1,291,903 ​ — ​ 197,590 ​ — ​ — ​ 1,489,493 Net investment in leases ​ 429,101 ​ — ​ — ​ — ​ — ​ 429,101 Land and development, net ​ — ​ — ​ — ​ 430,663 ​ — ​ 430,663 Loans receivable and other lending investments, net ​ 45,398 ​ 686,932 ​ — ​ — ​ — ​ 732,330 Other investments ​ 1,016,710 ​ — ​ 58,739 ​ 31,200 ​ 69,911 ​ 1,176,560 Total portfolio assets ​ $ 2,783,112 ​ $ 686,932 ​ $ 256,329 ​ $ 461,863 ​ $ 69,911 ​ 4,258,147 Cash and other assets ​ ​ ​ ​ ​ ​ ​ ​ 603,661 Total assets ​ ​ ​ ​ ​ ​ ​ ​ $ 4,861,808 (1) Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company’s joint venture investments and strategic investments that are not included in the other reportable segments above. (2) General and administrative excludes stock-based compensation expense of $ 14.8 million and $ 20.3 million for the three and six months ended June 30, 2021, respectively, and $ 4.7 million and $ 21.0 million for the three and six months ended June 30, 2020, respectively. (3) The following is a reconciliation of segment profit to net income (loss) ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, ​ For the Six Months Ended June 30, ​ ​ 2021 2020 2021 2020 ​ Segment profit ​ $ 16,172 ​ $ 12,093 ​ $ 40,849 ​ $ 41,141 ​ Less: Recovery of (provision for) loan losses ​ 2,263 ​ ( 2,067 ) ​ 6,057 ​ ( 6,070 ) ​ Less: Recovery of (provision for) losses on net investment in leases ​ 265 ​ ( 534 ) ​ 1,866 ​ ( 1,826 ) ​ Less: Impairment of assets ​ — ​ ( 4,783 ) ​ ( 1,785 ) ​ ( 6,491 ) ​ Less: Stock-based compensation expense ​ ( 14,791 ) ​ ( 4,744 ) ​ ( 20,299 ) ​ ( 21,014 ) ​ Less: Depreciation and amortization ​ ( 14,660 ) ​ ( 14,300 ) ​ ( 30,115 ) ​ ( 28,786 ) ​ Less: Income tax expense ​ ( 665 ) ​ ( 28 ) ​ — ​ ( 88 ) ​ Less: Loss on early extinguishment of debt, net ​ — ​ — ​ — ​ ( 4,115 ) ​ Net loss ​ $ ( 11,416 ) ​ $ ( 14,363 ) ​ $ ( 3,427 ) ​ $ ( 27,249 ) ​ ​ ​ ​ ​ ​ 41 Table of Contents ​ ​