Safehold Inc. 10-Q

Item 1. Financial Statements iStar Inc. Consolidated Balance Sheets (In thousands, except per share data) (1) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 2021 ​ ASSETS ​ ​ ​ Real estate ​ ​ ​ Real estate, at cost ​ $ 111,719 ​ $ 113,510 ​ Less: accumulated depreciation ​ ( 22,575 ) ​ ( 21,360 ) ​ Real estate, net ​ 89,144 ​ 92,150 ​ Real estate available and held for sale ​ 1,283 ​ 301 ​ Total real estate ​ 90,427 ​ 92,451 ​ Real estate and other assets available and held for sale and classified as discontinued operations (2) ​ ​ 11,925 ​ ​ 2,299,711 ​ Net investment in leases ($ 0 of allowances as of December 31, 2021) ​ ​ — ​ ​ 43,215 ​ Land and development, net ​ 248,246 ​ 286,810 ​ Loans receivable and other lending investments, net ($ 2,890 and $ 4,769 of allowances as of September 30, 2022 and December 31, 2021, respectively) ​ 176,623 ​ 332,844 ​ Loans receivable held for sale ​ ​ — ​ ​ 43,215 ​ Other investments ​ 1,605,268 ​ 1,297,281 ​ Cash and cash equivalents ​ 1,335,722 ​ 339,601 ​ Accrued interest and operating lease income receivable, net ​ 1,035 ​ 1,813 ​ Deferred operating lease income receivable, net ​ 2,842 ​ 3,159 ​ Deferred expenses and other assets, net ​ 50,044 ​ 100,434 ​ Total assets ​ $ 3,522,132 ​ $ 4,840,534 ​ LIABILITIES AND EQUITY ​ ​ ​ Liabilities: ​ ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 140,876 ​ $ 236,732 ​ Liabilities associated with real estate held for sale and classified as discontinued operations (2) ​ ​ 2,918 ​ ​ 968,419 ​ Liabilities associated with properties held for sale ​ — ​ 3 ​ Debt obligations, net ​ 1,680,708 ​ 2,572,174 ​ Total liabilities ​ 1,824,502 ​ 3,777,328 ​ Commitments and contingencies (refer to Note 11) ​ ​ ​ Equity: ​ ​ ​ iStar Inc. shareholders' equity: ​ ​ ​ Preferred Stock Series D, G and I, liquidation preference $ 25.00 per share ​ 12 ​ 12 ​ Common Stock, $ 0.001 par value, 200,000 shares authorized, 86,695 and 68,870 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively ​ 87 ​ 69 ​ Additional paid-in capital ​ 3,457,961 ​ 3,100,015 ​ Accumulated deficit ​ ( 1,772,843 ) ​ ( 2,227,213 ) ​ Accumulated other comprehensive loss ​ ( 4,898 ) ​ ( 21,587 ) ​ Total iStar Inc. shareholders' equity ​ 1,680,319 ​ 851,296 ​ Noncontrolling interests ​ 17,311 ​ 211,910 ​ Total equity ​ 1,697,630 ​ 1,063,206 ​ Total liabilities and equity ​ $ 3,522,132 ​ $ 4,840,534 ​ (1) Refer to Note 2 for details on the Company’s consolidated variable interest entities (“VIEs”). (2) Refer to Note 3 - Net Lease Sale and Discontinued Operations. ​ 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 September 30, ​ For the Nine Months Ended September 30, ​ 2022 2021 2022 2021 Revenues: ​ ​ ​ ​ ​ Operating lease income ​ $ 3,424 ​ $ 3,732 ​ $ 9,715 ​ $ 13,456 Interest income ​ 2,093 ​ 6,972 ​ 11,262 ​ 24,846 Interest income from sales-type leases ​ 129 ​ 526 ​ 861 ​ 683 Other income ​ 27,024 ​ 39,033 ​ 51,545 ​ 60,950 Land development revenue ​ 15,087 ​ 93,369 ​ 54,390 ​ 157,936 Total revenues ​ 47,757 ​ 143,632 ​ 127,773 ​ 257,871 Costs and expenses: ​ ​ ​ ​ Interest expense ​ 22,664 ​ 28,695 ​ 76,056 ​ 86,145 Real estate expense ​ 16,204 ​ 13,369 ​ 39,337 ​ 33,404 Land development cost of sales ​ 16,778 ​ 87,380 ​ 55,369 ​ 147,507 Depreciation and amortization ​ 1,290 ​ 1,742 ​ 3,985 ​ 5,715 General and administrative ​ 14,210 ​ 17,121 ​ 10,406 ​ 68,954 Provision for (recovery of) loan losses ​ ( 157 ) ​ ( 1,610 ) ​ 22,556 ​ ( 7,411 ) Provision for (recovery of) losses on net investment in leases ​ ( 380 ) ​ ( 315 ) ​ — ​ 465 Impairment of assets ​ — ​ 421 ​ 1,768 ​ 679 Other expense ​ 4,171 ​ 894 ​ 6,624 ​ 1,358 Total costs and expenses ​ 74,780 ​ 147,697 ​ 216,101 ​ 336,816 Income from sales of real estate ​ 951 ​ 25,611 ​ 1,443 ​ 26,319 Income (loss) from operations before earnings from equity method investments and other items ​ ( 26,072 ) ​ 21,546 ​ ( 86,885 ) ​ ( 52,626 ) Loss on early extinguishment of debt, net ​ ( 13,209 ) ​ — ​ ( 131,200 ) ​ — Earnings from equity method investments ​ 57,797 ​ 87,795 ​ 102,222 ​ 110,661 Net income (loss) from continuing operations before income taxes ​ 18,516 ​ 109,341 ​ ( 115,863 ) ​ 58,035 Income tax (expense) benefit ​ ( 564 ) ​ 39 ​ ( 567 ) ​ 117 Net income (loss) from continuing operations ​ ​ 17,952 ​ ​ 109,380 ​ ​ ( 116,430 ) ​ ​ 58,152 Net income from discontinued operations (1) ​ — ​ 21,614 ​ 797,688 ​ 69,415 Net income ​ ​ 17,952 ​ ​ 130,994 ​ ​ 681,258 ​ ​ 127,567 Net (income) loss from continuing operations attributable to noncontrolling interests ​ 53 ​ ( 10 ) ​ ( 46 ) ​ 55 Net (income) from discontinued operations attributable to noncontrolling interests (1) ​ ​ — ​ ​ ( 3,254 ) ​ ​ ( 179,089 ) ​ ​ ( 8,092 ) Net income attributable to iStar Inc. ​ 18,005 ​ 127,730 ​ 502,123 ​ 119,530 Preferred dividends ​ ( 5,874 ) ​ ( 5,874 ) ​ ( 17,622 ) ​ ( 17,622 ) Net income allocable to common shareholders ​ $ 12,131 ​ $ 121,856 ​ $ 484,501 ​ $ 101,908 Per common share data: ​ ​ ​ ​ Net income (loss) allocable to common shareholders ​ ​ ​ ​ Basic ​ $ 0.14 ​ $ 1.71 ​ $ 6.16 ​ $ 1.40 Diluted ​ $ 0.14 ​ $ 1.51 ​ $ 6.16 ​ $ 1.30 Net income (loss) from continuing operations and allocable to common shareholders: ​ ​ ​ ​ Basic ​ $ 0.14 ​ $ 1.45 ​ $ ( 1.70 ) ​ $ 0.56 Diluted ​ $ 0.14 ​ $ 1.28 ​ $ ( 1.70 ) ​ $ 0.52 Net income from discontinued operations and allocable to common shareholders: ​ ​ ​ ​ Basic ​ $ — ​ $ 0.26 ​ $ 7.86 ​ $ 0.84 Diluted ​ $ — ​ $ 0.23 ​ $ 7.86 ​ $ 0.78 Weighted average number of common shares: ​ ​ ​ ​ Basic ​ 85,458 ​ 71,299 ​ 78,706 ​ 72,675 Diluted ​ 85,867 ​ 80,487 ​ 78,706 ​ 78,402 (1) Refer to Note 3 - Net Lease Sale and Discontinued Operations. ​ 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 September 30, For the Nine Months Ended September 30, ​ ​ 2022 2021 ​ 2022 2021 ​ Net income ​ $ 17,952 ​ $ 130,994 ​ $ 681,258 ​ $ 127,567 ​ Other comprehensive income: ​ ​ ​ ​ ​ Reclassification of losses on cash flow hedges into earnings upon realization (1) ​ 562 ​ 2,683 ​ 1,763 ​ 7,507 ​ Reclassification of losses on available-for-sale securities ​ ​ 386 ​ ​ — ​ ​ 386 ​ ​ — ​ Unrealized losses on available-for-sale securities ​ — ​ ( 539 ) ​ ( 4,623 ) ​ ( 913 ) ​ Unrealized gains on cash flow hedges 12,026 273 ​ 19,163 ​ 11,483 ​ Other comprehensive income ​ 12,974 2,417 ​ 16,689 ​ 18,077 ​ Comprehensive income ​ 30,926 ​ 133,411 ​ 697,947 ​ 145,644 ​ Comprehensive (income) attributable to noncontrolling interests (2) ​ 53 ​ ( 4,207 ) ​ ( 179,135 ) ​ ( 11,951 ) ​ Comprehensive income attributable to iStar Inc. ​ $ 30,979 ​ $ 129,204 ​ $ 518,812 ​ $ 133,693 ​ (1) Reclassified to “Net income from discontinued operations” in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2021 is $ 2,050 and $ 6,183 respectively. Reclassified to “Earnings from equity method investments” in the Company’s consolidated statements of operations for the three months ended September 30, 2022 and 2021 are $ 562 and $ 633 respectively. Reclassified to “Earnings from equity method investments” in the Company’s consolidated statements of operations for the nine months ended September 30, 2022 and 2021 are $ 1,763 and $ 1,324 , respectively. (2) For the three months ended September 30, 2021, $ 4.2 million of comprehensive income attributable to noncontrolling interests was from discontinued operations. For the nine months ended September 30, 2022 and 2021, $ 179.1 million and $ 12.0 million, respectively, of comprehensive income attributable to noncontrolling interests was from discontinued operations . 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 June 30, 2022 ​ $ 12 ​ $ 84 ​ $ 3,406,422 ​ $ ( 1,774,069 ) ​ $ ( 17,872 ) ​ $ 16,287 ​ $ 1,630,864 Dividends declared—preferred ​ — ​ — ​ — ​ ( 5,874 ) ​ — ​ — ​ ( 5,874 ) Dividends declared—common ($ 0.125 per share) ​ — ​ — ​ — ​ ( 10,905 ) ​ — ​ — ​ ( 10,905 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ — ​ 1,262 ​ — ​ — ​ 1,077 ​ 2,339 Issuance of common stock in connection with 3.125 % convertible notes (3) ​ ​ — ​ ​ 3 ​ ​ 50,277 ​ ​ — ​ ​ — ​ ​ — ​ ​ 50,280 Net income (loss) ​ — ​ — ​ — ​ 18,005 ​ — ​ ( 53 ) ​ 17,952 Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 12,974 ​ — ​ 12,974 Balance as of September 30, 2022 ​ $ 12 ​ $ 87 ​ $ 3,457,961 ​ $ ( 1,772,843 ) ​ $ ( 4,898 ) ​ $ 17,311 ​ $ 1,697,630 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2021 ​ $ 12 ​ $ 72 ​ $ 3,185,748 ​ $ ( 2,338,454 ) ​ $ ( 35,824 ) ​ $ 197,152 ​ $ 1,008,706 Dividends declared—preferred ​ — ​ — ​ — ​ ( 5,874 ) ​ — ​ — ​ ( 5,874 ) Dividends declared—common ($ 0.125 per share) ​ — ​ — ​ — ​ ( 8,954 ) ​ — ​ — ​ ( 8,954 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ — ​ 1,158 ​ — ​ — ​ 1,107 ​ 2,265 Net income (loss) ​ — ​ — ​ — ​ 127,730 ​ — ​ 3,264 ​ 130,994 Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 1,474 ​ 943 ​ 2,417 Repurchase of stock ​ — ​ ( 2 ) ​ ( 59,505 ) ​ — ​ — ​ — ​ ( 59,507 ) Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 169 ​ ​ 169 Distributions to noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ ( 3,917 ) ​ ( 3,917 ) Change to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 74 ) ​ ​ ( 74 ) Balance as of September 30, 2021 ​ $ 12 ​ $ 70 ​ $ 3,127,401 ​ $ ( 2,225,552 ) ​ $ ( 34,350 ) ​ $ 198,644 ​ $ 1,066,225 ​ ​ 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, 2021 ​ $ 12 ​ $ 69 ​ $ 3,100,015 ​ $ ( 2,227,213 ) ​ $ ( 21,587 ) ​ $ 211,910 ​ $ 1,063,206 Dividends declared—preferred ​ — ​ — ​ — ​ ( 17,622 ) ​ — ​ — ​ ( 17,622 ) Dividends declared—common ($ 0.375 per share) ​ — ​ — ​ — ​ ( 30,131 ) ​ — ​ — ​ ( 30,131 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ 1 ​ 10,148 ​ — ​ — ​ 3,504 ​ 13,653 Issuance of common stock in connection with 3.125 % convertible notes(3) ​ ​ — ​ ​ 17 ​ ​ 347,798 ​ ​ — ​ ​ — ​ ​ — ​ ​ 347,815 Net income ​ — ​ — ​ — ​ 502,123 ​ — ​ 179,135 ​ 681,258 Change in accumulated other comprehensive income (loss) ​ — ​ — ​ — ​ — ​ 16,689 ​ — ​ 16,689 Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 7,893 ​ ​ 7,893 Distributions to noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 385,131 ) ​ ​ ( 385,131 ) Balance as of September 30, 2022 ​ $ 12 ​ $ 87 ​ $ 3,457,961 ​ $ ( 1,772,843 ) ​ $ ( 4,898 ) ​ $ 17,311 ​ $ 1,697,630 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ — ​ — ​ ( 25,869 ) ​ 15,850 ​ — ​ — ​ ( 10,019 ) Dividends declared—preferred ​ — ​ — ​ — ​ ( 17,622 ) ​ — ​ — ​ ( 17,622 ) Dividends declared—common ($ 0.36 per share) ​ — ​ — ​ — ​ ( 26,338 ) ​ — ​ — ​ ( 26,338 ) Issuance of stock/restricted stock unit amortization, net (2) ​ — ​ — ​ 4,929 ​ — ​ — ​ 2,645 ​ 7,574 Net income (loss) ​ — ​ — ​ — ​ 119,530 ​ — ​ 8,037 ​ 127,567 Change in accumulated other comprehensive income (loss) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 18,330 ​ ​ 3,913 ​ ​ 22,243 Repurchase of stock ​ ​ — ​ ​ ( 4 ) ​ ​ ( 91,859 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 91,863 ) Contributions from noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,026 ​ ​ 1,026 Distributions to noncontrolling interests ​ — ​ — ​ ( 335 ) ​ — ​ — ​ ( 10,317 ) ​ ( 10,652 ) Change to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 74 ) ​ ​ ( 74 ) Balance as of September 30, 2021 ​ $ 12 ​ $ 70 ​ $ 3,127,401 ​ $ ( 2,225,552 ) ​ $ ( 34,350 ) ​ $ 198,644 ​ $ 1,066,225 (1) Refer to Note 13 for details on the Company’s Preferred Stock. (2) Net of payments for withholding taxes upon vesting of stock-based compensation. (3) Refer to Note 10 for details on the Company’s 3.125 % convertible notes. ​ 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 Nine Months Ended September 30, ​ ​ 2022 2021 ​ Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 681,258 ​ $ 127,567 ​ Adjustments to reconcile net income (loss) to cash flows from operating activities: ​ ​ ​ Provision for (recovery of) loan losses ​ 22,556 ​ ( 7,613 ) ​ Provision for losses on net investment in leases ​ — ​ ( 1,735 ) ​ Impairment of assets ​ 3,260 ​ 2,965 ​ Depreciation and amortization ​ 3,985 ​ 44,971 ​ Non-cash interest income from sales-type leases ​ ( 1,748 ) ​ ( 22,243 ) ​ Stock-based compensation ​ ( 30,724 ) ​ 23,300 ​ Amortization of discounts/premiums and deferred financing costs on debt obligations, net ​ 7,362 ​ 5,920 ​ Amortization of discounts/premiums and deferred interest on loans, net ​ ( 6,615 ) ​ ( 11,730 ) ​ Deferred interest on loans received ​ 4,738 ​ 24,394 ​ Earnings from equity method investments ​ ( 229,351 ) ​ ( 114,675 ) ​ Distributions from operations of other investments ​ 149,741 ​ 37,433 ​ Deferred operating lease income ​ ( 2,169 ) ​ ( 7,874 ) ​ Income from sales of real estate ​ ( 685,180 ) ​ ( 28,433 ) ​ Land development revenue in excess of cost of sales ​ 979 ​ ( 10,429 ) ​ Loss on early extinguishment of debt, net ​ 172,608 ​ — ​ Other operating activities, net ​ ( 12,846 ) ​ ( 14,031 ) ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ Origination and fundings of loans receivable held for sale ​ ​ — ​ ​ ( 42,000 ) ​ Changes in accrued interest and operating lease income receivable ​ 2,552 ​ 5,259 ​ Changes in deferred expenses and other assets, net ​ ( 15,308 ) ​ ( 9,186 ) ​ Changes in accounts payable, accrued expenses and other liabilities ​ ( 49,725 ) ​ ( 6,601 ) ​ Cash flows provided by (used in) operating activities ​ 15,373 ​ ( 4,741 ) ​ Cash flows from investing activities: ​ ​ ​ Originations and fundings of loans receivable, net ​ ( 5,831 ) ​ ( 71,921 ) ​ Capital expenditures on real estate assets ​ ( 1,090 ) ​ ( 5,835 ) ​ Capital expenditures on land and development assets ​ ( 15,993 ) ​ ( 15,603 ) ​ Acquisitions of real estate, net investments in leases and land assets ​ ( 36,730 ) ​ ( 42,000 ) ​ Repayments of and principal collections on loans receivable and other lending investments, net ​ 90,615 ​ 226,065 ​ Net proceeds from sales of loans receivable ​ 145,583 ​ 122,609 ​ Net proceeds from sales of real estate ​ 1,982,254 ​ 125,666 ​ Net proceeds from sales of land and development assets ​ 51,580 ​ 154,094 ​ Net proceeds from sales of net investment in leases ​ ​ 608,238 ​ ​ 14,910 ​ Net proceeds from sales of other investments ​ ​ — ​ ​ 3,000 ​ Distributions from other investments ​ 161,275 ​ 34,926 ​ Contributions to and acquisition of interest in other investments ​ ( 273,206 ) ​ ( 171,005 ) ​ Other investing activities, net ​ ( 62 ) ​ ( 1,184 ) ​ Cash flows provided by investing activities ​ 2,706,633 ​ 373,722 ​ Cash flows from financing activities: ​ ​ ​ Borrowings from debt obligations ​ 50,000 ​ 25,000 ​ Repayments and repurchases of debt obligations ​ ( 1,154,033 ) ​ ( 44,534 ) ​ Purchase of marketable securities in connection with the defeasance of mortgage notes payable ​ ( 252,571 ) ​ — ​ Preferred dividends paid ​ ( 17,622 ) ​ ( 17,622 ) ​ Common dividends paid ​ ( 30,224 ) ​ ( 26,149 ) ​ Repurchase of stock ​ — ​ ( 88,946 ) ​ Payments for deferred financing costs ​ — ​ ( 75 ) ​ Payments for withholding taxes upon vesting of stock-based compensation ​ ( 10,567 ) ​ ( 2,210 ) ​ Contributions from noncontrolling interests ​ 7,893 ​ 233 ​ Distributions to noncontrolling interests ​ ( 351,005 ) ​ ( 10,317 ) ​ Payments for debt prepayment or extinguishment costs ​ ( 16,676 ) ​ — ​ Cash flows used in financing activities ​ ( 1,774,805 ) ​ ( 164,620 ) ​ Effect of exchange rate changes on cash ​ ( 100 ) ​ ( 126 ) ​ Changes in cash, cash equivalents and restricted cash ​ 947,101 ​ 204,235 ​ Cash, cash equivalents and restricted cash at beginning of period ​ 393,996 ​ 150,566 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 1,341,097 ​ $ 354,801 ​ ​ ​ ​ ​ 7 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, ​ ​ ​ 2022 2021 ​ Reconciliation of cash and cash equivalents and restricted cash presented on the consolidated statements of cash flows ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,335,722 ​ $ 298,886 ​ Restricted cash included in deferred expenses and other assets, net ​ ​ 5,375 ​ ​ 55,915 ​ Total cash and cash equivalents and restricted cash ​ $ 1,341,097 ​ $ 354,801 ​ Supplemental disclosure of non-cash investing and financing activity: ​ ​ ​ Fundings and (repayments) of loan receivables and loan participations, net ​ $ — ​ $ ( 42,501 ) ​ Accounts payable for capital expenditures on land and development and real estate assets ​ ​ 2,258 ​ ​ 1,125 ​ Contributions to other investments ​ ​ — ​ ​ 2,000 ​ Distributions to noncontrolling interests ​ 34,467 ​ — ​ Defeasance of mortgage notes payable ​ 230,452 ​ — ​ Marketable securities transferred in connection with the defeasance of mortgage notes payable ​ 252,571 ​ — ​ Settlement of senior unsecured notes (refer to Note 10) ​ ​ 218,945 ​ ​ — ​ Accrued repurchase of stock ​ — ​ 3,117 ​ Assumption of mortgage by third party ​ 62,825 ​ — ​ ​ 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 investments (refer to Note 8). The Company has invested 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 (refer to Note 3 - Net Lease Sale and Discontinued Operations), real estate finance, operating properties and land and development (refer to Note 17). 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. ​ Merger with Safehold Inc. —On August 10, 2022, the Company entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Safehold Inc. (“SAFE”). The Merger Agreement provides that, subject to the terms and conditions thereof, SAFE will merge with and into the Company (the “Merger”). The surviving company of the Merger will be named Safehold Inc. (“ New SAFE ”) and its shares of common stock will trade on the New York Stock Exchange under the symbol “SAFE.” The Company expects that the Merger will close in the first quarter or second quarter of 2023. ​ As discussed further below, shortly before the closing of the Merger, the Company intends to separate its remaining legacy non-ground lease assets and businesses into a separate public company (“ SpinCo ”) by distributing to the Company’s stockholders, on a pro rata basis, the issued and outstanding equity interests of SpinCo (the “ Spin-Off ”). ​ Conditions to the Merger The consummation of the Merger is subject to the satisfaction or waiver of certain closing conditions, including: (i) the approval of the Company’s stockholders, (ii) the approval of SAFE’s stockholders, (iii) completion of the Spin-Off, (iv) the approval of the shares of STAR Common Stock to be issued in the Merger for listing on the NYSE, (v) the effectiveness of a registration statement on Form S-4 registering the STAR Common Stock to be issued in the Merger, (vi) the absence of any temporary restraining order, injunction or other order of any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the reverse stock split or the Merger, (vii) generation of certain cash proceeds, (viii) the receipt of certain tax opinions by the Company and SAFE that the Merger will qualify as a reorganization under the Internal Revenue Code and that the Company and SAFE each qualifies as a REIT for federal income tax purposes, (ix) the accuracy of certain representations and warranties of the Company and SAFE contained in the Merger Agreement and the compliance by the parties with the covenants contained in the Merger Agreement (subject to customary materiality qualifiers), and (x) other conditions specified in the Merger Agreement. ​ Conditions to the Spin-Off ​ Completion of the Spin-Off is subject to: (i) completion of the documents for the Spin-Off related financings; (ii) the satisfaction or waiver of relevant conditions to the consummation of the Merger; (iii) effectiveness of a registration statement on Securities and Exchange Commission (“SEC”) Form 10; (iv) the absence of an injunction or law preventing the consummation of the Spin-Off, the distribution and the transactions related thereto; and (v) other customary closing conditions. ​ Other Merger related transactions ​ The Company has entered into an agreement (the “ MSD Stock Purchase Agreement ”) with MSD Partners, L.P. (“ MSD Partners ”) and SAFE under which the Company has agreed to sell and MSD Partners has agreed to buy 5,405,406 shares of the SAFE’s common stock owned by the Company for $ 200.0 million (the “ MSD Stock Purchase ”) shortly before the closing of the Merger. If the Merger Agreement is terminated for any reason, the parties’ obligations to 9 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents consummate the purchase and sale will also terminate. In addition to customary closing conditions, MSD Partners’ obligations to purchase SAFE’s common stock owned by the Company are subject to the condition that the closing of the MSD Caret Purchase (as defined below) will take place substantially concurrently with the closing of the MSD Stock Purchase. Upon closing of the transaction, MSD Partners will have a right to designate an observer to the board of directors of New SAFE, a preemptive right on future equity issuances (subject to certain exceptions) and registration rights. MSD Partners will be subject to a customary standstill and certain restrictions on sales of its New SAFE Common Stock. MSD Partners has also subscribed to purchase 100,000 Caret units from SAFE for an aggregate purchase price of $ 20.0 million (the “ MSD Caret Purchase ”), conditioned on the closing of the Spin-Off and the Merger. MSD Partners’ obligations to purchase the Caret units are also subject to the closing of the MSD Stock Purchase and the implementation by SAFE of certain changes to its Caret program. ​ SpinCo will be capitalized in part with an 8.0 %, four-year term loan from New SAFE having an initial principal amount of $ 100.0 million or such other amount as the parties may agree prior to the closing of the Merger, as well as up to $ 140.0 million of bank debt from Morgan Stanley Bank, N.A. which will be secured by $ 400 million in shares of SAFE common stock. New SAFE will enter into a management agreement with SpinCo, under which it will continue to operate and pursue the orderly monetization of SpinCo’s assets. SpinCo will pay to New SAFE an annual management fee of $ 25.0 million in year one, $ 15.0 million in year two, $ 10.0 million in year three and $ 5.0 million in year four and 2.0 % of the gross book value of SpinCo's assets, excluding shares of SAFE common stock, for each annual term thereafter. New SAFE and SpinCo will also enter into a governance agreement that will place certain restrictions on the transfer and voting of the shares of New SAFE owned by SpinCo, and a registration rights agreement under which New SAFE will agree to register such shares for resale in accordance with applicable securities laws. ​ The Company and SAFE have entered into a voting agreement pursuant to which the Company has agreed vote its shares representing 41.9 % of the outstanding SAFE Common Stock to approve the Merger and take certain other actions, including voting against any alternative acquisition proposal or other proposal which could reasonably be expected to materially delay, postpone or materially adversely affect the consummation of the transactions contemplated by the Merger Agreement. In accordance with the terms of the existing stockholders’ agreement between SAFE and the Company, the remainder of the SAFE Common Stock owned by the Company will be voted in the same manner and proportion as the votes cast by the remaining shareholders of SAFE. The voting agreement and the obligations thereunder terminate upon the termination of the Merger Agreement in accordance with its terms. ​ As noted above, the Merger and related transactions are subject to a number of conditions, several of which are outside the Company's control; therefore, there can be no assurance that the Merger and related transactions will occur within the time frame currently expected by the parties, or at all. The foregoing descriptions of the Merger and the Merger Agreement and the related transactions and agreements do not purport to be complete and are subject to, and qualified in their entirety by, the full text of such agreements. Please see the Company's filings with the Securities and Exchange Commission for additional information, including copies of such agreements. ​ The Company has covenanted to redeem all of its outstanding preferred stock at the liquidation preference per share plus accrued and unpaid dividends and to retire all of its remaining senior unsecured notes in connection with the Merger. The Company’s trust preferred securities will remain outstanding at New SAFE. ​ 10 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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, 2021 (the “2021 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 (refer to Note 3 – Net Lease Sale and Discontinued Operations) 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 “Net income from discontinued operations,” “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 September 30, 2022 and 11 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents December 31, 2021. The following table presents the assets and liabilities of the Company’s consolidated VIEs as of September 30, 2022 and December 31, 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ As of ​ September 30, 2022 December 31, 2021 ASSETS ​ ​ ​ Real estate ​ ​ ​ Real estate, at cost ​ $ 93,940 ​ $ 93,477 Less: accumulated depreciation ​ ( 17,277 ) ​ ( 14,987 ) Real estate, net ​ 76,663 ​ 78,490 Real estate and other assets available and held for sale and classified as discontinued operations ​ ​ — ​ ​ 886,845 Land and development, net ​ 145,545 ​ 176,833 Cash and cash equivalents ​ 33,768 ​ 23,908 Deferred operating lease income receivable, net ​ 6 ​ 3 Deferred expenses and other assets, net ​ 6,420 ​ 5,001 Total assets ​ $ 262,402 ​ $ 1,171,081 LIABILITIES ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 25,078 ​ $ 24,744 Liabilities associated with real estate held for sale and classified as discontinued operations ​ ​ 146 ​ ​ 493,739 Total liabilities ​ 25,224 ​ 518,483 ​ 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 September 30, 2022, the Company’s maximum exposure to loss from these investments does not exceed the sum of the $ 55.3 million carrying value of the investments, which are classified in “Other investments” on the Company’s consolidated balance sheets, and $ 4.9 million of related unfunded commitments. ​ Note 3—Summary of Significant Accounting Policies Net Lease Sale and Discontinued Operations — A discontinued operation represents: (i) a component of the Company or group of components that has been disposed of or is classified as held for sale in a single transaction and represents a strategic shift that has or will have a major effect on the Company’s operations and financial results or (ii) an acquired business that is classified as held for sale on the date of acquisition. ​ Net Lease Sale — In March 2022, the Company, through certain subsidiaries of and entities managed by the Company, closed on a definitive purchase and sale agreement to sell a portfolio of net lease properties owned and managed by such subsidiaries and entities to a third party for an aggregate gross sales price of approximately $ 3.07 billion and recognized a gain of $ 663.7 million in “Net income from discontinued operations” in the Company’s consolidated statements of operations. The Company refers to this transaction as the "Net Lease Sale" in this report. The Net Lease Sale is consistent with the Company’s stated corporate strategy which is to grow its Ground Lease and Ground Lease adjacent businesses (refer to Note 8) and simplify its portfolio through sales of other assets. ​ The portfolio sold consisted of office, entertainment and industrial properties located in the United States comprising approximately 18.3 million square feet. It included assets wholly-owned by the Company and assets owned by two joint ventures (see Net Lease Venture and Net Lease Venture II below) managed by the Company and in which it owned 51.9 % interests . At the time of closing, the portfolio was encumbered by an aggregate of $ 702.0 million of mortgage indebtedness, including indebtedness from equity method investments, which was repaid with proceeds from the sale. After repayment of the mortgage indebtedness and prepayment penalties, a senior term loan secured by certain of the assets (refer to Note 10), payments to terminate derivative contracts, payments to joint venture partners, and payments of promotes, transaction expenses and amounts due under employee incentive plans, the Company retained net cash proceeds of $ 1.2 billion from the transaction. In addition, as part of the transaction, the buyer sold three of the properties 12 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents to SAFE for $ 122.0 million and entered into three Ground Leases with SAFE. Two net lease properties were sold to different third parties in the first quarter of 2022 and the Company’s net lease assets associated with its Ground Lease businesses were not included in the sale. The Company received net cash proceeds of $ 33.9 million from the sale of the two net lease properties and recognized a gain of $ 23.9 million in “Net income from discontinued operations” in the Company’s consolidated statements of operations. ​ 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 was 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 was substantially devoted to the Net Lease Venture owned a total of 0.6 % equity ownership in the venture via co-investment. These senior executives were also entitled to an amount equal to 50 % of any incentive fee received based on the 47.5 % external partner’s interest. Net Lease Venture was part of the Net Lease Sale. As of September 30, 2022, $ 3.1 million of “Noncontrolling interests” was attributable to the Net Lease Venture and represented proceeds from the Net Lease Sale that were not yet distributed to the Company’s partners in the venture as of September 30, 2022. ​ Net Lease Venture II —In July 2018, the Company entered into a new venture (the “Net Lease Venture II”) with an investment strategy similar to the Net Lease Venture. The Company was responsible for managing the venture in exchange for a management fee and incentive fee. During the nine months ended September 30, 2022, the Company recorded $ 0.4 million of management fees from Net Lease Venture II in “Net income from discontinued operations” in the Company’s consolidated statements of operations. During the three and nine months ended September 30, 2021, the Company recorded $ 0.4 million and $ 1.2 million, respectively, of management fees from Net Lease Venture II in “Net income from discontinued operations” in the Company’s consolidated statements of operations. Net Lease Venture II was part of the Net Lease Sale. As of September 30, 2022, $ 2.0 million of “Real estate and other assets available and held for sale and classified as discontinued operations” was attributable to the Net Lease Venture II and represented proceeds from the Net Lease Sale that were not yet distributed to the Company as of September 30, 2022. ​ Discontinued Operations — The Company’s net lease assets and liabilities associated with the Net Lease Sale and the Company’s other two net lease assets are classified as “Real estate and other assets available and held for sale and classified as discontinued operations” and “Liabilities associated with real estate held for sale and classified as discontinued operations,” respectively, on the Company’s consolidated balance sheets as of September 30, 2022 and December 31, 2021. For the three months ended September 30, 2021 and the nine months ended September 30, 2022 and 2021, the operations of such assets are classified in “Net income from discontinued operations” in the Company’s consolidated statements of operations. ​ 13 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The following table presents the Company’s consolidated assets and liabilities recorded in “Real estate and other assets available and held for sale and classified as discontinued operations” and “Liabilities associated with real estate held for sale and classified as discontinued operations,” respectively, on the Company’s consolidated balance sheets as of September 30, 2022 and December 31, 2021 ($ in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2022 2021 ​ ASSETS ​ ​ ​ ​ Real estate ​ ​ ​ ​ Real estate, at cost ​ $ — ​ $ 1,537,655 ​ Less: accumulated depreciation ​ — ​ ( 271,183 ) ​ Total real estate, net ​ — ​ 1,266,472 ​ Net investment in leases ​ — ​ 486,389 ​ Loans receivable held for sale ​ ​ — ​ ​ 48,675 ​ Other investments ​ 1,963 ​ 103,229 ​ Finance lease right of use assets ​ ​ — ​ ​ 150,099 ​ Accrued interest and operating lease income receivable, net ​ 491 ​ 2,997 ​ Deferred operating lease income receivable, net ​ — ​ 63,156 ​ Deferred expenses and other assets, net ​ 9,471 ​ 178,694 ​ Total real estate and other assets available and held for sale and classified as discontinued operations ​ $ 11,925 ​ $ 2,299,711 ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 2,918 ​ $ 92,865 ​ Finance lease liabilities ​ ​ — ​ ​ 161,258 ​ Debt obligations, net ​ — ​ 714,296 ​ Total liabilities associated with real estate held for sale and classified as discontinued operations ​ $ 2,918 ​ $ 968,419 ​ ​ 14 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents The transaction described above involving the Company's net lease business qualified for discontinued operations and the following table summarizes net income from discontinued operations for the three and nine months ended September 30, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, ​ ​ 2022 2021 2022 2021 ​ Revenues: ​ ​ ​ ​ ​ ​ Operating lease income ​ $ — ​ $ 40,660 ​ $ 35,596 ​ $ 123,925 ​ Interest income ​ — ​ 979 ​ 885 ​ 2,728 ​ Interest income from sales-type leases ​ — ​ 9,052 ​ 8,803 ​ 26,212 ​ Other income ​ — ​ 1,162 ​ 4,292 ​ 3,599 ​ Total revenues ​ — ​ 51,853 ​ 49,576 ​ 156,464 ​ Costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense (1) ​ — ​ 10,776 ​ 7,484 ​ 32,306 ​ Real estate expense ​ — ​ 5,355 ​ 5,072 ​ 20,503 ​ Depreciation and amortization (1) ​ — ​ 13,114 ​ — ​ 39,256 ​ Provision for (recovery of) loan losses ​ ​ — ​ ​ 54 ​ ​ — ​ ​ ( 202 ) ​ Provision for (recovery of) losses on net investment in leases ​ — ​ 446 ​ — ​ ( 2,200 ) ​ Impairment of assets (2) ​ — ​ 758 ​ 1,492 ​ 2,286 ​ Other expense (3) ​ — ​ 1,117 ​ ( 5,669 ) ​ 1,117 ​ Total costs and expenses ​ — ​ 31,620 ​ 8,379 ​ 93,066 ​ Income from sales of real estate ​ — ​ — ​ 683,738 ​ 2,114 ​ Income from discontinued operations before earnings from equity method investments and other items ​ — ​ 20,233 ​ 724,935 ​ 65,512 ​ Earnings from equity method investments ​ — ​ 1,414 ​ 127,129 ​ 4,014 ​ Loss on early extinguishment of debt, net ​ — ​ — ​ ( 41,408 ) ​ — ​ Net income from discontinued operations before income taxes ​ — ​ 21,647 ​ 810,656 ​ 69,526 ​ Income tax expense ​ — ​ ( 33 ) ​ ( 12,968 ) ​ ( 111 ) ​ Net income from discontinued operations ​ — ​ 21,614 ​ 797,688 ​ 69,415 ​ Net (income) from discontinued operations attributable to noncontrolling interests ​ — ​ ( 3,254 ) ​ ( 179,089 ) ​ ( 8,092 ) ​ Net income from discontinued operations attributable to iStar Inc. ​ $ — ​ $ 18,360 ​ $ 618,599 ​ $ 61,323 ​ (1) For the nine months ended September 30, 2022, the Company recorded $ 1.3 million of “Interest expense” in its consolidated statements of operations from its Ground Leases with SAFE. For the three and nine months ended September 30, 2021, the Company recorded $ 2.1 million and $ 6.2 million, respectively, of “Interest expense” and $ 0.4 million and $ 1.1 million, respectively, of “Depreciation and amortization” in its consolidated statements of operations from its Ground Leases with SAFE. (2) During the nine months ended September 30, 2022 and 2021, the Company sold assets and recognized aggregate impairments of $ 1.5 million and $ 2.3 million, respectively. (3) Represents the reversal of other expenses recognized in connection with the settlement of interest rate hedges during the nine months ended September 30, 2022. 15 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents ​ The following table presents cash flows provided by operating activities and cash flows used in investing activities from discontinued operations for the nine months ended September 30, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, ​ ​ 2022 2021 Cash flows provided by operating activities ​ $ 116,738 ​ $ 70,936 Cash flows provided by (used in) investing activities ​ 2,660,531 ​ ( 12,145 ) ​ New Accounting Pronouncements — In March 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 was issued to eliminate troubled debt restructuring recognition and measurement guidance and required disclosure of gross write-offs by vintage for public business entities. ASU 2022-02 is effective for annual reporting periods beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the impact of ASU 2022-02 and does not expect ASU 2022-02 to have a material impact on the Company’s consolidated financial statements. ​ Note 4—Real Estate The Company’s real estate assets were comprised of the following ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2022 December 31, 2021 Land, at cost ​ $ 6,830 ​ $ 6,831 Buildings and improvements, at cost ​ 104,889 ​ 106,679 Less: accumulated depreciation ​ ( 22,575 ) ​ ( 21,360 ) Real estate, net ​ 89,144 ​ 92,150 Real estate available and held for sale (1) ​ 1,283 ​ 301 Total real estate ​ $ 90,427 ​ $ 92,451 (1) As of September 30, 2022 and December 31, 2021, the Company had $ 1.3 million and $ 0.3 million, respectively, of residential homes/condominiums available for sale in its operating properties portfolio. Dispositions— Refer to Note 3 - Net Lease Sale and Discontinued Operations. Impairments— During the nine months ended September 30, 2022, the Company recognized an impairment of $ 1.8 million on an operating property based on the expected cash flows to be received. 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 $ 0.9 million and $ 2.4 million for the three and nine months ended September 30, 2022, respectively, and $ 0.6 million and $ 2.0 million for the three and nine months ended September 30, 2021, respectively . These amounts are included in “Operating lease income” in the Company’s consolidated statements of operations. Allowance for Doubtful Accounts— As of December 31, 2021, the allowance for doubtful accounts related to real estate tenant receivables was $ 0.1 million. These amounts are included in “Accrued interest and operating lease income receivable, net” on the Company’s consolidated balance sheets. 16 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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 September 30, 2022, are as follows by year ($ in thousands): ​ ​ ​ ​ ​ Operating Year ​ Properties 2022 (remaining three months) ​ $ 1,649 2023 ​ 6,459 2024 ​ 6,348 2025 ​ 5,698 2026 ​ 5,200 Thereafter ​ 4,413 ​ ​ 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 was recorded in “Net investment in leases” on the Company’s consolidated balance sheet at the time of acquisition. In January 2022, the Company sold the Ground Lease to an investment fund in which the Company owns a 53 % noncontrolling interest (refer to Note 8 – Ground Lease Plus Fund). One Ground Lease was entered into with the seller of the land and did not qualify for sale leaseback accounting, and as such, was accounted for as a financing transaction and $ 42.0 million was recorded in “Loans receivable held for sale” on the Company’s consolidated balance sheet at the time of acquisition. 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 January 2022, the Company sold the Ground Lease to the Ground Lease Plus Fund (refer to Note 8). In January 2022, the Company entered into a commitment to acquire land for $ 36.0 million and simultaneously structured and entered into a Ground Lease as part of the Ground Lease tenant’s recapitalization of an existing multifamily property. The Company funded $ 34.6 million of its commitment and then, pursuant to an agreement with SAFE (refer to Note 8) and upon certain construction related conditions being met, sold the Ground Lease to SAFE in July 2022 for $ 36.0 million and recognized a gain of $ 1.0 million in “Income from sales of real estate” in its consolidated statements of operations. The Company’s net investment in leases were comprised of the following as of September 30, 2022 and December 31, 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 December 31, 2021 Total undiscounted cash flows ​ $ — ​ $ 524,712 Unguaranteed estimated residual value ​ — ​ 42,000 Present value discount ​ — ​ ( 523,497 ) Net investment in leases (1) ​ $ — ​ $ 43,215 (1) As of December 31, 2021, the Company’s net investment in lease was current in its payment status and performing in accordance with the terms of the lease. 17 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 nine months ended September 30, 2022 and 2021 were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, 2022 ​ September 30, 2021 ​ September 30, 2022 September 30, 2021 ​ Allowance for losses on net investment in leases at beginning of period (1) $ 380 ​ $ 9,005 $ — ​ $ 10,871 Provision for (recovery of) losses on net investment in leases (2) ​ ​ ( 380 ) ​ ​ 131 ​ ​ — ​ ​ ( 1,735 ) ​ Allowance for losses on net investment in leases at end of period (1) ​ $ — ​ $ 9,136 ​ $ — ​ $ 9,136 ​ (1) All 2021 amounts were for net investment in leases included in the Net Lease Sale (refer to Note 3 – Net Lease Sale and Discontinued Operations). (2) During the three and nine months ended September 30, 2022, the Company recorded a provision for (recovery of) losses on net investment in leases of ($ 0.4 ) million and $ 0.0 million, respectively, due primarily to asset sales . During the three and nine months ended September 30, 2021, the Company recorded a provision for (recovery of) losses on net investment in leases of $ 0.1 million and ( $ 1.7 ) million (both of which are included in “Net income from discontinued operations”), respectively. The provision for losses for the three months ended September 30, 2021 resulted from market changes since June 30, 2021 and the recovery of losses for the nine months ended September 30, 2021 was due primarily to asset sales and an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. ​ Note 6—Land and Development The Company’s land and development assets were comprised of the following ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 2021 ​ Land and land development, at cost ​ $ 259,732 ​ $ 297,621 ​ Less: accumulated depreciation ​ ( 11,486 ) ​ ( 10,811 ) ​ Total land and development, net ​ $ 248,246 ​ $ 286,810 ​ ​ Dispositions— During the nine months ended September 30, 2022 and 2021, the Company sold land parcels and residential lots and units and recognized land development revenue of $ 54.4 million and $ 157.9 million, respectively. During the nine months ended September 30, 2022 and 2021, the Company recognized land development cost of sales of $ 55.4 million and $ 147.5 million, respectively, from its land and development portfolio. ​ 18 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 ​ ​ September 30, 2022 December 31, 2021 ​ Construction loans ​ ​ ​ ​ ​ ​ ​ Senior mortgages ​ $ 133,468 ​ $ 184,643 ​ Corporate/Partnership loans ​ — ​ 618 ​ Subtotal - gross carrying value of construction loans (1) ​ 133,468 ​ 185,261 ​ Loans ​ ​ ​ Senior mortgages ​ — ​ 14,965 ​ Subordinate mortgages ​ 13,107 ​ 12,457 ​ Subtotal - gross carrying value of loans ​ 13,107 ​ 27,422 ​ Other lending investments ​ ​ ​ Held-to-maturity debt securities ​ 32,938 ​ 96,838 ​ Available-for-sale debt securities ​ — ​ 28,092 ​ Subtotal - other lending investments ​ 32,938 ​ 124,930 ​ Total gross carrying value of loans receivable and other lending investments ​ 179,513 ​ 337,613 ​ Allowance for loan losses ​ ( 2,890 ) ​ ( 4,769 ) ​ Total loans receivable and other lending investments, net ​ $ 176,623 ​ $ 332,844 ​ (1) As of September 30, 2022, 100 % 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 September 30, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General Allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ Maturity Debt ​ Specific ​ ​ ​ Three Months Ended September 30, 2022 ​ Loans ​ Loans ​ Securities ​ Allowance ​ Total Allowance for loan losses at beginning of period ​ $ 861 ​ $ 450 ​ $ 1,014 ​ $ 708 ​ $ 3,033 Provision for (recovery of) loan losses (1) ​ ( 13 ) ​ ( 72 ) ​ ( 67 ) ​ 9 ​ ( 143 ) Allowance for loan losses at end of period ​ $ 848 ​ $ 378 ​ $ 947 ​ $ 717 ​ $ 2,890 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses at beginning of period ​ $ 1,640 ​ $ 1,619 ​ $ 2,393 ​ $ 590 ​ $ 6,242 Provision for (recovery of) loan losses (1) ​ ( 149 ) ​ ( 865 ) ​ 145 ​ 50 ​ ( 819 ) Allowance for loan losses at end of period ​ $ 1,491 ​ $ 754 ​ $ 2,538 ​ $ 640 ​ $ 5,423 (1) During the three months ended September 30, 2022 and 2021, the Company recorded a provision for (recovery of) loan losses of ($ 0.2 ) million and ( $ 1.6 ) million, respectively, in its consolidated statements of operations. The recovery in 2022 was due primarily to the repayment of loans during the three months ended September 30, 2022. The recovery in 2021 was d ue primarily to the repayment of loans during the three months ended September 30, 2021 and an improving macroeconomic forecast on commercial real estate markets since June 30, 2021. Of this amount, $ 0.9 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 .” ​ 19 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 nine months ended September 30, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General Allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ Maturity Debt ​ Specific ​ ​ ​ Nine Months Ended September 30, 2022 ​ Loans ​ Loans ​ Securities ​ Allowance ​ Total Allowance for loan losses at beginning of period ​ $ 1,213 ​ $ 676 ​ $ 2,304 ​ $ 576 ​ $ 4,769 Provision for (recovery of) loan losses (1) ​ ( 365 ) ​ ( 298 ) ​ 23,643 ​ 141 ​ 23,121 Charge-offs ​ — ​ — ​ ( 25,000 ) ​ — ​ ( 25,000 ) Allowance for loan losses at end of period ​ $ 848 ​ $ 378 ​ $ 947 ​ $ 717 ​ $ 2,890 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses at beginning of period ​ $ 6,541 ​ $ 1,643 ​ $ 3,093 ​ $ 743 ​ $ 12,020 Recovery of loan losses (1) ​ ( 5,050 ) ​ ( 889 ) ​ ( 555 ) ​ ( 103 ) ​ ( 6,597 ) Allowance for loan losses at end of period ​ $ 1,491 ​ $ 754 ​ $ 2,538 ​ $ 640 ​ $ 5,423 (1) During the nine months ended September 30, 2022 and 2021, the Company recorded a provision for (recovery of) loan losses of $ 22.6 million and ($ 7.4 ) million, respectively, in its consolidated statements of operations. The provision in 2022 was due primarily to a $ 25.0 million charge-off on the Company’s held-to-maturity debt security, which is now recorded at its expected repayment proceeds. The recovery in 2021 was d ue primarily to the repayment of loans during the nine months ended September 30, 2021 and an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. Of this amount, $ 0.9 million related to a recovery of credit losses for unfunded loan commitments and is recorded as a reduction to "Accounts payable, accrued expenses and other liabilities .” The Company’s investment in loans and other lending investments and the associated allowance for loan losses were as follows as of September 30, 2022 and December 31, 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually Collectively ​ ​ ​ ​ Evaluated for ​ Evaluated for ​ ​ ​ ​ ​ Impairment (1) ​ Impairment ​ Total As of September 30, 2022 ​ ​ ​ Construction loans (2) ​ $ 61,159 ​ $ 72,309 ​ $ 133,468 Loans (2) ​ — ​ 13,107 ​ 13,107 Held-to-maturity debt securities ​ — ​ 32,938 ​ 32,938 Less: Allowance for loan losses ​ ( 717 ) ​ ( 2,173 ) ​ ( 2,890 ) Total ​ $ 60,442 ​ $ 116,181 ​ $ 176,623 As of December 31, 2021 ​ ​ ​ Construction loans (2) ​ $ 59,640 ​ $ 125,621 ​ $ 185,261 Loans (2) ​ — ​ 27,422 ​ 27,422 Held-to-maturity debt securities ​ — ​ 96,838 ​ 96,838 Available-for-sale debt securities (3) ​ — ​ 28,092 ​ 28,092 Less: Allowance for loan losses ​ ( 576 ) ​ ( 4,193 ) ​ ( 4,769 ) Total ​ $ 59,064 ​ $ 273,780 ​ $ 332,844 (1) The carrying value of this loan includes an amortized exit fee of $ 0.8 million and $ 0.8 million as of September 30, 2022 and December 31, 2021, 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 includes unamortized discounts, premiums, deferred fees and costs totaling net premiums (discounts) of $ 0.3 million and ($ 0.2 ) million as of September 30, 2022 and December 31, 2021, respectively. (3) During the three and nine months ended September 30, 2022, the Company sold its available-for-sale securities and recognized a gain of $ 2.9 million, which is recorded in “Other income” in the Company’s consolidated statements of operations. Available-for-sale debt securities were evaluated for impairment under ASC 326-30 – Financial Instruments-Credit Losses . 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 20 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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. The Company’s amortized cost basis in performing senior mortgages, corporate/partnership loans and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of September 30, 2022 were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year of Origination ​ ​ 2022 2021 2020 2019 2018 Prior to 2018 Total Senior mortgages ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ — ​ — ​ — ​ — ​ 65,559 ​ — ​ 65,559 3.5 ​ — ​ — ​ — ​ — ​ 6,750 ​ — ​ 6,750 4.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal (1) ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 72,309 ​ $ — ​ $ 72,309 Subordinate mortgages ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ 1.0 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — 1.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 2.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 3.0 ​ — ​ — ​ — ​ — ​ — ​ 13,107 ​ 13,107 3.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 4.5 ​ — ​ — ​ — ​ — ​ — ​ — ​ — 5.0 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Subtotal ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 13,107 ​ $ 13,107 Total ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 72,309 ​ $ 13,107 ​ $ 85,416 (1) As of September 30, 2022, excludes $ 61.2 million for one loan on non-accrual status. The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less Than Greater ​ ​ ​ ​ ​ ​ ​ ​ ​ or Equal ​ Than ​ Total ​ ​ ​ ​ ​ Current ​ to 90 Days ​ 90 Days ​ Past Due ​ Total As of September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior mortgages ​ $ 72,309 ​ $ — ​ $ 61,159 ​ ​ 61,159 ​ $ 133,468 Subordinate mortgages ​ 13,107 ​ — ​ — ​ — ​ 13,107 Total ​ $ 85,416 ​ $ — ​ $ 61,159 ​ $ 61,159 ​ $ 146,575 As of December 31, 2021 ​ ​ ​ ​ ​ Senior mortgages ​ $ 139,968 ​ $ — ​ $ 59,640 ​ ​ 59,640 ​ $ 199,608 Corporate/Partnership loans ​ 618 ​ — ​ — ​ — ​ 618 Subordinate mortgages ​ 12,457 ​ — ​ — ​ — ​ 12,457 Total ​ $ 153,043 ​ $ — ​ $ 59,640 ​ $ 59,640 ​ $ 212,683 ​ 21 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Impaired Loans —The Company’s impaired loan was as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 As of December 31, 2021 ​ ​ ​ Unpaid ​ ​ ​ ​ Unpaid ​ ​ ​ ​ Amortized ​ Principal ​ Related ​ Amortized ​ Principal ​ Related ​ ​ Cost ​ Balance ​ Allowance ​ Cost ​ Balance ​ Allowance With an allowance recorded: ​ ​ ​ ​ ​ ​ ​ ​ Senior mortgages (1) ​ $ 61,159 ​ $ 60,409 ​ $ ( 717 ) ​ $ 59,640 ​ $ 58,888 ​ $ ( 576 ) Total ​ $ 61,159 ​ $ 60,409 ​ $ ( 717 ) ​ $ 59,640 ​ $ 58,888 ​ $ ( 576 ) (1) The Company has one non-accrual loan as of September 30, 2022 and December 31, 2021 that is considered impaired and included in the table above. The Company did no t record any interest income on impaired loans for the three and nine months ended September 30, 2022 and 2021. 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 provided for future funding obligations to the Ground Lease tenant 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 would acquire the ground lessor entity 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. Subsequent to closing, the Company funded approximately $ 6.0 million of the deferred purchase price to the Ground Lease tenant. The Company sold the ground lessor entity (and SAFE assumed all future funding obligations to the Ground Lease tenant) to SAFE in September 2021 for $ 22.1 million and recorded no gain or loss on the sale. 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, was accounted for as a financing transaction and $ 42.0 million was recorded in “Loans receivable held for sale” on the Company’s consolidated balance sheet at the time of acquisition. In January 2022, the Company sold its loan receivable held for sale to the Ground Lease Plus Fund (refer to Note 8). Other lending investments —Other lending investments includes the following securities ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ Net ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Estimated ​ Carrying ​ ​ Face Value ​ Cost Basis ​ Gain (Loss) ​ Fair Value ​ Value As of September 30, 2022 ​ ​ ​ ​ ​ Held-to-Maturity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt securities (1) ​ $ 32,938 ​ $ 32,938 ​ $ — ​ $ 32,938 ​ $ 32,938 Total ​ $ 32,938 ​ $ 32,938 ​ $ — ​ $ 32,938 ​ $ 32,938 As of December 31, 2021 ​ ​ ​ ​ ​ Available-for-Sale Securities ​ ​ ​ ​ ​ Municipal debt securities ​ $ 23,855 ​ $ 23,855 ​ $ 4,237 ​ $ 28,092 ​ $ 28,092 Held-to-Maturity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt securities ​ 100,000 ​ 96,838 ​ — ​ 96,838 ​ 96,838 Total ​ $ 123,855 ​ $ 120,693 ​ $ 4,237 ​ $ 124,930 ​ $ 124,930 (1) During the nine months ended September 30, 2022, the Company received a $ 40.0 million repayment, reduced the maturity date by nine months to December 30, 2022 and recorded a $ 25.0 million provision in ‘Provision for (recovery of) loan losses” in its consolidated statements of operations on its debt security. 22 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents ​ As of September 30, 2022, 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 ​ $ 32,938 ​ $ 32,938 ​ $ — ​ $ — After one year through 5 years ​ — ​ — ​ — ​ — After 5 years through 10 years ​ — ​ — ​ — ​ — After 10 years ​ — ​ — ​ — ​ — Total ​ $ 32,938 ​ $ 32,938 ​ $ — ​ $ — ​ ​ ​ 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 ​ Equity Method Investments ​ ​ as of ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ September 30, ​ December 31, ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 2022 2021 Real estate equity investments ​ ​ ​ ​ ​ ​ ​ ​ ​ SAFE (1) ​ $ 1,459,476 ​ $ 1,168,532 ​ $ 42,800 ​ $ 73,475 ​ $ 74,549 ​ $ 94,590 Ground Lease Plus Fund ​ 65,793 ​ 17,630 ​ 725 ​ — ​ 2,014 ​ — Other real estate equity investments (2) ​ 33,808 ​ 44,349 ​ 12,365 ​ 11,965 ​ 19,749 ​ 9,902 Subtotal ​ 1,559,077 ​ 1,230,511 ​ 55,890 ​ 85,440 ​ 96,312 ​ 104,492 Other strategic investments (3) ​ 46,191 ​ 66,770 ​ 1,907 ​ 2,355 ​ 5,910 ​ 6,169 Total ​ $ 1,605,268 ​ $ 1,297,281 ​ $ 57,797 ​ $ 87,795 ​ $ 102,222 ​ $ 110,661 (1) As of September 30, 2022, the Company owned 40.3 million shares of SAFE common stock which, based on the closing price of $ 26.46 on September 30, 2022, had a market value of $ 1.1 billion. Pursuant to ASC 323-10-40-1, an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment. Any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. For the three months ended September 30, 2021, equity in earnings includes a dilution gain of $ 60.2 million resulting from a SAFE equity offering. For the nine months ended September 30, 2022 and 2021, equity in earnings includes dilution gains of $ 0.9 million and $ 60.7 million, respectively, resulting from SAFE equity offerings. (2) During the three and nine months ended September 30, 2022, one of the Company’s real estate equity investments closed on the sale of a multifamily property. The Company received a distribution of $ 15.9 million from the sale and recognized a gain of $ 11.5 million in “Earnings from equity method investments” in the Company’s consolidated statements of operations. (3) During the three and nine months ended September 30, 2021, 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 – Investments – Equity Securities, the Company remeasured its equity investment at fair value and recognized mark-to-market gains of $ 14.0 million and $ 19.1 million, respectively, in “Other income” in the Company’s consolidated statements of operations. The Company’s equity security was redeemed at its carrying value in the fourth quarter of 2021. ​ Safehold Inc. —Refer to Note 1 – Merger with 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”). During the nine months ended September 30, 2022, the Company purchased 0.2 million shares of SAFE's common stock for $ 10.5 million, for an average cost of $ 66.83 per share, in open market purchases made in accordance with Rules 10b5-1 and 10b-18 under the Securities and Exchange Act of 1934, as amended. In March 2022, the Company 23 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents acquired 3,240,000 shares of SAFE’s common stock in a private placement for $ 191.2 million. As of September 30, 2022, the Company owned approximately 64.8 % 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 shareholders, 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 % ; and ● provides the Company certain preemptive rights. 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 September 30, 2022 and 2021, the Company recorded $ 5.3 million and $ 3.6 million, respectively, of management fees pursuant to its management agreement with SAFE. During the nine months ended September 30, 2022 and 2021, the Company recorded $ 15.0 million and $ 10.6 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. Historically, pursuant to the Company’s option under the management agreement, the Company has elected to not seek reimbursement for certain expenses. This historical election is not a waiver of reimbursement for similar expenses in future periods and the Company has started to elect to seek, and may further seek in the future, reimbursement of such additional expenses that it has not previously sought, including, without limitation, rent, overhead and certain personnel costs. During the three months ended September 30, 2022 and 2021, the Company recognized $ 3.1 million and $ 1.9 million, respectively, of expense reimbursements pursuant to its management agreement with SAFE. During the nine months ended 24 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents September 30, 2022 and 2021, the Company recognized $ 9.4 million and $ 5.6 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 for the periods presented, all of which were approved by the Company’s and SAFE’s independent directors: 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. The Company sold the Ground Lease to SAFE in September 2020 for $ 34.0 million and in January 2021 sold the leasehold first mortgage to an entity in which the Company has a 53 % noncontrolling equity interest (refer to “Other strategic investments” below) for $ 63.3 million. In June 2020, Net Lease Venture II (see Note 3) acquired the leasehold interest in an office laboratory property in Honolulu, HI and simultaneously entered into a 99-year Ground Lease with SAFE. In November 2021, the Company acquired the property from Net Lease Venture II. The Company paid $ 0.6 million to its partner to acquire its equity interest in the property and assumed a $ 44.4 million mortgage on the property. The Company sold the property in the first quarter of 2022. Prior to the sale, SAFE paid $ 0.3 million to terminate a purchase option that allowed the Company to purchase the land at the expiration of the Ground Lease. 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. The Company sold the loan in July 2021 and recorded no gain or loss on the 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. At closing, the Company entered into an agreement with SAFE pursuant to which, subject to certain conditions being met, SAFE would acquire the ground lessor entity from the Company. The Company sold the ground lessor entity to SAFE in September 2021 and recognized no gain or loss on the sale (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. The Company received $ 2.7 million of consideration from SAFE in connection with this transaction. In September 2021, the construction loan commitment and the $ 2.7 million of consideration was transferred to the Loan Fund (refer to “Other strategic investments” below). 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. In January 2022, the Company 25 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents sold the Ground Leases to the Ground Lease Plus Fund (see below). 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 Ground Lease Plus Fund. In November 2021, the Company and SAFE entered into an agreement pursuant to 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 is $ 33.3 million, plus an amount necessary for the Company to achieve the greater of a 1.25 x multiple and a 12 % return on its investment. In addition, the Ground Lease provides for a leasehold improvement allowance up to a maximum of $ 51.8 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 Lease or fund the leasehold improvement allowance. There can be no assurance that the conditions to closing will be satisfied and that SAFE will acquire the land and Ground Lease from the Ground Lease Plus Fund (refer to Ground Lease Plus Fund below). ​ In December 2021, the Company’s partner in a venture recapitalized an existing multifamily property, which included a Ground Lease provided by SAFE. As part of the recapitalization, the Company’s partner acquired its 50 % equity interest in the entity and the mezzanine loan held by the Company was repaid in full. During the three and nine months ended September 30, 2021, the Company recorded $ 0.6 million and $ 1.7 million, respectively, of interest income on the mezzanine loan. ​ In January 2022, the Company and SAFE entered into an agreement pursuant to which SAFE would acquire land and a related Ground Lease originated by the Company when certain construction related conditions are met. The Company sold the Ground Lease to SAFE in July 2022 for $ 36.0 million when the construction related conditions were met and recognized a gain of $ 1.0 million in “Income from sales of real estate” in its consolidated statements of operations. In February 2022, the Loan Fund (refer to Other Strategic Investments below) committed to provide a $ 130.0 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan is for the Ground Lease tenant’s recapitalization of a life science property. The Loan Fund received $ 9.0 million of consideration from SAFE in connection with this transaction. In April 2022, the Company exchanged its 50 % equity interest with a carrying value of $ 4.4 million in a venture that owned a hotel property for land underlying the property with an in-place Ground Lease valued at $ 9.0 million and recorded a gain of $ 4.6 million in “Earnings from equity method investments” in the consolidated statements of operations. Subsequently, the Company sold the Ground Lease on the land to SAFE for $ 9.0 million and did no t recognize any gain or loss on the sale. In June 2022, the Loan Fund (refer to Other Strategic Investments below) committed to provide a $ 105.0 million loan to the ground lessee of a Ground Lease originated at SAFE. The loan is for the Ground Lease tenant’s recapitalization of a mixed-use property. The Loan Fund received $ 5.0 million of consideration from SAFE in connection with this transaction. 26 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Ground Lease Plus Fund —The Company formed and manages an investment fund that targets the origination and acquisition of Ground Leases for commercial real estate projects that are in a pre-development phase (the “Ground Lease Plus Fund”). The Company owns a 53 % noncontrolling equity interest in the Ground Lease Plus Fund. The Company does not have a controlling interest in the Ground Lease Plus Fund due to the substantive participating rights of its partner and accounts for this investment as an equity method investment. In addition, the Ground Lease Plus Fund has first look rights through December 2023 on qualifying pre-development projects that SAFE has elected to not originate. In November 2021, the Company acquired land for $ 33.3 million and simultaneously structured and entered into a Ground Lease on which a multi-family project will be constructed. In December 2021, the Company sold the Ground Lease to the Ground Lease Plus Fund and recognized no gain or loss on the sale. The Company and SAFE entered into an agreement pursuant to which SAFE would acquire the land and related Ground Lease from the Ground Lease Plus Fund when certain construction related conditions are met by a specified time period (refer to “Safehold Inc.” above). In January 2022, the Company sold two Ground Leases to the Ground Lease Plus Fund (refer to Note 5) and recognized an aggregate $ 0.5 million of gains in “Income from sales of real estate” on the sale. The Company and SAFE entered into an agreement pursuant to which SAFE would acquire the land properties and related Ground Leases from the Ground Lease Plus Fund when certain construction related conditions are met by a specified time period (refer to “Safehold Inc.” above). Other real estate equity investments —As of September 30, 2022, the Company’s other real estate equity investments include equity interests in real estate ventures ranging from 48 % to 95 %, comprised of investments of $ 33.8 million in operating properties. As of December 31, 2021, the Company’s other real estate equity investments included $ 43.3 million in operating properties and $ 1.1 million in land assets. Other strategic investments —As of September 30, 2022 and December 31, 2021, 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 owns a 53.0 % noncontrolling equity interest (the “Loan Fund”). The Company did no t recognize any gain or loss on the sales. In September 2021, the Company transferred a $ 75.0 million construction loan commitment to the Loan Fund. The Company does not have a controlling interest in the Loan Fund 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. In February 2022, the Loan Fund committed to provide a $ 130.0 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 life science property. In June 2022, the Loan Fund committed to provide a $ 105.0 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 mixed-use property. 27 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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 September 30, 2022 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues Expenses Net Income Attributable to SAFE (1) For the Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ SAFE ​ $ 196,943 ​ $ 136,517 ​ $ 113,628 ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ SAFE ​ $ 135,001 ​ $ 88,585 ​ $ 51,844 ​ ​ (1) Net Income Attributable to SAFE also includes gain on sale of net investment in leases, earnings from equity method investments, loss on early extinguishment of debt and selling profit from sales-type leases. ​ 28 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): (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2022 December 31, 2021 ​ Other assets (2) ​ $ 20,048 ​ $ 16,040 ​ Operating lease right-of-use assets (3) ​ 17,104 ​ 20,437 ​ Restricted cash ​ 5,375 ​ 54,395 ​ Other receivables ​ 4,962 ​ 5,054 ​ Corporate furniture, fixtures and equipment, net (4) ​ 1,575 ​ 1,852 ​ Leasing costs, net (5) ​ 646 ​ 818 ​ Intangible assets, net (6) ​ ​ 334 ​ ​ 1,209 ​ Deferred financing fees, net ​ — ​ 629 ​ Deferred expenses and other assets, net ​ $ 50,044 ​ $ 100,434 ​ (1) Certain items have been reclassified to “Real estate and other assets available and held for sale and classified as discontinued operations” (refer to Note 3). (2) 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). (3) 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 September 30, 2022 and 2021, the Company recognized $ 1.2 million and $ 1.2 million, respectively, in "General and administrative" and $ 0.1 million and $ 0.2 million, respectively, in "Real estate expense" in its consolidated statements of operations relating to operating leases. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 3.6 million and $ 3.7 million, respectively, in "General and administrative" and $ 0.5 million and $ 0.5 million, respectively, in "Real estate expense" in its consolidated statements of operations relating to operating leases. (4) Accumulated depreciation on corporate furniture, fixtures and equipment was $ 12.2 million and $ 14.8 million as of September 30, 2022 and December 31, 2021, respectively. (5) Accumulated amortization of leasing costs was $ 0.5 million and $ 1.1 million as of September 30, 2022 and December 31, 2021, respectively. (6) 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 $ 0.1 million and $ 10.2 million as of September 30, 2022 and December 31, 2021, respectively. These intangible lease assets are amortized over the remaining term of the lease. The amortization expense for in-place leases for the three and nine months ended September 30, 2021 was $ 0.3 million and $ 0.9 million, respectively. This amount is included in “Depreciation and amortization” in the Company’s consolidated statements of operations. As of September 30, 2022, the weighted average remaining amortization period for the Company’s intangible assets was approximately 5.2 years. Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2022 December 31, 2021 ​ Accrued expenses ​ $ 70,428 ​ $ 151,810 ​ Accrued interest payable ​ 24,575 ​ 31,293 ​ Other liabilities (1) ​ ​ 26,867 ​ ​ 30,362 ​ Operating lease liabilities (see table above) ​ 19,006 ​ 23,267 ​ Accounts payable, accrued expenses and other liabilities ​ $ 140,876 ​ $ 236,732 ​ (1) As of September 30, 2022 and December 31, 2021, other liabilities includes $ 21.0 million and $ 20.1 million, respectively, of deferred income. As of December 31, 2021, other liabilities includes $ 0.1 million of expected credit losses for unfunded loan commitments. ​ ​ 29 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 10—Debt Obligations, net The Company’s debt obligations were as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Value as of ​ Stated ​ Scheduled ​ September 30, 2022 December 31, 2021 Interest Rates Maturity Date Secured credit facilities: ​ ​ ​ Revolving Credit Facility ​ $ — ​ $ — ​ LIBOR + 2.00 % (1) — Senior Term Loan ​ — ​ 491,875 ​ LIBOR + 2.75 % (2) — Total secured credit facilities ​ — ​ 491,875 ​ Unsecured notes: ​ ​ ​ 3.125 % senior convertible notes (3) ​ — ​ 287,500 ​ 3.125 % — 4.75 % senior notes (4) ​ 753,561 ​ 775,000 ​ 4.75 % October 2024 4.25 % senior notes (5) ​ 501,997 ​ 550,000 ​ 4.25 % August 2025 5.50 % senior notes (6) ​ 346,906 ​ 400,000 ​ 5.50 % February 2026 Total unsecured notes ​ 1,602,464 ​ 2,012,500 ​ Other debt obligations: ​ ​ ​ Trust preferred securities ​ 100,000 ​ 100,000 ​ LIBOR + 1.50 % October 2035 Total debt obligations ​ 1,702,464 ​ 2,604,375 ​ Debt discounts and deferred financing costs, net ​ ( 21,756 ) ​ ( 32,201 ) ​ Total debt obligations, net (7) ​ $ 1,680,708 ​ $ 2,572,174 ​ (1) The Revolving Credit Facility accrued 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 % . The Company terminated the Revolving Credit Facility in August 2022. (2) The loan accrued 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) During the three months ended September 30, 2022 and 2021, the Company recognized $ 0.3 million and $ 2.2 million, respectively, of contractual interest on the 3.125 % Convertible Notes. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 3.5 million and $ 6.7 million, respectively, of contractual interest on the 3.125 % Convertible Notes. (4) The Company can prepay these senior notes without penalty beginning July 1, 2024. (5) The Company can prepay these senior notes without penalty beginning May 1, 2025. (6) The Company can prepay these senior notes without penalty beginning August 15, 2024. (7) The Company capitalized interest relating to development activities of $ 0.4 million and $ 0.2 million during the three months ended September 30, 2022 and 2021, respectively, and $ 1.1 million and $ 0.6 million during the nine months ended September 30, 2022 and 2021, respectively. Future Scheduled Maturities —As of September 30, 2022, future scheduled maturities of outstanding debt obligations are as follows ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured Debt Secured Debt Total 2022 (remaining three months) ​ $ — ​ $ — ​ $ — 2023 ​ — ​ — ​ — 2024 ​ 753,561 ​ — ​ 753,561 2025 ​ 501,997 ​ — ​ 501,997 2026 ​ 346,906 ​ — ​ 346,906 Thereafter ​ 100,000 ​ — ​ 100,000 Total principal maturities ​ 1,702,464 ​ — ​ 1,702,464 Unamortized discounts and deferred financing costs, net ​ ( 21,756 ) ​ — ​ ( 21,756 ) Total debt obligations, net ​ $ 1,680,708 ​ $ — ​ $ 1,680,708 ​ 30 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Senior Term Loan —The Company had a $ 650.0 million senior term loan (the “Senior Term Loan”) that accrued interest at LIBOR plus 2.75 % per annum and matured in June 2023. The Senior Term Loan was secured by pledges of equity of certain subsidiaries that own a defined pool of assets. The Senior Term Loan permitted substitution of collateral, subject to overall collateral pool coverage and concentration limits, over the life of the facility. The Company repaid the Senior Term Loan in full in March 2022 using proceeds from the Net Lease Sale (refer to Note 3 - Net Lease Sale and Discontinued Operations). During the nine months ended September 30, 2022, the Company incurred a “Loss on extinguishment of debt” of $ 1.4 million in connection with the repayment of the Senior Term Loan. Revolving Credit Facility —The Company had a secured revolving credit facility with a maximum capacity of $ 350.0 million and a maturity of September 2022 (the “Revolving Credit Facility”). The Company terminated the Revolving Credit Facility in August 2022. Outstanding borrowings under the Revolving Credit Facility were secured by pledges of the equity interests in the Company’s subsidiaries that own a defined pool of assets. Borrowings under this credit facility accrued interest at a floating rate indexed to one of several base rates plus a margin which adjusted 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 was an undrawn credit facility commitment fee that ranges from 0.25 % to 0.45 %, based on corporate credit ratings. Unsecured Notes —As of September 30, 2022, the Company has senior unsecured notes outstanding with varying fixed-rates and maturities ranging from October 2024 to February 2026. In connection with the Net Lease Sale, in the fourth quarter 2021, the Company obtained the consents of holders of its outstanding 4.75 % senior notes due 2024, 4.25 % senior notes due 2025 and 5.50 % senior notes due 2026 to certain amendments to the indentures governing the notes intended to align the indentures with the sale of the Company's net lease assets. The Company paid holders consent fees ranging from 0.75 % to 1.00 % of the principal amount of consenting notes, depending on the relevant series. 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). 3.125% Senior Convertible Notes —In April 2022, the Company completed separate, privately-negotiated transactions with holders of $ 194 million aggregate principal amount of the Company's 3.125 % Convertible Notes in which the noteholders exchanged their convertible notes with the Company for 13.75 million newly issued shares of the Company's common stock and aggregate cash payments of $ 14 million. The 3.125 % Convertible Senior Notes received by the Company were retired. The Company recognized a net increase in shareholders’ equity of $ 180.6 million inclusive of a $ 118.1 million loss on extinguishment of debt in connection with these transactions. In July and August 2022, the Company completed a series of privately-negotiated exchange transactions with holders of approximately $ 80.9 million aggregate principal amount of the Company's 3.125 % Convertible Notes in which the noteholders exchanged their convertible notes with the Company for an aggregate of approximately 3.3 million newly issued shares of the Company's common stock and aggregate cash payments of approximately $ 43.6 million inclusive of accrued interest. The convertible notes received by the Company were retired. The Company recognized a net increase in shareholders’ equity of $ 38.2 million inclusive of a $ 12.1 million loss on extinguishment of debt in connection with these transactions. In September 2022, the holders of approximately $ 11.7 million aggregate principal amount of the Company's 3.125 % Convertible Notes executed their conversion rights under the notes and exchanged their convertible notes with the Company for an aggregate of approximately 92,011 newly issued shares of the Company's common stock and aggregate cash payments of approximately $ 11.7 million. The convertible notes received by the Company were retired. The Company also repaid $ 0.5 million principal amount of its 3.125 % Convertible Notes for cash at maturity. 4.75% Senior Notes —In April 2022, the Company redeemed $ 7.1 million principal amount of its 4.75 % senior notes due October 2024 for $ 7.2 million. The Company recognized a $ 0.2 million loss on extinguishment of debt in connection with these transactions. In July and August 2022, the Company redeemed an aggregate $ 14.4 million principal amount of its senior notes due October 2024 for $ 14.5 million. The Company recognized a $ 0.3 million net loss on extinguishment of debt in connection with these transactions. 31 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 5.50% Senior Notes —In June 2022, the Company redeemed $ 53.1 million principal amount of its 5.50 % senior notes due February 2026 for $ 50.6 million. The Company recognized a $ 1.7 million net gain on extinguishment of debt in connection with these transactions. 4.25% Senior Notes — In August and September 2022, the Company redeemed an aggregate $ 48.0 million principal amount of its senior notes due August 2025 for $ 48.1 million. The Company recognized a $ 0.7 million loss on extinguishment of debt in connection with these transactions. 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 1.3 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. Note 11—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 September 30, 2022, 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 ​ $ 717 ​ $ 270 ​ $ 147,405 ​ $ 148,392 Strategic Investments ​ — ​ 3,161 ​ 4,907 ​ 8,068 Total ​ $ 717 ​ $ 3,431 ​ $ 152,312 ​ $ 156,460 ​ ​ 32 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Other Commitments —Future minimum lease obligations under non-cancelable operating leases as of September 30, 2022 are as follows ($ in thousands): (1) ​ ​ ​ ​ 2022 (remaining three months) ​ $ 1,628 2023 ​ 6,295 2024 ​ 6,178 2025 ​ 6,166 2026 ​ 142 Thereafter ​ 162 Total undiscounted cash flows ​ 20,571 Present value discount (1) ​ ( 1,565 ) Lease liabilities ​ $ 19,006 (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 4.7 % and the weighted average remaining lease term is 3.9 years. During the three months ended September 30, 2022 and 2021, the Company made payments of $ 1.6 million and $ 0.8 million, respectively, related to its operating leases and during the three months ended September 30, 2021 made payments of $ 1.3 million related to finance leases with SAFE. During the nine months ended September 30, 2022 and 2021, the Company made payments of $ 5.0 million and $ 2.1 million, respectively, related to its operating leases and $ 1.3 million and $ 4.1 million, respectively, related to finance leases with SAFE. ​ 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 12—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. 33 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents 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 September 30, 2022 and December 31, 2021 ($ in thousands): (1) ​ ​ ​ ​ ​ ​ ​ Derivative Liabilities ​ ​ Balance Sheet ​ Fair As of September 30, 2022 Location Value Derivatives Designated in Hedging Relationships ​ ​ ​ ​ ​ Interest rate swaps Liabilities associated with real estate held for sale and classified as discontinued operations ​ $ — Total ​ $ — ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ Derivatives Designated in Hedging Relationships ​ Interest rate swaps Liabilities associated with real estate held for sale and classified as discontinued operations ​ $ 8,395 Total ​ $ 8,395 (1) Over the next 12 months, the Company expects that $ 2.4 million related to its proportionate share of cash flow hedges held by SAFE will be reclassified from “Accumulated other comprehensive income (loss)” as a decrease to earnings from equity method investments. 34 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 September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps Earnings from equity method investments ​ $ 12,026 ​ $ ( 562 ) For the Three Months Ended September 30, 2021 ​ ​ Interest rate swaps Net income from discontinued operations ​ $ 273 ​ $ ( 2,050 ) Interest rate swaps Earnings from equity method investments ​ — ​ ( 633 ) For the Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps Earnings from equity method investments ​ $ 19,163 ​ $ ( 1,763 ) For the Nine Months Ended September 30, 2021 ​ ​ Interest rate swaps Net income from discontinued operations ​ $ 2,845 ​ $ ( 6,183 ) Interest rate swaps Earnings from equity method investments ​ 8,638 ​ ( 1,324 ) ​ ​ ​ 35 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 13—Equity Preferred Stock —The Company had the following series of Cumulative Redeemable Preferred Stock outstanding as of September 30, 2022 and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ 6.0 million, $ 4.6 million and $ 7.0 million on its Series D, G and I Cumulative Redeemable Preferred Stock during both the nine months ended September 30, 2022 and 2021. The character of the 2021 dividends was 100 % capital gain distribution, of which 18.31 % represented unrecaptured section 1250 gain. (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, 2021, the Company had $ 614.6 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, except for $ 154 million of NOL which never expires. 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 permits 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 $ 30.1 million, or $ 0.375 per share, for the nine months ended September 30, 2022 and $ 26.3 million, or $ 0.36 per share, for the nine months ended September 30, 2021. The character of the 2021 dividends was 100 % capital gain distribution, of which 18.31 % represented unrecaptured section 1250 gain. ​ Stock Repurchase Program —The Company may repurchase shares in negotiated transactions or open market transactions, including through one or more trading plans. The Company did not repurchase any shares of its common stock during the nine months ended September 30, 2022. During the nine months ended September 30, 2021, the Company repurchased 4.2 million shares of its outstanding common stock for $ 91.9 million, for an average cost of $ 21.70 per share. The Company is generally authorized to repurchase up to $ 50.0 million in shares of its common stock and in February 2022, the Company's Board of Directors authorized an increase to the stock repurchase program to $ 50.0 million. As of September 30, 2022, the Company had remaining authorization to repurchase up to $ 50.0 million of common stock under its stock repurchase program. 36 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 ​ ​ September 30, 2022 December 31, 2021 ​ Unrealized gains on available-for-sale securities ​ $ — $ 4,237 ​ Unrealized losses on cash flow hedges ​ ( 4,898 ) ​ ( 25,824 ) ​ Accumulated other comprehensive loss ​ $ ( 4,898 ) ​ $ ( 21,587 ) ​ ​ ​ Note 14—Stock-Based Compensation Plans and Employee Benefits Stock-Based Compensation —The Company recorded stock-based compensation, including the expense related to performance incentive plans (see below), of ($ 0.4 ) million and $ 3.0 million for the three months ended September 30, 2022 and 2021, respectively, and ($ 30.7 ) million and $ 23.3 million for the nine months ended September 30, 2022 and 2021, 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 September 30, 2022, 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 nine months ended September 30, 2022 and 2021, the Company recorded $ 3.5 million and $ 2.6 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 nine months ended September 30, 2022. ​ ​ ​ ​ ​ ​ ​ iPIP Investment Pool ​ 2019-2020 2021-2022 Points at beginning of period 95.20 84.75 Granted ​ — ​ 7.95 Forfeited — ( 0.95 ) Points at end of period 95.20 91.75 ​ As of September 30, 2022, investments with an aggregate gross book value of $ 764 million, including 26.7 million shares of SAFE common stock acquired by the Company, were attributable to the 2019-2020 Plan and investments with 37 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents an aggregate gross book value of $ 406 million, including 5.0 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 nine months ended September 30, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ iPIP Investment Pool ​ 2013 ‑ 2014 2015 ‑ 2016 (1) 2017 ‑ 2018 Points at beginning of period 80.17 70.40 75.34 Granted ​ — ​ — ​ — Points at end of period 80.17 70.40 75.34 (1) As of September 30, 2022, all awards under the 2015-2016 Plan had been paid. During the nine months ended September 30, 2022, the Company recorded a $ 39.0 million reduction of expense related to the 2013-2018 iPIP plans, primarily due to a decrease in the price per share of SAFE common stock. During the nine months ended September 30, 2021, the Company recorded $ 15.0 million of expense related to the 2013-2018 iPIP plans. As of September 30, 2022, investments with an aggregate gross book value of $ 13 million were attributable to the 2013-2014 Plan and investments with an aggregate gross book value of $ 236 million, including 7.6 million shares of SAFE common stock acquired by the Company, were attributable to the 2017-2018 Plan. As of September 30, 2022 there were no investments attributable to the 2015-2016 Plan. During the nine months ended September 30, 2022, the Company made distributions to participants in the 2013-2014 investment pool. The iPIP participants received total distributions in the amount of $ 19.6 million as compensation, comprised of cash and 412,041 shares of the Company’s common stock with a fair value of $ 16.06 per share, which are fully-vested and issued under the 2009 LTIP. After deducting statutory minimum tax withholdings, a total of 215,657 shares of the Company’s common stock were issued. During the nine months ended September 30, 2022, the Company made distributions to participants in the 2015-2016 investment pool. The iPIP participants received total distributions in the amount of $ 19.2 million as compensation, comprised of cash and 402,731 shares of the Company’s common stock with a fair value of $ 16.06 per share, which are fully-vested and issued under the 2009 LTIP. After deducting statutory minimum tax withholdings, a total of 193,416 shares of the Company’s common stock were issued. During the nine months ended September 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. After deducting statutory minimum tax withholdings, a total of 57,920 shares of the Company’s common stock were issued. 38 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents As of September 30, 2022 and December 31, 2021, the Company had accrued compensation costs relating to iPIP of $ 45.1 million and $ 116.6 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 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 September 30, 2022, an aggregate of 2.3 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 nine months ended September 30, 2022, is as follows (in thousands): ​ ​ ​ Nonvested at beginning of period ​ 754 Granted ​ 221 Vested ​ ( 316 ) Forfeited ​ ( 19 ) Nonvested at end of period 640 ​ As of September 30, 2022, there was $ 6.5 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 1.33 years. Directors’ Awards — During the nine months ended September 30, 2022, the Company granted 38,953 restricted shares of common stock to non-employee Directors at a fair value of $ 16.33 at the time of grant for their annual equity awards and also issued 2,193 common stock equivalents (“CSEs”) at a fair value of $ 15.79 per CSE in respect of dividend equivalents on outstanding CSEs. As of September 30, 2022, a combined total of 132,896 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 $ 1.2 million. 401(k) Plan — The Company made contributions of $ 0.1 million and $ 0.1 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.0 million and $ 0.8 million for the nine months ended September 30, 2022 and 2021, respectively, to the Company’s 401(k) Plan. ​ 39 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents ​ ​ Note 15—Earnings Per Share The following table presents a reconciliation of income from operations used in the basic and diluted earnings per share (“EPS”) calculations ($ in thousands, except for per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, ​ ​ 2022 2021 2022 2021 ​ Net income (loss) from continuing operations ​ $ 17,952 ​ $ 109,380 ​ $ ( 116,430 ) ​ $ 58,152 ​ Net (income) loss from continuing operations attributable to noncontrolling interests ​ 53 ​ ( 10 ) ​ ( 46 ) ​ 55 ​ Preferred dividends ​ ( 5,874 ) ​ ( 5,874 ) ​ ( 17,622 ) ​ ( 17,622 ) ​ Net income (loss) from continuing operations and allocable to common shareholders for basic and diluted earnings per common share ​ $ 12,131 ​ $ 103,496 ​ $ ( 134,098 ) ​ $ 40,585 ​ ​ ​ 40 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, ​ ​ 2022 2021 2022 2021 ​ Earnings allocable to common shares: ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ Net income (loss) from continuing operations and allocable to common shareholders ​ $ 12,131 ​ $ 103,496 ​ $ ( 134,098 ) ​ $ 40,585 ​ Net income from discontinued operations ​ ​ — ​ ​ 21,614 ​ ​ 797,688 ​ ​ 69,415 ​ Net (income) from discontinued operations attributable to noncontrolling interests ​ ​ — ​ ​ ( 3,254 ) ​ ​ ( 179,089 ) ​ ​ ( 8,092 ) ​ Net income allocable to common shareholders ​ $ 12,131 ​ $ 121,856 ​ $ 484,501 ​ $ 101,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for basic and diluted earnings per share: ​ ​ ​ ​ ​ Weighted average common shares outstanding for basic earnings per common share ​ ​ 85,458 ​ ​ 71,299 ​ ​ 78,706 ​ ​ 72,675 ​ Add: Effect of assumed shares issued under treasury stock method for restricted stock units ​ ​ 76 ​ ​ 221 ​ ​ — ​ ​ 206 ​ Add: Effect of convertible debt ​ ​ 333 ​ ​ 8,967 ​ ​ — ​ ​ 5,521 ​ Weighted average common shares outstanding for basic and diluted earnings per common share ​ 85,867 ​ 80,487 ​ 78,706 ​ 78,402 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per common share: (1) ​ ​ ​ ​ ​ Net income (loss) from continuing operations and allocable to common shareholders ​ $ 0.14 ​ $ 1.45 ​ $ ( 1.70 ) ​ $ 0.56 ​ Net income from discontinued operations and allocable to common shareholders ​ ​ — ​ ​ 0.26 ​ ​ 7.86 ​ ​ 0.84 ​ Net income allocable to common shareholders ​ $ 0.14 ​ $ 1.71 ​ $ 6.16 ​ $ 1.40 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share: (1) ​ ​ ​ ​ ​ Net income (loss) from continuing operations and allocable to common shareholders ​ $ 0.14 ​ $ 1.28 ​ $ ( 1.70 ) ​ $ 0.52 ​ Net income from discontinued operations and allocable to common shareholders ​ ​ — ​ ​ 0.23 ​ ​ 7.86 ​ ​ 0.78 ​ Net income allocable to common shareholders ​ $ 0.14 ​ $ 1.51 ​ $ 6.16 ​ $ 1.30 ​ (1) For the nine months ended September 30, 2022, the Company’s restricted stock awards were anti-dilutive due to the Company having a net loss from continuing operations and allocable to common shareholders for the period. For the nine months ended September 30, 2022, 3,649,934 shares of the 3.125 % Convertible Notes were antidilutive due to the Company having a net loss from continuing operations and allocable to common shareholders for the period. ​ 41 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Note 16—Fair Values Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Certain of the Company’s assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis. The Company did not have any assets or liabilities recorded at fair value as of September 30, 2022. The following fair value hierarchy table summarizes the Company’s assets and liabilities recorded at fair value on a recurring basis by the above categories as of December 31, 2021 ($ 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 December 31, 2021 ​ ​ ​ ​ Recurring basis: ​ ​ ​ ​ Derivative liabilities (1) ​ $ 8,395 $ — $ 8,395 $ — Available-for-sale securities (1) ​ ​ 28,092 ​ ​ — ​ ​ — ​ ​ 28,092 (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 (refer to Note 7) are based upon unadjusted third-party broker quotes and are classified as Level 3. ​ ​ 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 nine months ended September 30, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Beginning balance ​ $ 28,092 ​ $ 25,274 Purchases ​ ​ — ​ ​ 3,375 Sales and Repayments ​ ( 26,752 ) ​ ( 201 ) Realized gain recorded in other income ​ ​ 2,897 ​ ​ — Unrealized losses recorded in other comprehensive income ​ ( 4,237 ) ​ ( 913 ) Ending balance ​ $ — ​ $ 27,535 ​ ​ 42 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 September 30, 2022 ​ As of December 31, 2021 ​ ​ Carrying ​ Fair ​ Carrying ​ Fair ​ Value Value Value Value Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net investment in leases (refer to Note 5) (1) ​ $ — ​ $ — ​ $ 43 ​ $ 43 Loans receivable and other lending investments, net (1) ​ ​ 177 ​ ​ 177 ​ ​ 333 ​ ​ 345 Loans receivable held for sale (1) ​ ​ — ​ ​ — ​ ​ 43 ​ ​ 43 Cash and cash equivalents (2) ​ 1,336 ​ 1,336 ​ 340 ​ 340 Restricted cash (2) ​ 5 ​ 5 ​ 54 ​ 54 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt obligations, net (1)(3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Level 1 ​ ​ 1,582 ​ ​ 1,583 ​ ​ 2,473 ​ ​ 2,799 Level 3 ​ ​ 99 ​ ​ 99 ​ ​ 99 ​ ​ 104 Total debt obligations, net ​ ​ 1,681 ​ ​ 1,682 ​ ​ 2,572 ​ ​ 2,903 (1) The fair value of the Company’s net investment in leases, loans receivable and other lending investments, net, loans receivable held for sale and certain debt obligations 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 September 30, 2022 and December 31, 2021, t he fair value of the Company’s unsecured notes is classified as Level 1 in the fair value hierarchy. As of December 31, 2021, the fair value of the Company’s 3.125 % Senior Convertible Notes was $ 527.5 million (refer to Note 10). ​ Note 17—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 (refer to Note 3 - Net Lease Sale and Discontinued Operations) includes the Company’s investments in SAFE and its Ground Lease adjacent businesses (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 September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ — ​ $ — ​ $ 3,340 ​ $ 84 ​ $ — ​ $ 3,424 Interest income ​ — ​ 2,093 ​ — ​ — ​ — ​ 2,093 Interest income from sales-type leases ​ 129 ​ — ​ — ​ — ​ — ​ 129 Other income ​ 5,504 ​ 3,147 ​ 12,197 ​ 2,462 ​ 3,714 ​ 27,024 Land development revenue ​ — ​ — ​ — ​ 15,087 ​ — ​ 15,087 Earnings (losses) from equity method investments ​ 43,525 ​ 1,329 ​ 11,515 ​ 850 ​ 578 ​ 57,797 Income from sales of real estate ​ 951 ​ — ​ — ​ — ​ — ​ 951 Total revenue and other earnings ​ 50,109 ​ 6,569 ​ 27,052 ​ 18,483 ​ 4,292 ​ 106,505 Real estate expense ​ ( 726 ) ​ — ​ ( 11,012 ) ​ ( 4,466 ) ​ — ​ ( 16,204 ) Land development cost of sales ​ — ​ — ​ — ​ ( 16,778 ) ​ — ​ ( 16,778 ) Other expense ​ 489 ​ ( 78 ) ​ — ​ ( 218 ) ​ ( 4,364 ) ​ ( 4,171 ) Allocated interest expense ​ ( 13,049 ) ​ ( 1,713 ) ​ ( 1,122 ) ​ ( 1,915 ) ​ ( 4,865 ) ​ ( 22,664 ) Allocated general and administrative (2) ​ ( 5,302 ) ​ ( 1,190 ) ​ ( 751 ) ​ ( 2,333 ) ​ ( 5,008 ) ​ ( 14,584 ) Segment profit (loss) (3) ​ $ 31,521 ​ $ 3,588 ​ $ 14,167 ​ $ ( 7,227 ) ​ $ ( 9,945 ) ​ $ 32,104 43 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Other significant items: ​ ​ ​ ​ ​ ​ Recovery of loan losses ​ $ — ​ $ ( 157 ) ​ $ — ​ $ — ​ $ — ​ $ ( 157 ) Recovery of losses on net investment in leases ​ ( 380 ) ​ — ​ — ​ — ​ — ​ ( 380 ) Depreciation and amortization ​ — ​ — ​ 923 ​ 227 ​ 140 ​ 1,290 Capitalized expenditures ​ — ​ — ​ 104 ​ 5,301 ​ — ​ 5,405 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ Operating lease income ​ $ — ​ $ — ​ $ 3,636 ​ $ 96 ​ $ — ​ $ 3,732 Interest income ​ 651 ​ 6,321 ​ — ​ — ​ — ​ 6,972 Interest income from sales-type leases ​ 526 ​ — ​ — ​ — ​ — ​ 526 Other income ​ 3,605 ​ 1,095 ​ 16,869 ​ 3,189 ​ 14,275 ​ 39,033 Land development revenue ​ — ​ — ​ — ​ 93,369 ​ — ​ 93,369 Earnings (losses) from equity method investments ​ 73,475 ​ 872 ​ 1,129 ​ 10,836 ​ 1,483 ​ 87,795 Income from sales of real estate ​ — ​ — ​ 25,611 ​ — ​ — ​ 25,611 Total revenue and other earnings ​ 78,257 ​ 8,288 ​ 47,245 ​ 107,490 ​ 15,758 ​ 257,038 Real estate expense ​ ( 91 ) ​ — ​ ( 9,184 ) ​ ( 4,094 ) ​ — ​ ( 13,369 ) Land development cost of sales ​ — ​ — ​ — ​ ( 87,380 ) ​ — ​ ( 87,380 ) Other expense ​ ( 210 ) ​ ( 270 ) ​ — ​ ( 64 ) ​ ( 350 ) ​ ( 894 ) Allocated interest expense ​ ( 15,691 ) ​ ( 3,331 ) ​ ( 1,641 ) ​ ( 3,679 ) ​ ( 4,353 ) ​ ( 28,695 ) Allocated general and administrative (2) ​ ( 5,487 ) ​ ( 958 ) ​ ( 473 ) ​ ( 2,173 ) ​ ( 5,029 ) ​ ( 14,120 ) Segment profit (loss) (3) ​ 56,778 ​ $ 3,729 ​ $ 35,947 ​ $ 10,100 ​ $ 6,026 ​ $ 112,580 Other significant non-cash items: ​ ​ ​ ​ ​ ​ Recovery of loan losses ​ $ — ​ $ ( 1,610 ) ​ $ — ​ $ — ​ $ — ​ $ ( 1,610 ) Recovery of losses on net investment in leases ​ ​ ( 315 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 315 ) Impairment of assets ​ — ​ — ​ 421 ​ — ​ — ​ 421 Depreciation and amortization ​ — ​ — ​ 1,385 ​ 228 ​ 129 ​ 1,742 Capitalized expenditures ​ — ​ — ​ 121 ​ 7,416 ​ — ​ 7,537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ — ​ $ — ​ $ 9,396 ​ $ 319 ​ $ — ​ $ 9,715 Interest income ​ 75 ​ 11,187 ​ — ​ — ​ — ​ 11,262 Interest income from sales-type leases ​ 861 ​ — ​ — ​ — ​ — ​ 861 Other income ​ 15,185 ​ 3,185 ​ 22,452 ​ 5,097 ​ 5,626 ​ 51,545 Land development revenue ​ — ​ — ​ — ​ 54,390 ​ — ​ 54,390 Earnings from equity method investments ​ 76,563 ​ 3,112 ​ 15,233 ​ 4,516 ​ 2,798 ​ 102,222 Income from sales of real estate ​ 1,443 ​ — ​ — ​ — ​ — ​ 1,443 Total revenue and other earnings ​ 94,127 ​ 17,484 ​ 47,081 ​ 64,322 ​ 8,424 ​ 231,438 Real estate expense ​ ( 1,385 ) ​ — ​ ( 25,144 ) ​ ( 12,808 ) ​ — ​ ( 39,337 ) Land development cost of sales ​ — ​ — ​ — ​ ( 55,369 ) ​ — ​ ( 55,369 ) Other expense ​ ( 503 ) ​ ( 237 ) ​ — ​ ( 538 ) ​ ( 5,346 ) ​ ( 6,624 ) Allocated interest expense ​ ( 42,426 ) ​ ( 7,049 ) ​ ( 3,602 ) ​ ( 8,903 ) ​ ( 14,076 ) ​ ( 76,056 ) Allocated general and administrative (3) ​ ( 14,156 ) ​ ( 3,540 ) ​ ( 1,854 ) ​ ( 6,702 ) ​ ( 14,878 ) ​ ( 41,130 ) Segment profit (loss) (4) ​ $ 35,657 ​ $ 6,658 ​ $ 16,481 ​ $ ( 19,998 ) ​ $ ( 25,876 ) ​ $ 12,922 Other significant items: ​ ​ ​ ​ ​ ​ Provision for loan losses ​ $ — ​ $ 22,556 ​ $ — ​ $ — ​ $ — ​ $ 22,556 Impairment of assets ​ — ​ — ​ 1,750 ​ — ​ 18 ​ 1,768 Depreciation and amortization ​ — ​ — ​ 2,878 ​ 683 ​ 424 ​ 3,985 Capitalized expenditures ​ — ​ — ​ 644 ​ 15,824 ​ — ​ 16,468 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease income ​ $ — ​ $ — ​ $ 13,177 ​ $ 279 ​ $ — ​ $ 13,456 Interest income ​ 968 ​ 23,878 ​ — ​ — ​ — ​ 24,846 Interest income from sales-type leases ​ 683 ​ — ​ — ​ — ​ — ​ 683 Other income ​ 10,614 ​ 1,245 ​ 23,159 ​ 5,894 ​ 20,038 ​ 60,950 Land development revenue ​ — ​ — ​ — ​ 157,936 ​ — ​ 157,936 Earnings (losses) from equity method investments ​ 94,590 ​ 2,092 ​ ( 5,553 ) ​ 15,456 ​ 4,076 ​ 110,661 Income from sales of real estate ​ — ​ — ​ 26,319 ​ — ​ — ​ 26,319 Total revenue and other earnings ​ 106,855 ​ 27,215 ​ 57,102 ​ 179,565 ​ 24,114 ​ 394,851 Real estate expense ​ ( 562 ) ​ — ​ ( 19,238 ) ​ ( 13,604 ) ​ — ​ ( 33,404 ) Land development cost of sales ​ — ​ — ​ — ​ ( 147,507 ) ​ — ​ ( 147,507 ) Other expense ​ ( 210 ) ​ ( 422 ) ​ — ​ ( 64 ) ​ ( 662 ) ​ ( 1,358 ) Allocated interest expense ​ ( 44,582 ) ​ ( 11,737 ) ​ ( 5,714 ) ​ ( 11,481 ) ​ ( 12,631 ) ​ ( 86,145 ) Allocated general and administrative (3) ​ ( 17,544 ) ​ ( 3,659 ) ​ ( 1,797 ) ​ ( 6,968 ) ​ ( 15,686 ) ​ ( 45,654 ) Segment profit (loss) (4) ​ $ 43,957 ​ $ 11,397 ​ $ 30,353 ​ $ ( 59 ) ​ $ ( 4,865 ) ​ $ 80,783 44 iStar Inc. Notes to Consolidated Financial Statements (Continued) (unaudited) Table of Contents Other significant items: ​ ​ ​ ​ ​ ​ Recovery of loan losses ​ $ — ​ $ ( 7,411 ) ​ $ — ​ $ — ​ $ — ​ $ ( 7,411 ) Provision for losses on net investment in leases ​ 465 ​ — ​ — ​ — ​ — ​ 465 Impairment of assets ​ — ​ — ​ 679 ​ — ​ — ​ 679 Depreciation and amortization ​ ​ — ​ ​ — ​ ​ 4,592 ​ ​ 674 ​ ​ 449 ​ ​ 5,715 Capitalized expenditures ​ — ​ — ​ 610 ​ 16,727 ​ — ​ 17,337 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 ​ ​ ​ ​ ​ ​ Real estate, net ​ $ — ​ $ — ​ $ 89,144 ​ $ — ​ $ — ​ $ 89,144 Real estate available and held for sale ​ — ​ — ​ 1,283 ​ — ​ — ​ 1,283 Total real estate ​ — ​ — ​ 90,427 ​ — ​ — ​ 90,427 Real estate and other assets available and held for sale and classified as discontinued operations (1) ​ ​ 11,925 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 11,925 Land and development, net ​ — ​ — ​ — ​ 248,246 ​ — ​ 248,246 Loans receivable and other lending investments, net ​ — ​ 176,623 ​ — ​ — ​ — ​ 176,623 Other investments ​ ​ 1,525,270 ​ ​ 24,349 ​ ​ 33,808 ​ ​ — ​ ​ 21,841 ​ ​ 1,605,268 Total portfolio assets ​ ​ 1,537,195 ​ ​ 200,972 ​ ​ 124,235 ​ ​ 248,246 ​ ​ 21,841 ​ 2,132,489 Cash and other assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,389,643 Total assets ​ ​ ​ ​ ​ ​ ​ ​ $ 3,522,132 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ ​ ​ ​ Real estate, net ​ $ — ​ $ — ​ $ 92,150 ​ $ — ​ $ — ​ $ 92,150 Real estate available and held for sale ​ — ​ — ​ 301 ​ — ​ — ​ 301 Total real estate ​ — ​ — ​ 92,451 ​ — ​ — ​ 92,451 Real estate and other assets available and held for sale and classified as discontinued operations (1) ​ ​ 2,299,711 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,299,711 Net investment in leases ​ 43,215 ​ — ​ — ​ — ​ — ​ 43,215 Land and development, net ​ — ​ — ​ — ​ 286,810 ​ — ​ 286,810 Loans receivable and other lending investments, net ​ — ​ 332,844 ​ — ​ — ​ — ​ 332,844 Loan receivable held for sale ​ ​ 43,215 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 43,215 Other investments ​ 1,186,162 ​ ​ 48,862 ​ ​ 43,252 ​ ​ 1,096 ​ ​ 17,909 ​ 1,297,281 Total portfolio assets ​ $ 3,572,303 ​ $ 381,706 ​ $ 135,703 ​ $ 287,906 ​ $ 17,909 ​ 4,395,527 Cash and other assets ​ ​ ​ ​ ​ ​ ​ ​ 445,007 Total assets ​ ​ ​ ​ ​ ​ ​ ​ $ 4,840,534 (1) Refer to Note 3 – Net Lease Sale and Discontinued Operations. (2) 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. (3) General and administrative excludes stock-based compensation of ($ 0.4 ) million and $ 3.0 million for the three months ended September 30, 2022 and 2021, respectively, and ($ 30.7 ) million and $ 23.3 million for the nine months ended September 30, 2022 and 2021, respectively. (4) The following is a reconciliation of segment profit to net income (loss) ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, ​ ​ 2022 2021 2022 2021 ​ Segment income ​ $ 32,104 ​ $ 112,580 ​ $ 12,922 ​ $ 80,783 ​ Less: (Provision for) recovery of loan losses ​ 157 ​ 1,610 ​ ( 22,556 ) ​ 7,411 ​ Less: (Provision for) recovery of losses on net investment in leases ​ 380 ​ 315 ​ — ​ ( 465 ) ​ Less: Impairment of assets ​ — ​ ( 421 ) ​ ( 1,768 ) ​ ( 679 ) ​ Less: Stock-based compensation income (expense) ​ 374 ​ ( 3,001 ) ​ 30,724 ​ ( 23,300 ) ​ Less: Depreciation and amortization ​ ( 1,290 ) ​ ( 1,742 ) ​ ( 3,985 ) ​ ( 5,715 ) ​ Less: Income tax (expense) benefit ​ ( 564 ) ​ 39 ​ ( 567 ) ​ 117 ​ Less: Loss on early extinguishment of debt, net ​ ( 13,209 ) ​ — ​ ( 131,200 ) ​ — ​ Less: Net income from discontinued operations ​ ​ — ​ ​ 21,614 ​ ​ 797,688 ​ ​ 69,415 ​ Net income ​ $ 17,952 ​ $ 130,994 ​ $ 681,258 ​ $ 127,567 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 45 Table of Contents ​