v3.22.2.2
Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net (Tables)
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
Schedule of Loan Portfolio
Our loan portfolio was comprised of the following at September 30, 2022 and December 31, 2021 ($ in thousands):
Loan TypeSeptember 30, 2022December 31, 2021
Commercial mortgage loans, net(1)
$8,013,469 $7,012,312 
Subordinate loans and other lending assets, net717,837 844,948 
Carrying value, net$8,731,306 $7,857,260 
  ———————
(1)Includes $206.8 million and $97.8 million in 2022 and 2021, respectively, of contiguous financing structured as subordinate loans.
Schedule of Activity Related to Loan Investment Portfolio
Activity relating to our loan portfolio for the nine months ended September 30, 2022 was as follows ($ in thousands):
Principal
Balance
Deferred Fees/Other Items (1)
Specific CECL Allowance
Carrying Value, Net(2)
December 31, 2021$8,072,377 $(36,529)$(145,000)$7,890,848 
New funding of loans2,753,609 — — 2,753,609 
Add-on loan fundings(3)
493,027 — — 493,027 
Loan repayments and sales(1,511,311)— — (1,511,311)
Gain (loss) on foreign currency translation(675,007)6,425 — (668,582)
Specific CECL Allowance, net— — 26,000 26,000 
Transfer to real estate owned(225,036)(1,423)— (226,459)
Deferred fees and other items— (42,779)— (42,779)
PIK interest and amortization of fees16,149 22,789 — 38,938 
September 30, 2022$8,923,808 $(51,517)$(119,000)$8,753,291 
General CECL Allowance(4)
(21,985)
Carrying value, net$8,731,306 
———————
(1)Other items primarily consist of purchase discounts or premiums, cost recovery interest, exit fees, deferred origination expenses, and the activity of unconsolidated joint ventures.
(2)December 31, 2021 carrying value excludes General CECL Allowance of $33.6 million.
(3)Represents fundings committed prior to 2022.
(4)$2.8 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.
Schedule of Overall Statistics for the Loan Portfolio
The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):
September 30, 2022December 31, 2021
Number of loans 65 67 
Principal balance$8,923,808 $8,072,377 
Carrying value, net$8,731,306 $7,857,260 
Unfunded loan commitments(1)
$1,127,857 $1,357,122 
Weighted-average cash coupon(2)
5.8 %4.5 %
Weighted-average remaining fully-extended term(3)
3.0 years2.9 years
Weighted-average expected term(4)
1.7 years2.3 years
———————
(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.
(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual or cost recovery the interest rate used in calculating weighted-average cash coupon is 0%.
(3)Assumes all extension options are exercised.
(4)Expected term represents our estimated timing of repayments as of the specified dates. Excludes risk-rated 5 loans.
Schedule of Mortgage Loans on Real Estate
The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
September 30, 2022December 31, 2021
Property TypeCarrying
Value
% of
Portfolio(1)
Carrying
Value
% of
Portfolio(1)
Hotel$1,983,071 22.7 %$1,875,439 23.8 %
Office1,750,260 20.0 1,700,779 21.6 
Residential1,629,031 18.6 1,434,186 18.2 
Retail1,318,862 15.1 1,126,332 14.3 
Healthcare603,150 6.9 316,321 4.0 
Mixed Use529,200 6.0 269,839 3.4 
Industrial310,516 3.5 377,068 4.8 
Other(2)
629,201 7.2 790,884 9.9 
Total$8,753,291 100.0 %$7,890,848 100.0 %
General CECL Allowance(3)
(21,985)(33,588)
Carrying value, net$8,731,306 $7,857,260 

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other property types include parking garages (3.1%), caravan parks (2.1%) and urban predevelopment (2.0%) in 2022, and parking garages (3.3%), caravan parks (2.8%), multifamily development (2.2%), and urban predevelopment (1.6%) in 2021.
(3)$2.8 million and $3.1 million of the General CECL Allowance for 2022 and 2021, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Geography
The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
September 30, 2022December 31, 2021
Geographic LocationCarrying
Value
% of
Portfolio(1)
Carrying
Value
% of
Portfolio(1)
United Kingdom$2,300,384 26.3 %$2,297,286 29.1 %
New York City2,240,469 25.6 2,000,661 25.4 
Other Europe(2)
1,402,047 16.0 1,295,870 16.4 
Southeast735,912 8.4 708,920 9.0 
Midwest623,233 7.1 689,274 8.7 
West616,594 7.0 356,097 4.5 
Other(3)
834,652 9.6 542,740 6.9 
Total$8,753,291 100.0 %$7,890,848 100.0 %
General CECL Allowance(4)
(21,985)(33,588)
Carrying value, net$8,731,306 $7,857,260 

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other Europe includes Italy (4.8%), Germany (4.4%), Spain (3.5%), Sweden (2.6%) and Ireland (0.7%) in 2022 and Germany (6.1%), Sweden (3.6%), Spain (3.3%), Italy (2.6%), and Ireland (0.8%) in 2021.
(3)Other includes Northeast (5.5%), Southwest (2.4%), Mid-Atlantic (1.4%) and Other (0.3%) in 2022 and Southwest (3.5%), Mid-Atlantic (1.6%), Northeast (1.5%), and Other (0.3%) in 2021.
(4)$2.8 million and $3.1 million of the General CECL Allowance for 2022 and 2021, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.
Schedule of Carrying Value of Loan Portfolio Based on Internal Risk Ratings
The following tables allocate the carrying value of our loan portfolio based on our internal risk ratings and date of origination at the dates indicated ($ in thousands):
September 30, 2022
Year Originated
Risk RatingNumber of LoansTotal% of Portfolio20222021202020192018Prior
1— $— — %$— $— $— $— $— $— 
21 32,000 0.4 %— — — — — 32,000 
360 8,291,679 94.7 %2,336,965 2,369,568 643,652 1,691,069 511,360 739,065 
4— — — %— — — — — — 
54 429,612 4.9 %— — — — — 429,612 
Total65 $8,753,291 100.0 %$2,336,965 $2,369,568 $643,652 $1,691,069 $511,360 $1,200,677 
General CECL Allowance(1)
(21,985)
Total carrying value, net$8,731,306 
Weighted Average Risk Rating3.1



December 31, 2021
Year Originated
Risk RatingNumber of LoansTotal% of Portfolio20212020201920182017Prior
1— $— — %$— $— $— $— $— $— 
21 32,000 0.4 %— — — — — 32,000 
362 7,372,081 93.5 %2,622,248 644,404 2,307,948 828,270 389,264 579,947 
41 81,980 1.0 %— — — — 81,980 — 
53 404,787 5.1 %— — — — 177,483 227,304 
Total67 $7,890,848 100.0 %$2,622,248 $644,404 $2,307,948 $828,270 $648,727 $839,251 
General CECL Allowance(1)
(33,588)
Total carrying value, net$7,857,260 
Weighted Average Risk Rating3.1
———————
(1)$2.8 million and $3.1 million of the General CECL Allowance for 2022 and 2021, respectively, is excluded from the tables above because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet
Schedule of CECL Reserves
The following schedule illustrates the quarterly changes in CECL Allowances for the nine months ended September 30, 2022 and 2021, respectively ($ in thousands):
Specific CECL Allowance(4)
General CECL AllowanceTotal CECL Allowance
CECL Allowance as % of Amortized Cost(4)
FundedUnfundedTotalGeneral Total
December 31, 2021$145,000 $33,588 $3,106 $36,694 $181,694 0.49 %2.26 %
Changes:
Q1 Allowance (Reversals)(1)
30,000 (12,211)822 (11,389)18,611 
March 31, 2022$175,000 $21,377 $3,928 $25,305 $200,305 0.32 %2.34 %
Changes:
Q2 Allowance (Reversals), net(2)
(3,000)1,985 71 2,056 (944)
June 30, 2022$172,000 $23,362 $3,999 $27,361 $199,361 0.33 %2.18 %
Changes:
Q3 (Reversals), net(3)
$(53,000)(1,377)(1,187)(2,564)(55,564)
September 30, 2022$119,000 $21,985 $2,812 $24,797 $143,797 0.30 %1.62 %
———————
(1)During the three months ended March 31, 2022, a $30.0 million Specific CECL Allowance was recorded on a subordinate loan secured by an ultra luxury residential property in Manhattan, NY. During the three months ended March 31, 2022, the General CECL Allowance decreased by $11.4 million primarily due to changes in expected loan repayment dates, as well as portfolio seasoning, which was partially offset by new loan originations.
(2)During the three months ended June 30, 2022, the $3.0 million net reversal of Specific CECL Allowance was comprised of (i) the reversal of $10.0 million of previously recorded allowance on a loan related to a multifamily development in Brooklyn, NY as a result of market rent growth and value created from development activities and (ii) a $7.0 million allowance recorded on a loan secured by a hotel in Atlanta, GA due to slower than expected recovery from COVID-19. General CECL Allowance increased by $2.1 million due to new loan originations and more adverse macroeconomic outlook, which was partially offset by portfolio seasoning.
(3)During the three months ended September 30, 2022, the $53.0 million Specific CECL Allowance was reversed on an urban predevelopment first
mortgage loan in Miami, FL because the collateral which secures the loan is under contract to be sold in the near term at a higher value than the carrying value of the loan pre-reversal. General CECL Allowance decreased by $2.6 million primarily due to portfolio seasoning and sale of unfunded commitments, which was partially offset by one new loan origination and a more adverse macroeconomic outlook.
(4)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.
Specific CECL Allowance(5)
General CECL AllowanceTotal CECL Allowance
CECL Allowance as % of Amortized Cost(5)
FundedUnfundedTotalGeneral Total
December 31, 2020$175,000 $38,102 $3,365 $41,467 $216,467 0.67 %3.23 %
Changes:
Q1 Allowance (Reversals)(1)
— (1,667)429 (1,238)(1,238)
March 31, 2021$175,000 $36,435 $3,794 $40,229 $215,229 0.62 %3.06 %
Changes:
Q2 Allowance (Reversals)(2)
(20,000)1,764 (1,350)414 (19,586)
Write-offs(3)
(10,000)— — — (10,000)
June 30, 2021$145,000 $38,199 $2,444 $40,643 $185,643 0.57 %2.41 %
Changes:
Q3 Allowance (Reversals)(4)
— (5,515)(251)(5,766)(5,766)
September 30, 2021$145,000 $32,684 $2,193 $34,877 $179,877 0.51 %2.43 %
———————
(1)During the three months ended March 31, 2021, General CECL Allowance decreased by $1.2 million due to portfolio seasoning and accelerated expected loan repayment dates, which was partially offset by new loan originations.
(2)During the three months ended June 30, 2021, there was a reversal of previously recorded Specific CECL Allowance of $20.0 million on a loan related to a multifamily development in Brooklyn, NY due to improved market outlook. General CECL Allowance increased by $0.4 million due to new loan originations, which was partially offset by portfolio seasoning and an improved macroeconomic outlook.
(3)$10.0 million of previously recorded Specific CECL Allowance, on a subordinate hotel loan, was written-off in connection with the assumption of the hotels assets and liabilities. Refer to "Note 5 – Assets and Liabilities Related to Real Estate Owned, Held for Sale" for additional information.
(4)During the three months ended September 30, 2021, General CECL Allowance decreased by $5.8 million primarily due to portfolio seasoning.
(5)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.
The following schedule sets forth our General CECL Allowance as of September 30, 2022 and December 31, 2021 ($ in thousands):
September 30, 2022December 31, 2021
Commercial mortgage loans, net$18,554 $22,554 
Subordinate loans and other lending assets, net3,431 11,034 
Unfunded commitments(1)
2,812 3,106 
Total General CECL Allowance$24,797 $36,694 
 ———————
(1)The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities.
Financing Receivable Cost Recovery
The following table summarizes our risk rated 5 loans as of September 30, 2022, which were analyzed for Specific CECL Allowances ($ in thousands):
TypeProperty typeLocationAmortized cost prior to Specific CECL AllowanceSpecific CECL AllowanceAmortized costInterest recognition status/ as of dateRisk rating
Mortgage
Urban Predevelopment(1)
Miami, FL$191,139$15,000$176,139Non-Accrual/ 3/1/20205
Retail(2)(3)
Cincinnati, OH170,66167,000103,661 Non-Accrual/ 10/1/20195
Hotel(4)
Atlanta, GA104,8327,00097,832Non-Accrual/ 5/1/20225
Mortgage total:$466,632$89,000$377,632
Mezzanine
Residential(5)
Manhattan, NY$81,980$30,000$51,980Non-Accrual/ 7/1/20215
Mezzanine total:$81,980$30,000$51,980
Total:$548,612$119,000$429,612
———————
(1)In October 2020, we entered a joint venture with CCOF Design Venture, LLC, which owns the underlying properties that secure our $188.2 million first mortgage loan. The entity in which we own an interest, and which owns the underlying properties, was deemed to be a Variable Interest Entity ("VIE") and we determined that we are not the primary beneficiary of that VIE as we do not have the power to direct the entity's activities. The related profit and loss from the joint venture was immaterial for the three and nine months ended September 30, 2022 and 2021. During the three months ended September 30, 2022, $53.0 million of the previously recorded $68.0 million Specific CECL Allowance was reversed because the collateral which secures the loan is under contract to be sold in the near term. Fair value of the property is based on contracted price net of amounts due to our joint venture partner based on terms of the joint venture agreement. The loan remains on non-accrual and the risk rating remains a 5.
(2)The fair value of retail collateral was determined by applying a capitalization rate of 8.0%.
(3)In September 2018, we entered a joint venture with Turner Consulting II, LLC ("Turner Consulting"), through an entity which owns the underlying property that secures our loan. Turner Consulting contributed 10% of the venture’s equity and we contributed 90%. The entity was deemed to be a VIE and we determined that we are not the primary beneficiary of that VIE as we do not have the power to direct the entity's activities. During the three and nine months ended September 30, 2022 and 2021, $0.6 million and $1.2 million, respectively and $0.2 million and $1.0 million, respectively of interest paid was applied towards reducing the carrying value of the loan. The related profit and loss from the joint venture was immaterial for the three and nine months ended September 30, 2022 and 2021.
(4)The fair value of the hotel collateral was determined by applying a capitalization rate of 9.3% and a discount rate of 11.3%.
(5)The fair value of the residential collateral was determined by making certain projections and assumptions with respect to future performance and a discount rate of 10%.