Subordinate Loans

12 Months Ended

Dec. 31, 2016

Mortgage Loans on Real Estate [Line Items]

Loans

Schedule IV — Mortgage Loans on Real Estate

December 31, 2016

Property Type

Location

Contractual Interest
Rate

Final
Extended Maturity
Date (1)

Periodic
Payment Terms

Face
amount of
loans

Carrying
amount of
loans

Commercial mortgage loans

Condo Construction

Maryland

L+15.00%

Apr-17

Interest only

$51,695

$52,476

Vacation Home Portfolio

Various

7.50%

Apr-19

Principal and interest

88,876

88,195

Hotel

Pennsylvania

L+4.55%

May-19

Interest only

34,000

33,987

Mixed Use

Ohio

L+9.00%

May-20

Interest only

165,000

163,987

Multifamily

North Dakota

L+5.90%

Nov-19

Interest only

49,706

39,713

Vacation Home Portfolio

Various US cities

7.00%

Nov-21

Interest only

59,500

59,193

Mixed Use

New York

L+7.00%

Mar-17

Interest only

85,770

86,142

Retail redevelopment

Florida

L+6.00%

Jan-18

Interest only

45,000

45,415

Retail

New York

L+7.00%

Mar-17

Interest only

23,000

23,012

Hotel

New York

L+5.25%

Sept-20

Interest only

108,857

108,768

Retail

New York

L+7.00%

Mar-17

Interest only

5,910

5,921

Hotel

U.S. Virgin Islands

L+4.95%

Jan-21

Interest only

42,000

41,795

Office

Virginia

L+5.15%

Jan-20

Interest only

54,000

53,849

Retail redevelopment

Florida

L+6.25%

Jan-19

Interest only

220,000

218,771

Office

Massachusetts

L+6.25%

Sept-18

Interest only

28,659

28,543

Mixed Use

New York

L+6.00%

Dec-18

Interest only

45,789

45,541

Condo Conversion

New York

L+6.50%

Jun-18

Interest only

41,016

40,825

Hotel

New York

L+6.30%

Aug-21

Interest only

78,140

77,297

Mixed Use

Illinois

L+5.50%

Oct-20

Interest only

129,397

128,271

Retail

New York

L+7.00%

Mar-17

Interest only

7,500

7,489

Data Center

Virginia

8.00%

Aug-19

Interest only

80,000

79,634

Retail

New York

L+5.75%

Dec-18

Interest only

60,300

59,775

Office

New York

L+4.70%

Dec-18

Interest only

105,000

104,005

Mixed Use Pre-development

California

L+6.75%

Dec-20

Interest only

50,000

49,252

Total commercial mortgage loans

$1,659,115

$1,641,856

Subordinate loans (2)

Mixed Use

North Carolina

11.10%

Aug - 22

Interest only

$6,525

Office Complex

Missouri

11.75%

Oct - 22

Principal and interest

9,414

Hotel Portfolio

Missouri

11.00%

Feb - 18

Principal and interest

23,863

Warehouse Portfolio

Various US cities

11.50%

May - 23

Interest only

32,000

Office Condo

New York

11.25%

Jul - 22

Interest only

14,000

13,679

Ski Resort

Montana

14.00%

Sept - 20

Interest only

15,000

14,773

Mixed Use

New York

L+10.50%

Dec - 19

Interest only

99,581

99,660

Senior Housing

United Kingdom

3ML+8.25%

Dec - 19

Principal and interest

41,693

Hotel

California

10.40%

Jan-20

Interest only

20,000

Multifamily Portfolio

Florida

L+11.50%

May-20

Interest only

22,000

21,967

Multifamily Portfolio

Florida

L+11.50%

May-20

Interest only

15,500

15,477

Mixed Use

Various US

L+9.05%

May-20

Interest only

45,000

45,174

Hotel

Arizona

11.50%

Jul-25

Interest only

25,000

Hotel

Washington, DC

L+9.60%

Jul-19

Interest only

20,000

19,978

Condo Development

New York

L+12.75%

Jul-20

Interest only

56,925

56,693

Condo Conversion

New York

L+12.25%

Aug-20

Interest only

59,636

59,442

Mixed Use

New York

L+10.00%

Oct-19

Interest only

30,000

29,926

Hotel

New York

L+5.25%

Sept-20

Interest only

7,573

7,513

Destination Resort

Various US cities

L+8.90%

May-22

Interest only

75,000

72,877

Multifamily

New York

L+10.50%

May-19

Interest only

55,000

54,775

Hotel

New York

L+12.00%

Mar-17

Interest only

50,000

50,228

Condo Pre-development

United Kingdom

3ML+12.50%

Dec-17

Interest only

123,400

Multifamily

North Dakota

L+5.90%

Nov-19

Interest only

5,000

—

Condo Conversion

New York

L+10.75%

Jul-20

Interest only

48,944

48,399

Healthcare Portfolio

Various US

L+10.00%

Oct-21

Interest only

130,000

128,856

Mixed Use

New York

L+12.00%

Oct-20

Interest only

30,175

29,924

Total subordinate loans

$1,061,229

$1,051,236

Total

$2,720,344

$2,693,092

)


(1)	Assumes all extension options are exercised.


(2)	Subject to prior liens.


(3)	The aggregate cost for federal income tax purposes is $2,708,092.

The following table summarizes the changes in the carrying amounts of mortgage loans during 2016 and 2015.

Reconciliation of Carrying Amount of Loans



	2016			2015
Balance at beginning of year	$	1,925,652		$	1,019,702
Funding of loans	1,127,039			1,366,062
Sales	—			(136,573		)
Collections of principal	(331,189		)	(348,516		)
Participation sold	(24,051		)
Discount accretion	13,656			9,096
Provision for loan losses	(15,000		)	—
Foreign currency loss	(33,383		)	(6,116		)
Payment-in-kind	30,368			21,997
Balance at the close of year	$	2,693,092		$	1,925,652

Subordinate Mortgage Portfolio Segment [Member]

Mortgage Loans on Real Estate [Line Items]

Loans

Subordinate Loans

The Company’s subordinate loan portfolio was comprised of the following as of December 31, 2016:



Description	Maturity Date (1)	Current Principal Balance		Carrying Value		Unfunded Commitment		Fixed / Floating
Subordinate to the Company's commercial mortgage loans
Hotel - New York, NY	Sept-18	$	7,573	$	7,513	$	7,501	Floating
Multifamily - Williston, ND	Nov-17	5,000		—		—		Floating
Total - Subordinate to the Company's commercial mortgage loans		$	12,573	$	7,513	$	7,501

Subordinate to third party commercial mortgage loans
Mixed Use – North Carolina	Aug-22	$	6,525	$	6,525	$	—	Fixed
Office Complex - Missouri	Oct-22	9,414		9,414		—		Fixed
Hotel Portfolio – Rochester, MN	Feb-18	23,863		23,863		—		Fixed
Warehouse Portfolio - Various	May-23	32,000		32,000		—		Fixed
Office Condo - New York, NY	Jul-22	14,000		13,679		—		Fixed
Ski Resort - Big Sky, MT	Sept-20	15,000		14,773		—		Fixed
Mixed Use - New York, NY	Dec-17	99,581		99,660		—		Floating
Senior Housing - United Kingdom	Dec-17	41,693		41,693		—		Floating
Hotel - Burbank, CA	Jan-20	20,000		20,000		—		Fixed
Multifamily Portfolio - Florida	May-17	22,000		21,967		—		Floating
Multifamily Portfolio - Florida	May-17	15,500		15,477		—		Floating
Mixed Use - Various	May-17	45,000		45,174		—		Floating
Hotel - Phoenix, AZ	Jul-25	25,000		25,000		—		Fixed
Hotel - Washington, DC	Jul-17	20,000		19,978		—		Floating
Condo Development - New York, NY	Jul-19	56,925		56,693		19,830		Floating
Condo Conversion - New York, NY	Aug-18	59,636		59,442		—		Floating
Mixed Use - New York, NY	Oct-18	30,000		29,926		—		Floating
Destination Resort - Various	May-18	75,000		72,877		—		Floating
Multifamily - New York, NY	Nov-18	55,000		54,775		—		Floating
Hotel - New York, NY	Mar-17	50,000		50,228				Floating
Condo Pre-development - United Kingdom	Sept-17	123,400		123,400		—		Floating
Condo Conversion - New York, NY	Jul-19	48,944		48,399		28,056		Floating
Healthcare Portfolio - Various	Oct-18	130,000		128,856		—		Floating
Mixed Use - New York, NY	Oct-19	30,175		29,924		—		Floating
Total - Subordinate to third party commercial mortgage loans		$	1,048,656	$	1,043,723	$	47,886
Total		$	1,061,229	$	1,051,236	$	55,387


(1)	Represents contractual maturity date excluding extension options.

The Company’s subordinate loan portfolio was comprised of the following as of December 31, 2015:



Description	Maturity Date (2)	Current Principal Balance		Carrying Value		Unfunded Commitment	Fixed / Floating
Subordinate to the Company's commercial mortgage loans
Condo Conversion – New York, NY (1)	Sept-16	$	6,386	$	6,415	$—	Floating
Mixed Use - Brooklyn, NY (1)	Mar-17	12,347		12,222		—	Floating
Hotel - New York, NY (1)	Sept-18	2,595		2,458		12,478	Floating
Multifamily - Williston, ND (1)	Nov-17	5,000		5,000		—	Floating
Total - Subordinate to the Company's commercial mortgage loans		$	26,328	$	26,095	$12,478

Subordinate to third party commercial mortgage loans
Office - Michigan	Jun-20	$	8,753	$	8,753	$—	Fixed
Mixed Use – North Carolina	Aug-22	6,525		6,525		—	Fixed
Office Complex - Missouri	Oct-22	9,566		9,566		—	Fixed
Hotel Portfolio – Rochester, MN	Feb-18	24,182		24,182		—	Fixed
Warehouse Portfolio - Various	May-23	32,000		32,000		—	Fixed
Office Condo - New York, NY	Jul-22	14,000		13,631		—	Fixed
Mixed Use - Various	Dec-16	19,500		19,377		—	Fixed
Mixed Use - London, England	Jan-16	50,676		50,676		—	Fixed
Healthcare Portfolio - Various	Jun-16	39,223		39,223		—	Floating
Ski Resort - Big Sky, MT	Sept-20	15,000		14,878		—	Fixed
Mixed Use - New York, NY	Dec-17	88,368		87,818		785	Floating
Senior Housing - United Kingdom	Dec-17	79,735		79,735		—	Floating
Hotel - Burbank, CA	Jan-20	20,000		20,000		—	Fixed
Multifamily Portfolio - Florida	May-17	22,000		21,895		—	Floating
Multifamily Portfolio - Florida	May-17	15,500		15,426		—	Floating
Mixed Use - Various	May-17	45,000		44,854		—	Floating
Hotel - Phoenix, AZ	Jul-25	25,000		25,000		—	Fixed
Hotel - Washington, DC	Jul-17	20,000		19,934		—	Floating
Condo Development - New York, NY	Jul-19	34,184		33,567		41,160	Floating
Condo Conversion - New York, NY	Aug-18	52,418		51,941		—	Floating
Mixed Use - New York, NY	Oct-18	30,000		29,785		—	Floating
Destination Resort - Various	May-18	75,000		71,362		—	Floating
Multifamily - New York, NY	Nov-18	55,000		54,558		—	Floating
Hotel - New York, NY	Mar-17	50,000		49,522		—	Floating
Condo Pre-development - United Kingdom	Sept-16	81,048		81,048		—	Floating
Total - Subordinate to third party commercial mortgage loans		$	912,678	$	905,256	$41,945
Total		$	939,006	$	931,351	$54,423


(1)	At December 31, 2015, this loan was pledged to secure borrowings under the JPMorgan Facility. See "Note 8 – Borrowings" for a description of this facility.


(2)	Represents contractual maturity date excluding extension options.

The Company evaluates its loans for possible impairment on a quarterly basis. See "Note 5 – Commercial Mortgage Loans" for a summary of the metrics reviewed. During the year ended December 31, 2016, the Company recorded a loan loss provision of $5,000 on a multifamily subordinate loan in Williston, ND, which was based on the difference between the fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value are the terminal capitalization rate and discount rate which are 11% and 10% respectively. As of December 31, 2016, the aggregate loan loss provision was $5,000. The Company has ceased accruing PIK interest associated with the loan. As of December 31, 2015, there were no provision for loan loss.