Commercial Mortgage and Subordinate Loans, Net (Tables)

6 Months Ended

Jun. 30, 2018

The Company’s loan portfolio was comprised of the following at June 30, 2018 and December 31, 2017 ($ in thousands):



Loan Type	June 30, 2018		December 31, 2017
Commercial mortgage loans, net	$	3,724,221	$	2,653,826
Subordinate loans, net	1,142,514		1,025,932
Total loans, net	$	4,866,735	$	3,679,758

Activity relating to our loan investment portfolio was as follows ($ in thousands):



	Principal Balance			Deferred Fees/Other Items ⁽¹⁾			Provision for Loan Loss ⁽²⁾			Carrying Value
December 31, 2017	$	3,706,169		$	(9,430	)	$	(16,981	)	$	3,679,758
New loan fundings	1,477,473			—			—			1,477,473
Add-on loan fundings ⁽³⁾	103,784			—			—			103,784
Loan repayments	(375,708		)	—			—			(375,708		)
Unrealized gain (loss) on foreign currency translation	(25,539		)	216			—			(25,323		)
Provision for loan loss ⁽²⁾	—			—			(5,000		)	(5,000		)
Deferred fees and other items ⁽¹⁾	—			(20,607		)	—			(20,607		)
PIK interest, amortization of fees and other items ⁽¹⁾	19,695			12,663			—			32,358
June 30, 2018	$	4,905,874		$	(17,158	)	$	(21,981	)	$	4,866,735

———————

(1) Other items primarily consist of purchase discounts or premiums, exit fees and deferred origination expenses.

(2) In addition to the $22.0 million provision for loan loss, the Company recorded an impairment of $3.0 million against an investment previously recorded under other assets on the Company's consolidated balance sheet.

(3) Represents fundings for loans closed prior to 2018.

Schedule of Overall Statistics for the Loan Portfolio

The following table details overall statistics for our loan portfolio ($ in thousands):



	June 30, 2018			December 31, 2017
Number of loans	70			59
Principal balance	$	4,905,874		$	3,706,169
Carrying value	$	4,866,735		$	3,679,758
Unfunded loan commitments⁽¹⁾	$	818,095		$	435,627
Weighted-average cash coupon ⁽²⁾	8.1		%	8.4		%

———————


(1)	Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. 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.

Schedule of Mortgage Loans on Real Estate

The table below details the property type of the properties securing the loans in our portfolio ($ in thousands):



	June 30, 2018		December 31, 2017
Property Type	Carrying Value	% of Portfolio	Carrying Value	% of Portfolio
Hotel	$1,137,737	23.4%	$645,056	17.6%
Residential-for-sale: inventory ⁽¹⁾	616,608	12.7%	92,438	2.5%
Residential-for-sale: construction ⁽¹⁾	333,884	6.8%	349,739	9.5%
Urban Predevelopment	724,366	14.9%	654,736	17.8%
Office	603,947	12.4%	513,830	14.0%
Multifamily	449,414	9.2%	465,057	12.6%
Mixed Use	356,703	7.3%	354,640	9.6%
Healthcare	256,372	5.3%	173,870	4.7%
Retail Center	201,551	4.1%	198,913	5.4%
Other	154,153	3.2%	154,141	4.2%
Industrial	32,000	0.7%	77,338	2.1%
Total	$4,866,735	100.0%	$3,679,758	100.0%


(1)	To conform to the current period’s presentation, loans with a combined carrying value of $442.0 million classified as residential-for-sale as of December 31, 2017 were broken out into $349.8 million of residential-for-sale: construction and $92.4 million of residential-for-sale: inventory.

The table below details the geographic distribution of the properties securing the loans in our portfolio ($ in thousands):



	June 30, 2018		December 31, 2017
Geographic Location	Carrying Value	% of Portfolio	Carrying Value	% of Portfolio
Manhattan, NY	$1,445,389	29.7%	$1,173,833	31.9%
Brooklyn, NY	388,814	8.0%	357,611	9.7%
Northeast	37,956	0.8%	100,536	2.7%
Midwest	718,600	14.8%	683,380	18.6%
Southeast	608,884	12.5%	531,582	14.4%
West	500,102	10.2%	227,024	6.2%
Mid Atlantic	214,521	4.4%	191,976	5.2%
Southwest	115,639	2.4%	33,615	0.9%
United Kingdom	711,324	14.6%	303,488	8.3%



Other International	125,506	2.6%	76,713	2.1%
Total	$4,866,735	100.0%	$3,679,758	100.0%

Carrying Value of Loan Portfolio Based on Internal Risk Ratings

The following table allocates the carrying value of our loan portfolio based on the Company's internal risk ratings ($ in thousands):



	June 30, 2018					December 31, 2017
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio		Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—	%	—	$	—	—	%
2	4	263,216		5	%	5	399,326		10	%
3	63	4,367,766		90	%	51	3,034,358		83	%
4	1	170,685		4	%	1	168,208		5	%
5	2	65,068		1	%	2	77,866		2	%
	70	$	4,866,735	100	%	59	$	3,679,758	100	%