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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net (Tables) | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Schedule of Loan Portfolio | Our loan portfolio was comprised of the following at September 30, 2020 and December 31, 2019 ($ in thousands):
Loan Type |  | September 30, 2020 |  | December 31, 2019
Commercial mortgage loans, net (1) |  | $ | 5,427,945 |  |  | $ | 5,326,967 |
Subordinate loans and other lending assets, net |  | 1,009,092 |  |  | 1,048,126 |
Carrying value, net |  | $ | 6,437,037 |  |  | $ | 6,375,093 |
——————— (1)Includes $156.4 million and $126.7 million in 2020 and 2019, respectively, of contiguous financing structured as subordinate loans.
Schedule of Activity Related to Loan Investment Portfolio | Activity relating to our loan portfolio, for the nine months ended September 30, 2020, was as follows ($ in thousands):
|  | Principal Balance |  | Deferred Fees/Other Items (1) |  | Specific Provision for Loan Loss |  | Carrying Value, Net
December 31, 2019 |  | $ | 6,467,842 |  |  | $ | (35,768) |  |  | $ | (56,981) |  |  | $ | 6,375,093 |
New loan fundings |  | 457,449 |  |  | — |  |  | — |  |  | 457,449 |
Add-on loan fundings (2) |  | 309,820 |  |  | — |  |  | — |  |  | 309,820 |
Loan repayments and sales |  | (543,535) |  |  | — |  |  | — |  |  | (543,535) |
Gain (loss) on foreign currency translation |  | (15,060) |  |  | 543 |  |  | — |  |  | (14,517) |
Specific CECL Allowance |  | — |  |  | — |  |  | (139,950) |  |  | (139,950) |
Realized loss on investment |  | (20,569) |  |  | 3,127 |  |  | — |  |  | (17,442) |
Deferred fees |  | — |  |  | (6,027) |  |  | — |  |  | (6,027) |
PIK interest and amortization of fees |  | 38,197 |  |  | 17,225 |  |  | — |  |  | 55,422 |
September 30, 2020 |  | $ | 6,694,144 |  |  | $ | (20,900) |  |  | $ | (196,931) |  |  | $ | 6,476,313 |
General CECL Allowance (3) |  |  |  |  |  |  |  | (39,276) |
Carrying value, net |  |  |  |  |  |  |  | $ | 6,437,037 |
——————— (1)Other items primarily consist of purchase discounts or premiums, cost recovery interest, exit fees and deferred origination expenses. (2)Represents fundings for loans closed prior to 2020. (3)$3.6 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.
Schedule of Overall Statistics for the Loan Portfolio | The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):
|  | September 30, 2020 |  | December 31, 2019
Number of loans |  | 70 |  |  | 72 |
Principal balance |  | $ | 6,694,144 |  |  | $ | 6,467,842 |
Carrying value, net |  | $ | 6,437,037 |  |  | $ | 6,375,093 |
Unfunded loan commitments (1) |  | $ | 1,426,404 |  |  | $ | 1,952,887 |
Weighted-average cash coupon (2) |  | 5.6 | % |  | 6.5 | %
Weighted-average remaining fully-extended term (3) |  | 2.9 years |  | 3.3 years
Weighted-average expected term (4) |  | 2.0 years |  | 1.8 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 September 30, 2020 and December 31, 2019, respectively.
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, 2020 |  |  |  | December 31, 2019 |  |
Property Type |  | Carrying Value |  | % of Portfolio(1) |  | Carrying Value |  | % of Portfolio
Office |  | $ | 1,832,607 |  |  | 28.3 | % |  | $ | 1,401,400 |  |  | 22.0 | %
Hotel |  | 1,578,614 |  |  | 24.4 |  |  | 1,660,162 |  |  | 26.0 |
Residential-for-sale: construction |  | 894,610 |  |  | 13.8 |  |  | 692,816 |  |  | 10.9 |
Residential-for-sale: inventory |  | 150,015 |  |  | 2.3 |  |  | 321,673 |  |  | 5.1 |
Urban Retail |  | 636,308 |  |  | 9.8 |  |  | 643,706 |  |  | 10.1 |
Urban Predevelopment |  | 295,728 |  |  | 4.6 |  |  | 409,864 |  |  | 6.4 |
Healthcare |  | 363,170 |  |  | 5.6 |  |  | 371,423 |  |  | 5.8 |
Industrial |  | 228,674 |  |  | 3.5 |  |  | 227,940 |  |  | 3.6 |
Other |  | 496,587 |  |  | 7.7 |  |  | 646,109 |  |  | 10.1 |
Total |  | $ | 6,476,313 |  |  | 100.0 | % |  | $ | 6,375,093 |  |  | 100.0 | %
General CECL Allowance (2) |  | (39,276) |  |  |  |  |  |  |
Carrying value, net |  | $ | 6,437,037 |  |  |  |  |  |  |
——————— (1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance. (2)$3.6 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet. Geography The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
|  | September 30, 2020 |  |  |  | December 31, 2019 |  |
Geographic Location |  | Carrying Value |  | % of Portfolio(1) |  | Carrying Value |  | % of Portfolio
New York City |  | $ | 2,393,012 |  |  | 37.0 | % |  | $ | 2,167,487 |  |  | 34.0 | %
Northeast |  | 138,448 |  |  | 2.1 |  |  | 110,771 |  |  | 1.7 |
United Kingdom |  | 1,179,761 |  |  | 18.2 |  |  | 1,274,390 |  |  | 20.0 |
West |  | 741,971 |  |  | 11.5 |  |  | 728,182 |  |  | 11.4 |
Midwest |  | 556,011 |  |  | 8.6 |  |  | 614,337 |  |  | 9.6 |
Southeast |  | 576,420 |  |  | 8.9 |  |  | 564,166 |  |  | 8.9 |
Other |  | 890,690 |  |  | 13.7 |  |  | 915,760 |  |  | 14.4 |
Total |  | $ | 6,476,313 |  |  | 100.0 | % |  | $ | 6,375,093 |  |  | 100.0 | %
General CECL Allowance (2) |  | (39,276) |  |  |  |  |  |  |
Carrying value, net |  | $ | 6,437,037 |  |  |  |  |  |  |
——————— (1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance. (2)$3.6 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.
Schedule of Carrying Value of Loan Portfolio Based on Internal Risk Ratings | The following tables allocate the carrying value of our loan portfolio based on our internal risk ratings and date of origination at the dates indicated ($ in thousands):
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | Year Originated |  |  |  |  |  |  |  |  |  |
Risk Rating |  | Number of Loans |  | Total |  | % of Portfolio |  |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior
1 |  | — |  |  | $ | — |  |  | — | % |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2 |  | 1 |  |  | 32,000 |  |  | 0.5 | % |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32,000 |
3 |  | 62 |  |  | 6,035,647 |  |  | 93.2 | % |  |  | 450,119 |  |  | 2,685,060 |  |  | 1,350,949 |  |  | 815,789 |  |  | 88,685 |  |  | 645,045 |
4 |  | — |  |  | — |  |  | — | % |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
5 |  | 7 |  |  | 408,666 |  |  | 6.3 | % |  |  | — |  |  | — |  |  | 28,872 |  |  | 137,798 |  |  | 114,910 |  |  | 127,086 |
Total |  | 70 |  |  | $ | 6,476,313 |  |  | 100.0 | % |  |  | $ | 450,119 |  |  | $ | 2,685,060 |  |  | $ | 1,379,821 |  |  | $ | 953,587 |  |  | $ | 203,595 |  |  | $ | 804,131 |
General CECL Allowance |  |  |  | (39,276) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total carrying value, net |  |  |  | $ | 6,437,037 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted Average Risk Rating |  |  |  | 3.1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | Year Originated |  |  |  |  |  |  |  |  |  |
Risk Rating |  | Number of Loans |  | Total |  | % of Portfolio |  |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | 2015 |  | Prior
1 |  | — |  |  | $ | — |  |  | — | % |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2 |  | 8 |  |  | 348,324 |  |  | 5.5 | % |  |  | — |  |  | 241,676 |  |  | — |  |  | 36,250 |  |  | 24,546 |  |  | 45,852 |
3 |  | 61 |  |  | 5,707,555 |  |  | 89.5 | % |  |  | 2,736,825 |  |  | 1,355,014 |  |  | 912,636 |  |  | 72,540 |  |  | 499,700 |  |  | 130,840 |
4 |  | 1 |  |  | 182,910 |  |  | 2.9 | % |  |  | — |  |  | — |  |  | — |  |  | 182,910 |  |  | — |  |  | — |
5 |  | 2 |  |  | 136,304 |  |  | 2.1 | % |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 136,304 |
Total |  | 72 |  |  | $ | 6,375,093 |  |  | 100.0 | % |  |  | $ | 2,736,825 |  |  | $ | 1,596,690 |  |  | $ | 912,636 |  |  | $ | 291,700 |  |  | $ | 524,246 |  |  | $ | 312,996 |
Weighted Average Risk Rating |  |  |  | 3.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Schedule of CECL Reserves | Refer to the following schedule of the General CECL Allowance as of September 30, 2020, and as of the date of adoption, January 1, 2020 ($ in thousands):
|  | September 30, 2020 |  | January 1, 2020(1)
Commercial mortgage loans, net |  | $ | 20,161 |  |  | $ | 12,149 |
Subordinate loans and other lending assets, net |  | 19,115 |  |  | 15,630 |
Unfunded commitments(2) |  | 3,595 |  |  | 3,088 |
Total General CECL Allowance |  | $ | 42,871 |  |  | $ | 30,867 |
——————— (1)As of January 1, 2020, we adopted the CECL Standard through a cumulative-effect adjustment to retained earnings (2)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 The following schedule illustrates the quarterly changes in the CECL Allowance since we adopted the CECL Standard on January 1, 2020 ($ in thousands):
|  | Specific CECL Allowance(1) |  | General CECL Allowance |  |  |  | Total CECL Allowance |  | CECL Allowance as % of Amortized Cost |
|  |  |  | Funded | Unfunded | Total |  |  |  | General | Total
December 31, 2019 |  | $56,981 |  | $ | — |  | $ | — |  | $ | — |  |  | $ | 56,981 |  |  | — | % | — | %
Changes: |  |  |  |  |  |  |  |  |  |  |
| January 1, 2020 - Adoption of CECL Standard | — |  |  | 27,779 |  | 3,088 |  | 30,867 |  |  | 30,867 |  |  |  |
| Q1 Allowances | 150,000 |  |  | 30,494 |  | 2,971 |  | 33,465 |  |  | 183,465 |  |  |  |
March 31, 2020 |  | $ | 206,981 |  |  | $ | 58,273 |  | $ | 6,059 |  | $ | 64,332 |  |  | $ | 271,313 |  |  | 1.08 | % | 4.05 | %
Changes: |  |  |  |  |  |  |  |  |  |  |
| Q2 Allowances (Reversals) | 5,500 |  |  | (13,729) |  | (1,940) |  | (15,669) |  |  | (10,169) |  |  |  |
| Realized Loss | (15,000) |  |  | — |  | — |  | — |  |  | (15,000) |  |  |  |
June 30, 2020 |  | $ | 197,481 |  |  | $ | 44,544 |  | $ | 4,119 |  | $ | 48,663 |  |  | $ | 246,144 |  |  | 0.81 | % | 3.71 | %
Changes: |  |  |  |  |  |  |  |  |  |  |
| Q3 Reversals | (550) |  |  | (5,268) |  | (524) |  | (5,792) |  |  | (6,342) |  |  |  |
September 30, 2020 |  | $ | 196,931 |  |  | $ | 39,276 |  | $ | 3,595 |  | $ | 42,871 |  |  | $ | 239,802 |  |  | 0.71 | % | 3.59 | %
——————— (1)As of December 31, 2019, amount represents specific loan loss provisions recorded on assets before the adoption of the CECL Standard. After the adoption of the CECL Standard on January 1, 2020, amounts represent Specific CECL Allowances.
Schedule of Loans in Cost Recovery | The following table summarizes the specific provision for loan losses that has been recorded on our portfolio as of September 30, 2020 ($ in thousands):
Type | Property type | Location | Amortized cost(1) | Interest recognition status/ as of date
Mortgage |  |  |  |
| Urban Predevelopment(3) | Brooklyn, NY | 128,418 |  | Cost Recovery/ 3/1/2020
| Urban Predevelopment(3) | Miami, FL | 114,910 |  | Cost Recovery/ 3/1/2020
| Retail Center(4)(5) | Cincinnati, OH | 105,561 |  | Cost Recovery/ 10/1/2019
| Hotel(2) | Pittsburgh, PA | 28,872 |  | Cost Recovery/ 3/31/2020
| Residential-for-sale: inventory(6)(7) | Bethesda, MD | 3,095 |  | Cost Recovery/ 1/1/2018
Mortgage total: |  |  | $ | 380,856 |  |
Mezzanine |  |  |  |
| Hotel(2) | Washington, DC | 18,430 |  | Cost Recovery/ 3/31/2020
| Hotel(8) | Anaheim, CA | 9,380 |  | Cost Recovery/ 9/30/2020
Mezzanine total: |  |  | $ | 27,810 |  |
Grand total: |  |  | $ | 408,666 |  |
——————— (1)Amortized cost is shown net of $196.9 million of net loan loss provisions. During the three and nine months ended September 30, 2020, there was $(0.6) million and $140.0 million in (reversals)/provisions taken due to factors including COVID-19. See Note 2 for additional information regarding COVID-19. (2)The fair value of hotel collateral was determined by applying a discount rate ranging from 8.5% to 11.0% and a capitalization rate ranging from 7.0% to 9.0%. For the hotel located in Washington, DC, during the three and nine months ended September 30, 2020, there was $0 and $0.2 million of interest paid applied towards reducing the carrying value of the loan, respectively. (3)The fair value of urban predevelopment collateral was determined by assuming rent per square foot ranging from $48 to $225 and a capitalization rate ranging from 5.0% to 5.5%. (4)The fair value of retail collateral was determined by applying a capitalization rate of 8.3%. (5)The entity in which we own an interest and which owns the underlying property was deemed to be a VIE and we determined that we are not the primary beneficiary of that VIE. During the three and nine months ended September 30, 2020, $0.4 million and $1.1 million, respectively, of interest paid was applied towards reducing the carrying value of the loan. (6)Subsequent to September 30, 2020, the remaining collateral on this loan was sold. In connection with the sale of the underlying collateral, a $1.9 million reversal of the previously recognized specific CECL Allowance was recorded during the three months ended September 30, 2020. Refer to "Note 18 - Subsequent Events" for more information. (7)A $3.0 million portion of this provision was recorded on an investment previously recorded under other assets on our condensed consolidated balance sheet. (8)The fair value of the hotel, located in Anaheim, California, was determined using the market approach where the fair market value of the underlying collateral, less projected closing costs, was compared to the amortized cost of the loan.

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