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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net (Tables)
 9 Months Ended
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 TypeSeptember 30, 2020December 31, 2019
Commercial mortgage loans, net (1)
$5,427,945 $5,326,967 
Subordinate loans and other lending assets, net1,009,092 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 LossCarrying Value, Net
December 31, 2019$6,467,842 $(35,768)$(56,981)$6,375,093 
New loan fundings457,449 — — 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 fees38,197 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, 2020December 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 $1,952,887 
Weighted-average cash coupon (2)
5.6 %6.5 %
Weighted-average remaining fully-extended term (3)
2.9 years3.3 years
Weighted-average expected term (4)
2.0 years1.8 years
———————
(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.
(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual or cost recovery the interest rate used in calculating weighted-average cash coupon is 0%.
(3)Assumes all extension options are exercised.
(4)Expected term represents our estimated timing of repayments as of September 30, 2020 and December 31, 2019, respectively.
Schedule of Mortgage Loans on Real Estate
The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
September 30, 2020December 31, 2019
Property TypeCarrying
Value
% of
Portfolio(1)
Carrying
Value		% of
Portfolio
Office$1,832,607 28.3 %$1,401,400 22.0 %
Hotel1,578,614 24.4 1,660,162 26.0 
Residential-for-sale: construction894,610 13.8 692,816 10.9 
Residential-for-sale: inventory150,015 2.3 321,673 5.1 
Urban Retail636,308 9.8 643,706 10.1 
Urban Predevelopment295,728 4.6 409,864 6.4 
Healthcare363,170 5.6 371,423 5.8 
Industrial228,674 3.5 227,940 3.6 
Other496,587 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, 2020December 31, 2019
Geographic LocationCarrying
Value
% of
Portfolio(1)
Carrying
Value		% of
Portfolio
New York City$2,393,012 37.0 %$2,167,487 34.0 %
Northeast138,448 2.1 110,771 1.7 
United Kingdom1,179,761 18.2 1,274,390 20.0 
West741,971 11.5 728,182 11.4 
Midwest556,011 8.6 614,337 9.6 
Southeast576,420 8.9 564,166 8.9 
Other890,690 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 RatingNumber of LoansTotal% of Portfolio20202019201820172016Prior
1— $— — %$— $— $— $— $— $— 
21 32,000 0.5 %— — — — — 32,000 
362 6,035,647 93.2 %450,119 2,685,060 1,350,949 815,789 88,685 645,045 
4— — — %— — — — — — 
57 408,666 6.3 %— — 28,872 137,798 114,910 127,086 
Total70 $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 Rating3.1
December 31, 2019
Year Originated
Risk RatingNumber of LoansTotal% of Portfolio20192018201720162015Prior
1— $— — %$— $— $— $— $— $— 
28 348,324 5.5 %— 241,676 — 36,250 24,546 45,852 
361 5,707,555 89.5 %2,736,825 1,355,014 912,636 72,540 499,700 130,840 
41 182,910 2.9 %— — — 182,910 — — 
52 136,304 2.1 %— — — — — 136,304 
Total72 $6,375,093 100.0 %$2,736,825 $1,596,690 $912,636 $291,700 $524,246 $312,996 
Weighted Average Risk Rating3.0
Schedule of CECL Reserves
Refer to the following schedule of the General CECL Allowance as of September 30, 2020, and as of the date of adoption, January 1, 2020 ($ in thousands):
September 30, 2020
January 1, 2020(1)
Commercial mortgage loans, net$20,161 $12,149 
Subordinate loans and other lending assets, net19,115 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 AllowanceTotal CECL AllowanceCECL Allowance as % of Amortized Cost
FundedUnfundedTotalGeneral 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 Allowances150,000 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):
TypeProperty typeLocation
Amortized cost(1)
Interest recognition status/ as of date
Mortgage
Urban Predevelopment(3)
Brooklyn, NY128,418 Cost Recovery/ 3/1/2020
Urban Predevelopment(3)
Miami, FL114,910 Cost Recovery/ 3/1/2020
Retail Center(4)(5)
Cincinnati, OH105,561  Cost Recovery/ 10/1/2019
Hotel(2)
Pittsburgh, PA28,872 Cost Recovery/ 3/31/2020
Residential-for-sale: inventory(6)(7)
Bethesda, MD3,095 Cost Recovery/ 1/1/2018
Mortgage total:$380,856 
Mezzanine
Hotel(2)
Washington, DC18,430  Cost Recovery/ 3/31/2020
Hotel(8)
Anaheim, CA9,380 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.