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Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net
 6 Months Ended
Jun. 30, 2022
Receivables [Abstract]  
Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net
Our loan portfolio was comprised of the following at June 30, 2022 and December 31, 2021 ($ in thousands):
Loan TypeJune 30, 2022December 31, 2021
Commercial mortgage loans, net(1)
$8,176,149 $7,012,312 
Subordinate loans and other lending assets, net 753,711 844,948 
Subordinate loan, held for sale7,500 — 
Carrying value, net$8,937,360 $7,857,260 
  ———————
(1)Includes $11.0 million and $97.8 million in 2022 and 2021, respectively, of contiguous financing structured as subordinate loans.

Our loan portfolio consisted of 98% floating rate loans, based on amortized cost, as of each of June 30, 2022 and December 31, 2021.
Activity relating to our loan portfolio for the six months ended June 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 loans2,326,545 — — 2,326,545 
Add-on loan fundings(3)
334,094 — — 334,094 
Loan repayments and sales(1,191,375)— — (1,191,375)
Gain (loss) on foreign currency translation(368,401)3,714 — (364,687)
Specific CECL Allowance, net— — (27,000)(27,000)
Deferred fees and other items— (34,907)— (34,907)
PIK interest and amortization of fees11,653 15,551 — 27,204 
June 30, 2022$9,184,893 $(52,171)$(172,000)$8,960,722 
General CECL Allowance(4)
(23,362)
Carrying value, net$8,937,360 
———————
(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.
(3)Represents fundings committed prior to 2022.
(4)$4.0 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.


The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):
June 30, 2022December 31, 2021
Number of loans 67 67 
Principal balance$9,184,893 $8,072,377 
Carrying value, net$8,937,360 $7,857,260 
Unfunded loan commitments(1)
$1,711,776 $1,357,122 
Weighted-average cash coupon(2)
4.7 %4.5 %
Weighted-average remaining fully-extended term(3)
3.0 years2.9 years
Weighted-average expected term(4)
1.9 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.

Property Type
The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
June 30, 2022December 31, 2021
Property TypeCarrying
Value
% of
Portfolio(1)
Carrying
Value
% of
Portfolio(1)
Hotel$1,991,936 22.2 %$1,875,439 23.8 %
Office1,808,216 20.2 1,700,779 21.6 
Retail Center1,126,538 12.6 414,740 5.3 
Residential-for-sale886,423 9.9 956,617 12.1 
Healthcare621,800 6.9 316,321 4.0 
Residential-for-rent543,572 6.1 477,569 6.1 
Mixed Use480,677 5.4 269,839 3.4 
Urban Retail353,258 3.9 711,592 9.0 
Industrial335,584 3.7 377,068 4.8 
Other(2)
812,718 9.1 790,884 9.9 
Total$8,960,722 100.0 %$7,890,848 100.0 %
General CECL Allowance(3)
(23,362)(33,588)
Carrying value, net$8,937,360 $7,857,260 

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other property types include parking garages (3.0%), multifamily development (2.5%), caravan parks (2.2%) and urban predevelopment (1.4%) in 2022, and parking garages (3.3%), caravan parks (2.8%), multifamily development (2.2%), and urban predevelopment (1.6%) in 2021.
(3)$4.0 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):
June 30, 2022December 31, 2021
Geographic LocationCarrying
Value
% of
Portfolio(1)
Carrying
Value
% of
Portfolio(1)
United Kingdom$2,401,638 26.8 %$2,297,286 29.1 %
New York City2,236,508 25.0 2,000,661 25.4 
Other Europe(2)
1,506,295 16.8 1,295,870 16.4 
Midwest677,265 7.6 689,274 8.7 
Southeast667,373 7.4 708,920 9.0 
West627,127 7.0 356,097 4.5 
Other(3)
844,516 9.4 542,740 6.9 
Total$8,960,722 100.0 %$7,890,848 100.0 %
General CECL Allowance(4)
(23,362)(33,588)
Carrying value, net$8,937,360 $7,857,260 

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other Europe includes Italy (5.0%), Germany (4.8%), Spain (3.5%), Sweden (2.8%) 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 (2.3%), Mid-Atlantic (1.3%) and Other (0.3%) in 2022 and Southwest (3.5%), Mid-Atlantic (1.6%), Northeast (1.5%), and Other (0.3%) in 2021.
(4)$4.0 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.

Risk Rating
We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows:

    1.    Very low risk
    2.    Low risk
    3. Moderate/average risk
    4. High risk/potential for loss: a loan that has a risk of realizing a principal loss
    5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss, or an impairment has been recorded

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):
June 30, 2022
Year Originated
Risk RatingNumber of LoansTotal% of Portfolio20222021202020192018Prior
1— $— — %$— $— $— $— $— $— 
21 32,000 0.4 %— — — — — 32,000 
361 8,329,775 92.9 %2,042,260 2,495,867 691,610 1,777,227 502,448 820,363 
41 220,487 2.5 %— — — — — 220,487 
54 378,460 4.2 %— — — — — 378,460 
Total67 $8,960,722 100.0 %$2,042,260 $2,495,867 $691,610 $1,777,227 $502,448 $1,451,310 
General CECL Allowance(1)
(23,362)
Total carrying value, net$8,937,360 
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)$4.0 million and $3.1 million of the General CECL Allowance for 2022 and 2021, respectively, is excluded from the tables above because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet
CECL
In accordance with ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments", which we refer to as the "CECL Standard", we record allowances for loans and held-to-maturity debt securities that are deducted from the carrying amount of the assets to present the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance", and together with the Specific CECL Allowance, "CECL Allowances"), in accordance with the CECL Standard on a collective basis by assets with similar risk characteristics. We have elected to use the weighted average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method.
The following schedule illustrates the quarterly changes in CECL Allowances for the six months ended June 30, 2022 and 2021, respectively ($ in thousands):
Specific CECL Allowance(3)
General CECL AllowanceTotal CECL Allowance
CECL Allowance as % of Amortized Cost(3)
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 %
———————
(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-for-sale 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)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.
Specific CECL Allowance(4)
General CECL AllowanceTotal CECL Allowance
CECL Allowance as % of Amortized Cost(4)
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 %
———————
(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)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.

General CECL Allowance
In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions as the result of COVID-19.

We derived an annual historical loss rate based on a commercial mortgage backed securities ("CMBS") database with historical losses from 1998 through the second quarter of 2022 provided by a third party, Trepp LLC. We applied various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate was further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period which we have determined to be one year. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compared the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We used projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. 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.
We have made an accounting policy election to exclude accrued interest receivable ($46.4 million and $41.2 million, as of June 30, 2022 and December 31, 2021, respectively), included in other assets on our condensed consolidated balance sheet, from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance, as any uncollectible accrued interest receivable is written off in a timely manner.
Although our secured debt obligations and senior secured term loan financing have a minimum tangible net worth maintenance covenant, the General CECL Allowance has no impact on these covenants as we are permitted to add back the
General CECL Allowance for the computation of tangible net worth as defined in the respective agreements.
The following schedule sets forth our General CECL Allowance as of June 30, 2022 and December 31, 2021 ($ in thousands):
June 30, 2022December 31, 2021
Commercial mortgage loans, net$19,505 $22,554 
Subordinate loans and other lending assets, net3,857 11,034 
Unfunded commitments(1)
3,999 3,106 
Total General CECL Allowance$27,361 $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.
Specific CECL Allowance
For collateral-dependent loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. Collateral-dependent loans evaluated for a Specific CECL Allowance are removed from the General CECL pool. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date.
We regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. The Specific CECL Allowance is evaluated on a quarterly basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.
The following table summarizes our risk rated 4 and 5 loans as of June 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
Multifamily Development(1)(2)
Brooklyn, NY$220,487$—$220,487Cost Recovery/ 3/1/20204
Urban Predevelopment(2)(3)
Miami, FL190,92968,000122,929Cost Recovery/ 3/1/20205
Retail Center(4)(5)
Cincinnati, OH171,25567,000104,255 Cost Recovery/ 10/1/20195
Hotel(6)
Atlanta, GA106,2967,00099,296Cash Basis/ 5/1/20225
Mortgage total:$688,967$142,000$546,967
Mezzanine
Residential-for-Sale(7)
Manhattan, NY$81,980$30,000$51,980Cash Basis/ 7/1/20215
Mezzanine total:$81,980$30,000$51,980
Total:$770,947$172,000$598,947
———————
(1)During the three months ended June 30, 2022, the previously recorded $10.0 million Specific CECL Allowance was reversed as a result of market rent growth and value created from development activities. The loan remains on cost recovery and the risk rating has been upgraded from a 5 to a 4 as of June 30, 2022.
(2)The fair value of this collateral was determined by assuming rent per square foot ranging from $62 to $215 and a capitalization rate ranging from 5.0% to 5.5%.
(3)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 six months ended June 30, 2022 and 2021.
(4)The fair value of retail collateral was determined by applying a capitalization rate of 8.0%.
(5)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 six months ended June 30, 2022 and 2021, $0.3 million and $0.6 million, respectively and $0.4 million and $0.8 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 six months ended June 30, 2022 and 2021.
(6)The fair value of the hotel collateral was determined by applying a capitalization rate of 9.3% and a discount rate of 11.3%.
(7)The fair value of the residential-for-sale collateral was determined by making certain projections and assumptions with respect to future performance and a discount rate of 10%.
We cease accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. Under certain circumstances, we may apply the cost recovery method under which interest collected on a loan reduces the loan's amortized cost. The amortized cost basis for loans on cost recovery was $447.7 million and $404.8 million as of June 30, 2022 and December 31, 2021, respectively. For the three and six months ended June 30, 2022 and 2021, we received $0.3 million and $0.6 million and $0.4 million and $0.8 million, respectively, in interest that reduced amortized cost under the cost recovery method.
As of June 30, 2022 and December 31, 2021, the amortized cost basis for loans with accrued interest past due 90 or more days was $714.0 million and $757.6 million, respectively. As of June 30, 2022 the amortized cost basis for loans with accrued interest between 30 and 59 days past due was $99.3 million. As of December 31, 2021, there were no loans with interest between 30 and 59 days past due.
We evaluate modifications to our loan portfolio to determine if the modifications constitute a TDR and/or substantial modification, under ASC Topic 310 "Receivables".
We own three mezzanine loans secured by an ultra luxury residential-for-sale property in Manhattan, NY which had an aggregate amortized cost at June 30, 2022 of $513.4 million (inclusive of $142.9 million of payment- in-kind ("PIK") interest) and are secured by the same residential-for-sale property currently under construction in Manhattan, NY. These loans include (i) a $247.1 million senior mezzanine loan ("Senior Mezzanine Loan"), (ii) a $214.3 million junior mezzanine loan ("Junior Mezzanine A Loan"), and (iii) a $52.0 million junior mezzanine (net of a $30.0 million Specific CECL Allowance) ("Junior Mezzanine B Loan" together with the Junior Mezzanine A Loan collectively referred to as "Junior Mezzanine Loan"). During the third quarter of 2021, a vehicle (the "Seller") managed by an affiliate of the Manager transferred its Junior Mezzanine B Loan position to the Company and in connection with this transfer, one of the property’s subordinate capital providers paid the Seller a price representing the Seller’s original principal balance on the Junior Mezzanine B Loan position with the Seller agreeing to forego its accrued interest on the Junior Mezzanine B Loan based on a change in the estimated sales velocity of the collateral.
In conjunction with this transaction, the Company and the subordinate capital provider have agreed to a waterfall sharing arrangement pursuant to which, rather than the Company receiving interest it otherwise would have been entitled to after July 1, 2021 on the Junior Mezzanine Loan, proceeds received from the sale or refinance of the underlying collateral, after repayment to priority lenders under the waterfall, will be shared between the Company and the subordinate capital provider at an agreed upon allocation. As such, we opted to cease accruing interest on the Junior Mezzanine Loan as of July 1, 2021 and will resume doing so when we deem appropriate. As of March 31, 2022, sales velocity on the underlying property lagged behind the borrower's business plan and management's expectations. Based on this information as of March 31, 2022, we deemed the borrower to be experiencing financial difficulty and accordingly changed the risk rating to a 5 and recorded $30.0 million of Specific CECL Allowance on the Junior Mezzanine B Loan. As of June 30, 2022, our amortized cost basis in this loan was $52.0 million, and its risk rating remained as a 5.
In March 2017 we originated a first mortgage secured by a hotel in Atlanta, GA. As of May 1, 2022, due to slower than expected recovery from the COVID-19 pandemic, we ceased accruing interest and will record interest on cash-basis. As of June 30, 2022, we recorded a $7.0 million Specific CECL Allowance and the risk rating was downgraded from a 4 to a 5.
Other Loan and Lending Assets Activity
We recognized PIK interest of $4.5 million and $5.7 million for the three and six months ended June 30, 2022 respectively, and $13.7 million and $30.6 million for the three and six months ended June 30, 2021, respectively.
We recognized $0.3 million and $2.4 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2022, respectively. We recognized $0.7 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2021.
As of June 30, 2022 and December 31, 2021, our portfolio included other lending assets, which are subordinate risk retention interests in securitization vehicles. The underlying mortgages related to our subordinate risk retention interests are secured by a portfolio of properties located throughout the United States. Our maximum exposure to loss from the subordinate risk retention interests is limited to the book value of such interests. The book value as of June 30, 2022 was $51.1 million, consisting of one interest with a weighted average maturity of 2.0 years and $64.6 million as of December 31, 2021 consisting of two interests with weighted average maturity of 4.5 years. We are not obligated to provide, and do not intend to provide financial support to these subordinate risk retention interests. These interests are accounted for as held-to-maturity and recorded at carrying value on our condensed consolidated balance sheet.
In November 2020, the borrower under a £309.2 million commercial mortgage loan ($422.7 million assuming conversion into U.S. Dollars ("USD")), of which we owned £247.5 million ($338.4 million assuming conversion into USD), secured by an urban retail property located in London, United Kingdom, entered into administration triggering an event of default. In accordance with the loan agreement, we were entitled to collect default interest in addition to the contractual interest we had been earning. During the first quarter of 2022, our commercial mortgage loan was fully satisfied and all accrued contractual and default interest was collected.
Held for Sale
Loans are classified as held for sale if there is an intent to sell them in the short-term following the reporting date. Loans classified as held for sale are carried at the lower of amortized cost or fair value less costs to sell, unless the fair value option is elected at origination. Additionally, held for sale loans are not subject to the General CECL Allowance.
Due to our intent to sell, we reclassified one of our subordinate loans to held for sale during the three months ended June 30, 2022. The loan is collateralized by an office property located in Troy, MI, and had an amortized cost of $7.5 million as of June 30, 2022. The loan has a risk rating of 3 as of June 30, 2022.