We originate first mortgage loans secured by middle market and transitional CRE, which are generally to be held as long term investments. We fund our loan portfolio using cash on hand and advancements under our Secured Financing Facilities, as defined in Note 4. See Note 4 for further information regarding our secured financing agreements.


	As of March 31, 2023			As of December 31, 2022
Number of loans	25			27
Total loan commitments	$	674,475		$	727,562
Unfunded loan commitments (1)	$	45,779		$	49,007
Principal balance	$	628,696		$	678,555


Carrying value	$	617,935		$	669,929
Weighted average coupon rate	8.57		%	8.07		%
Weighted average all in yield (2)	9.06		%	8.57		%
Weighted average floor	0.65		%	0.62		%
Weighted average maximum maturity (years) (3)	3.1			3.3
Weighted average risk rating	2.9			2.9


	Principal Balance		Deferred Fees and Other Items		Amortized Cost
Balance at December 31, 2022	$	678,555	$	(8,626)	$	669,929
Additional funding	1,884		(14)		1,870

Repayments	(51,743)		(175)		(51,918)
Net amortization of deferred fees	—		1,004		1,004
Purchase discount accretion	—		1,185		1,185
Balance at March 31, 2023	$	628,696	$	(6,626)	$	622,070


	Principal Balance		Deferred Fees and Other Items		Amortized Cost
Balance at December 31, 2021	$	590,590	$	(19,810)	$	570,780
Additional funding	3,304		—		3,304
Originations	91,184		(1,148)		90,036
Repayments	(48,247)		—		(48,247)
Net amortization of deferred fees	—		902		902

Purchase discount accretion	—		5,935		5,935
Balance at March 31, 2022	$	636,831	$	(14,121)	$	622,710


	March 31, 2023					December 31, 2022
Property Type	Number of Loans	Amortized Cost		Percentage of Value		Number of Loans	Amortized Cost		Percentage of Value
Office (1)	10	$	244,302	39	%	11	$	252,796	38	%
Multifamily	8	198,390		32	%	8	197,229		29	%

Retail	4	110,037		18	%	4	109,248		16	%
Industrial (1)	3	69,341		11	%	4	110,656		17	%

	25	$	622,070	100	%	27	$	669,929	100	%

(1) As of December 31, 2022, one loan investment secured by a mixed use property consisting of office space and an industrial warehouse in Aurora, IL was classified as office for the purpose of counting the number of loans in our portfolio because the majority of the square footage of the property consisted of office space. The amortized cost of this loan investment was reflected in office and industrial based on the fair value of the building at the time of origination relative to the total fair value of the property. During the three months ended March 31, 2023, our loan investment in Aurora, IL was repaid.


	March 31, 2023					December 31, 2022
Geographic Location	Number of Loans	Amortized Cost		Percentage of Value		Number of Loans	Amortized Cost		Percentage of Value
Midwest	8	$	235,289	38	%	9	$	251,208	37	%
West	8	148,085		24	%	8	146,837		22	%
South	5	133,243		21	%	6	166,616		25	%
East	4	105,453		17	%	4	105,268		16	%
	25	$	622,070	100	%	27	$	669,929	100	%

We evaluate the credit quality of each of our loans at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The higher the number, the greater the risk level. See our 2022 Annual Report for more information regarding our loan risk ratings.


March 31, 2023
Risk Rating	Number of Loans	Percentage of Portfolio		2023		2022		2021		Prior		Total
1	1	2	%	$	—	$	—	$	—	$	9,496	$	9,496
2	5	20	%	—		41,952		31,483		52,289		125,724
3	16	63	%	—		128,678		236,711		29,001		394,390
4	3	15	%	—		36,538		39,970		15,952		92,460
5	—	—	%	—		—		—		—		—
	25	100	%	$	—	$	207,168	$	308,164	$	106,738	$	622,070


December 31, 2022
Risk Rating	Number of Loans	Percentage of Portfolio		2022		2021		2020		Prior		Total
1	1	1	%	$	—	$	—	$	9,708	$	—	$	9,708
2	6	20	%	—		65,902		68,740		—		134,642
3	17	65	%	169,516		235,602		—		28,998		434,116
4	3	14	%	36,506		39,314		—		15,643		91,463
5	—	—	%	—		—		—		—		—
	27	100	%	$	206,022	$	340,818	$	78,448	$	44,641	$	669,929

The weighted average risk rating of our loans by carrying value was 2.9 as of March 31, 2023 and December 31, 2022, respectively. Certain of our borrowers' business operations or tenants, particularly certain office and retail properties, were negatively impacted by the COVID-19 pandemic and continue to be impacted by market conditions that arose or intensified during or in response to the pandemic and which have continued to be impacted. Current inflationary pressures, rising or sustained high interest rates, supply chain issues or a prolonged economic slowdown or recession could amplify those negative impacts. Therefore, certain of our borrowers’ business plans have taken or will likely take longer to execute than initially expected, and as a result, certain of our borrowers may be unable to pay their debt service obligations owed and due to us as currently scheduled or at all.


	Loans Held For Investment, net		Unfunded Loan Commitments		Total
Balance at December 31, 2022	$	—	$	—	$	—
Cumulative-effect adjustment upon adoption of ASU No. 2016-13	4,893		1,702		6,595
Reversal of credit losses	(758)		(229)		(987)


Balance At March 31, 2023	$	4,135	$	1,473	$	5,608

We may enter into loan modifications that include, among other changes, extensions of maturity dates, repurposing or required replenishment of reserves, increases or decreases in loan commitments and required pay downs of principal amounts outstanding. Loan modifications are evaluated to determine whether a modification results in a new loan or a continuation of an existing loan under ASC 310. There were no such modifications to our loan portfolio for borrowers experiencing financial difficulties during the three months ended March 31, 2023.

We estimate credit losses over a reasonable and supportable forecast period of 12 months, followed by a straight-line reversion period of 12 months back to average historical losses. The decrease in the allowance for credit losses during the three months ended March 31, 2023, compared to the January 1, 2023 cumulative-effect adjustment upon adoption of ASU No. 2016-13, is primarily attributable to favorable changes in the macroeconomic outlook, most notably in near-term CRE pricing forecasts, and loan repayments.

We have elected to exclude accrued interest receivable from amortized cost and not to measure an allowance for credit losses on accrued interest receivable. Accrued interest receivables are generally written off when payments are 120 days past due. Such amounts are reversed against interest income and no further interest will be recorded until it is collected.

We did not have any past due loans or nonaccrual loans as of March 31, 2023 or December 31, 2022. As of March 31, 2023 and April 20, 2023, all of our borrowers had paid all of their debt service obligations owed and due to us. See our 2022 Annual Report for more information regarding our nonaccrual policy.