UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended March 31, 2021

 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-55188

BENEFIT STREET PARTNERS REALTY TRUST, INC.

(Exact name of registrant as specified in its charter) 

Maryland	46-1406086
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
9 West 57th Street, Suite #4920 New York, New York	10019
(Address of Principal Executive Office)	(Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company ☐
	Emerging growth filer ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant's common stock, $0.01 par value, outstanding as of April 30, 2021 was 44,261,878.

BENEFIT STREET PARTNERS REALTY TRUST, INC.

TABLE OF CONTENTS

PART I	Page
Item 1. Consolidated Financial Statements and Notes (unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3. Quantitative and Qualitative Disclosures about Market Risk	70
Item 4. Controls and Procedures	71
PART II
Item 1. Legal Proceedings	72
Item 1A. Risk Factors	72
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3. Defaults Upon Senior Securities	72
Item 4. Mine Safety Disclosures	72
Item 5. Other Information	72
Item 6. Exhibits	73
Signatures	74

i

PART I

Item 1. Consolidated Financial Statements and Notes (unaudited)

1

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31, 2021		December 31, 2020
ASSETS	(Unaudited)
Cash and cash equivalents	$	99,099	$	82,071
Restricted cash	11,808		10,070
Commercial mortgage loans, held for investment, net of allowance of $18,600 and $20,886 as of March 31, 2021 and December 31, 2020, respectively	3,010,098		2,693,848
Commercial mortgage loans, held for sale, measured at fair value	93,117		67,649
Real estate securities, available for sale, measured at fair value, amortized cost of $19,079 and $179,392 as of March 31, 2021 and December 31, 2020, respectively	18,865		171,136
Derivative instruments, measured at fair value	1,863		25
Other real estate investments, measured at fair value	2,528		2,522
Receivable for loan repayment (1)	215,991		98,551
Accrued interest receivable	16,475		15,295
Prepaid expenses and other assets	5,676		8,538
Intangible lease asset, net of amortization	13,340		13,546
Real estate owned, net of depreciation	26,310		26,510
Real estate owned, held for sale	37,523		—
Total assets	$	3,552,693	$	3,189,761
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations	$	2,075,611	$	1,625,498
Repurchase agreements - commercial mortgage loans	152,925		276,340
Repurchase agreements - real estate securities	88,272		186,828
Mortgage note payable	29,167		29,167
Other financing and loan participation - commercial mortgage loans	34,017		31,379
Unsecured debt	100,000		—
Derivative instruments, measured at fair value	1,105		403
Interest payable	1,446		2,110
Distributions payable	14,585		15,688
Accounts payable and accrued expenses	6,361		5,125
Due to affiliates	10,477		9,525
Total liabilities	$	2,513,966	$	2,182,063
Commitment and contingencies (See Note 10)
Redeemable convertible preferred stock Series A, $0.01 par value, 60,000 authorized and 25,566 and 40,515 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	$	127,581	$	202,292
Redeemable convertible preferred stock Series C, $0.01 par value, 20,000 authorized and 1,400 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	6,964		6,962
Redeemable convertible preferred stock Series D, $0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of March 31, 2021 and none issued or outstanding as of December 31, 2020, respectively	89,722		—
Equity:
Preferred stock, $0.01 par value, 50,000,000 authorized and none issued or outstanding as of March 31, 2021 and December 31, 2020, respectively	—		—
Common stock, $0.01 par value, 949,999,000 shares authorized, 44,135,659 and 44,510,051 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	443		446
Additional paid-in capital	906,200		912,725
Accumulated other comprehensive income (loss)	(214)		(8,256)
Accumulated deficit	(91,969)		(106,471)
Total stockholders' equity	$	814,460	$	798,444
Total liabilities, redeemable convertible preferred stock and stockholders' equity	$	3,552,693	$	3,189,761

__________________________________

(1) Includes $216.0 million and $98.6 million of cash held by servicer related to the CLOs as of March 31, 2021 and December 31, 2020, respectively.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2021		2020
Income:
Interest income	$	42,237	$	47,854
Less: Interest expense	11,369		24,492
Net interest income	30,868		23,362
Revenue from real estate owned	716		1,629
Total Income	$	31,584	$	24,991
Expenses:
Asset management and subordinated performance fee	5,416		3,912
Acquisition expenses	153		142
Administrative services expenses	3,474		4,112
Professional fees	1,997		2,784
Real estate owned operating expenses	—		1,645
Depreciation and amortization	406		588
Other expenses	495		1,587
Total expenses	$	11,941	$	14,770
Other (income)/loss:
Provision/(benefit) for credit losses	(2,331)		14,597
Impairment losses on real estate owned assets	—		398
Realized (gain)/loss on sale of real estate securities	1,060		438
Realized (gain)/loss on sale of commercial mortgage loan, held for sale, measured at fair value	(6,630)		(9,404)
Unrealized (gain)/loss on commercial mortgage loans, held for sale, measured at fair value	(479)		1,934
Unrealized (gain)/loss on other real estate investments, measured at fair value	(6)		61
Unrealized (gain)/loss on derivatives	(2,109)		4,836
Realized (gain)/loss on derivatives	(1,978)		6,669
Total other (income)/loss	$	(12,473)	$	19,529
Income/(loss) before taxes	32,116		(9,308)
Provision/(benefit) for income tax	1,970		(1,908)
Net income/(loss)	$	30,146	$	(7,400)
Net income/(loss) applicable to common stock	$	23,408	$	(11,915)
Basic earnings per share	$	0.53	$	(0.27)
Diluted earnings per share	$	0.53	$	(0.27)
Basic weighted average shares outstanding	44,290,177		44,263,334
Diluted weighted average shares outstanding	44,306,065		44,274,852

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2021		2020
Net income/(loss)	$	30,146	$	(7,400)
Unrealized gain/(loss) on available for sale securities	8,042		(67,607)
Comprehensive income/(loss) attributable to Benefit Street Partners Realty Trust, Inc.	$	38,188	$	(75,007)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock
	Number of Shares	Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balance, December 31, 2020	44,510,051	$	446	$	912,725	$	(8,256)	$	(106,471)	$	798,444
Issuance of common stock	—	—		—		—		—		—
Common stock repurchases	(521,796)	(5)		(9,142)		—		—		(9,147)
Common stock issued through distribution reinvestment plan	147,404	2		2,583		—		—		2,585
Share-based compensation	—	—		55		—		—		55
Offering costs	—	—		(21)		—		—		(21)
Net income	—	—		—		—		30,146		30,146
Distributions declared	—	—		—		—		(15,644)		(15,644)
Other comprehensive income	—	—		—		8,042		—		8,042
Balance, March 31, 2021	44,135,659	$	443	$	906,200	$	(214)	$	(91,969)	$	814,460
Balance, December 31, 2019	43,916,815	$	441	$	903,310	$	(978)	$	(85,968)	$	816,805
Issuance of common stock	650,034	7		10,855		—		—		10,862
Common stock repurchases	(361,829)	(4)		(6,711)		—		—		(6,715)
Common stock issued through distribution reinvestment plan	191,326	1		3,548		—		—		3,549
Share-based compensation	—	—		39		—		—		39
Offering costs	—	—		(136)		—		—		(136)
Net income/(loss)	—	—		—		—		(7,400)		(7,400)
Distributions declared	—	—		—		—		(20,371)		(20,371)
Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)	—	—		—		—		(7,761)		(7,761)
Other comprehensive income	—	—		—		(67,607)		—		(67,607)
Balance, March 31, 2020	44,396,346	$	445	$	910,905	$	(68,585)	$	(121,500)	$	721,265

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income/(loss)	$	30,146	$	(7,400)
Adjustments to reconcile net income/(loss) to net cash (used in)/provided by operating activities:
Premium amortization and (discount accretion), net	$	(1,169)	$	(1,710)
Accretion of deferred commitment fees	(1,488)		(1,233)
Amortization of deferred financing costs	1,335		5,684
Share-based compensation	55		39
Realized (gain)/loss from sale of real estate securities	1,060		438
Unrealized (gain)/loss from commercial mortgage loans held for sale	(479)		1,934
Unrealized (gain)/loss from derivative instruments	(2,109)		4,836
Unrealized losses from other real estate investments	(6)		61
Depreciation and amortization	406		588
Recognition of deferred rent revenue	—		(89)
Provision/(benefit) for credit losses	(2,331)		14,597
Impairment losses on real estate owned assets	—		398
Origination of commercial mortgage loans, held for sale	(166,360)		(119,349)
Proceeds from sale of commercial mortgage loans, held for sale	141,372		138,164
Changes in assets and liabilities:
Accrued interest receivable	308		1,664
Prepaid expenses and other assets	1,850		(6,300)
Accounts payable and accrued expenses	1,570		(2,068)
Due to affiliates	952		9,249
Interest payable	(664)		(2,072)
Net cash (used in)/provided by operating activities	$	4,448	$	37,431
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans, held for investment	$	(520,849)	$	(287,644)
Principal repayments received on commercial mortgage loans, held for investment	52,800		426,742
Purchase of other real estate investments	—		(624)
Purchase of real estate securities	—		(134,818)
Principal repayments received on real estate securities	—		643
Proceeds from sale/repayment of real estate securities	159,254		—
Purchase of derivative instruments	973		(689)
Net cash (used in)/provided by investing activities	$	(307,822)	$	3,610
Cash flows from financing activities:
Proceeds from issuances of common stock	$	—	$	10,726
Proceeds from issuances of redeemable convertible preferred stock	15,000		70
Common stock repurchases	(9,147)		(6,716)
Borrowings under collateralized loan obligation	573,125		—
Repayments of collateralized loan obligation	(119,425)		(68,894)
Borrowings on repurchase agreements - commercial mortgage loans	168,655		65,413
Repayments of repurchase agreements - commercial mortgage loans	(292,070)		(83,432)
Borrowings on repurchase agreements - real estate securities	168,550		340,116

6

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Repayments of repurchase agreements - real estate securities	(267,106)		(237,596)
Proceeds from other financing and loan participation - commercial mortgage loans	2,638		15,190
Proceeds from unsecured debt	100,000		—
Borrowing on mortgage note payable	—		11,000
Payments of deferred financing costs	(3,944)		(75)
Distributions paid	(14,136)		(16,776)
Net cash (used in)/provided by financing activities:	$	322,140	$	29,026
Net change in cash, cash equivalents and restricted cash	18,766		70,067
Cash, cash equivalents and restricted cash, beginning of period	92,141		109,122
Cash, cash equivalents and restricted cash, end of period	$	110,907	$	179,189
Supplemental disclosures of cash flow information:
Taxes paid	$	—	$	—
Interest paid	10,698		20,880
Supplemental disclosures of non - cash flow information:
Distribution payable	$	14,585	$	6,956
Common stock issued through distribution reinvestment plan	2,585		3,548
Commercial mortgage loans transferred from held for sale to held for investment	—		9,619
Real estate owned received in foreclosure	37,523		14,000
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	99,099	$	88,960
Restricted cash	11,808		90,229
Cash, cash equivalents and restricted cash, end of period	$	110,907	$	179,189

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 1 - Organization and Business Operations

Benefit Street Partners Realty Trust, Inc. (the "Company") is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced operations on May 14, 2013.

The Company made a tax election to be treated as a real estate investment trust (a "REIT") for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. In addition, the Company, through a subsidiary which is treated as a taxable REIT subsidiary (a "TRS") is indirectly subject to U.S federal, state and local income taxes. The majority of the Company's business is conducted through Benefit Street Partners Realty Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the units of limited partner interests in the OP.

The Company has no direct employees. Benefit Street Partners L.L.C. serves as the Company's advisor (the "Advisor") pursuant to an Amended and Restated Advisory Agreement, dated January 19, 2018 (the "Advisory Agreement"). The Advisor is a wholly owned subsidiary of Franklin Resources, Inc. which, together with its various subsidiaries, operates as Franklin Templeton. The Advisor, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), is a credit-focused alternative asset management firm. Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of the Company's assets and the operations of the Company.

The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") at a profit. The Company also invests in commercial real estate securities. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs"). The Company also owns real estate acquired by the Company through foreclosure and deed in lieu of foreclosure, and purchased for investment, typically subject to triple net leases.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The Company's unaudited consolidated financial statements and related footnotes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2020, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2021.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods.

8

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

In response to the global coronavirus (COVID-19) pandemic, numerous countries, including the U.S., have declared national emergencies with respect to COVID-19 and certain jurisdictions, including those where our corporate headquarters and/or properties that secure our investments, or properties that the Company owns, are located, have at times imposed “stay-at-home” guidelines or orders or other restrictions to help prevent its spread. The effects of COVID-19 may negatively and materially impact significant estimates and assumptions used by the Company including, but not limited to estimates of expected credit losses, valuation of our equity investments and the fair value estimates of the Company's assets and liabilities. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members, as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary.

The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.

The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.

Acquisition Expenses

The Company capitalizes certain direct costs relating to loan origination activities. The cost is amortized over the life of the loan and recognized in interest income in the Company's consolidated statements of operations. Acquisition expenses paid on future funding amounts are expensed within the acquisition expenses line in the Company's consolidated statements of operations.

Cash and Cash Equivalents

Cash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased.

Restricted Cash

Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions. The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.

Commercial Mortgage Loans

Held for Investment - Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, are carried at amortized cost less a specific allowance for credit losses. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Guaranteed loan commitment fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan commitment fees is recognized in interest income in the Company's consolidated statements of operations.

9

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Held for Sale - Commercial mortgage loans that are intended to be sold in the foreseeable future are reported as held for sale and are transferred at fair value and recorded at the lower of cost or fair value with changes recorded through the statements of operations. Unamortized loan origination costs for commercial mortgage loans held for sale that are carried at the lower of cost or fair value are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial mortgage loans to held for sale.

Held for Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held for sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in the Commercial mortgage loans, held for sale, measured at fair value in the consolidated balance sheets. Interest income received on commercial mortgage loans, held for sale, measured at fair value is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.

Real estate owned

Real estate owned (“REO”) assets represent real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase. REO assets are carried at their estimated fair value at acquisition and are presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired assets such as land, building, furniture, fixtures and equipment. Asset acquisitions in which monetary consideration is given generally include the transaction costs of the asset acquisition. Acquiring assets in groups requires not only ascertaining the cost of the asset (or net asset) group but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. The cost of a group of assets acquired in an asset acquisition shall be allocated to the individual assets acquired or liabilities assumed based on their relative fair values and shall not give rise to goodwill.

Real estate owned assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate owned assets are capitalized and depreciated over their estimated useful lives. Real estate owned revenue is recognized when the Company satisfies a performance obligation by transferring a promised good or service to a customer. The Company is considered to have satisfied all performance obligations at a point in time.

Real estate owned assets that are probable to be sold within one year are reported as held for sale. Real estate owned assets classified as held for sale shall be measured at the lower of its carrying amount or fair value less cost to sell. Real estate owned assets shall not be depreciated or amortized while it is classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. Upon the disposition of a real estate owned asset, the Company calculates realized gains and losses as net proceeds received less the carrying value of the real estate owned asset. Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.

Leases

Operating right of use assets "ROU" represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. Leases will be classified as either a finance or operating lease, with such classification affecting the pattern and classification of expense recognition in the consolidated statements of operations. For leases greater than 12 months, the Company determines, at the inception of the contract, if the arrangement meets the classification criteria for an operating or finance lease. For leases that have extension options, which can be exercised at the Company's discretion, management uses judgment to determine if it is reasonably certain that such extension options will be elected. If the extension options are reasonably certain to occur, the Company includes the extended term's lease payments in the calculation of the respective lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The incremental borrowing rate used to discount the lease liability is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company's incremental borrowing rate considers information at both the corporate and property level and analysis of current market conditions for obtaining new financings. All leases as of March 31, 2021 were operating leases.

Separately, on October 15, 2019, the Company acquired certain real estate assets which had an existing in-place lease asset. This in-place lease asset is recorded as an Intangible lease asset on the consolidated balance sheets and amortized using the straight-line method over the contractual life of the lease.

10

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Credit Losses

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses, which amends the credit impairment model for financial instruments. The Company adopted ASU 2016-13 on January 1, 2020.

Following our adoption of ASU 2016-13, our previous incurred loss model was replaced with a lifetime current expected credit loss (“CECL”) model for financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans, loan commitments, held-to-maturity (“HTM”) debt securities, financial guarantees, net investments in leases, reinsurance and trade receivables, which will generally result in earlier recognition of allowance for losses. For available for sale (“AFS”) debt securities, unrealized credit losses are recognized as allowances rather than reductions in amortized cost basis and elimination of the other than temporary impairment concept will result in more frequent estimation of credit losses. The accounting model for purchased credit impaired loans and debt securities has been simplified, including elimination of some of the asymmetrical treatment between credit losses and credit recoveries, to be consistent with the CECL model for originated and purchased non-credit impaired assets. The adopted model for ASC 326 as it applies to HTM and AFS securities, encompassing the beneficial interest model for securities that are not of high credit quality, has been clarified to include the effective interest method as a basis for the projection of cash collections method in connection with the newly adopted impairment models for HTM and AFS debt securities under ASC 326 when securities are not of high credit quality. 

The allowance for credit losses required under ASU 2016-13 is deducted from the respective loans’ amortized cost basis on the Company’s consolidated balance sheets. The allowance for credit losses attributed to unfunded loan commitments is included in Accounts payable and accrued expenses on the consolidated balance sheets. The guidance also required a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

The following discussion highlights changes to the Company’s accounting policies as a result of this adoption.

Allowance for credit losses

The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a discounted cash flow (“DCF”) methodology.

For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the allowance for credit losses.

11

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

In developing the allowance for credit losses for its loans held for investment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability, using similar factors as those in developing the allowance for credit losses. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:

1.Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.

2.Low Risk- Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.

3.Average Risk- Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.

4.High Risk/Delinquent/Potential for Loss- Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.

5.Impaired/Defaulted/Loss Likely- Underperforming investment with expected loss of interest and some principal.

The Company also considers qualitative and environmental factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the allowance for credit losses.

Changes in the allowance for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

The Company has elected to not measure an allowance for credit losses for accrued interest receivable as it is timely, following three months time, reversed against interest income when a loan, real estate security or preferred equity investment is placed on nonaccrual status. The Company did not record reversals of accrued interest receivable during the three months ended March 31, 2021. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion of the principal amount is determined to be uncollectible.

Past due and nonaccrual status

Loans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company may return a loan to accrual status when repayment of principal and interest is reasonably assured.

Troubled Debt Restructuring (“TDR”)

The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concession to the borrower who is experiencing financial difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. The Company determines the allowance for credit losses for financial instruments that are TDRs individually.

Real Estate Securities

On the acquisition date, all of the Company’s commercial real estate securities were classified as available for sale and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss. The Company may elect the fair value option for its real estate securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statements of operations. No such election has been made to date. Related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. The Company uses the specific identification method in determining the cost relief for real estate securities sold. Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.

12

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.

The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.

The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to accumulated other comprehensive income in the consolidated balance sheets.

Repurchase Agreements

Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities. Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.

Deferred Financing Costs

The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized loan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized loan obligations on the consolidated balance sheets. Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.

Share Repurchase Program

The Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares to the Company, subject to certain conditions. Refer to Note 9 - Stock Transactions for a description of the SRP. When a stockholder requests a redemption and the redemption is approved by the board of directors, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.

Offering and Related Costs

Since 2018, the Company has from time to time offered, and may in the future offer, shares of the Company’s common stock or one or more series of its preferred stock (“Preferred Stock”), including its Series A convertible preferred stock (“Series A Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock,”) and Series D convertible preferred stock (the “Series D Preferred Stock,” and together with the Series A Preferred Stock and Series C Preferred Stock, the “Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended. In connection with these offerings, the Company incurs various offering costs. These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers. Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Preferred Stock are included within Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, on the Company’s consolidated balance sheets.

13

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Distribution Reinvestment Plan

Pursuant to the Company's distribution reinvestment plan ("DRIP") stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. The purchase price for shares purchased through the DRIP is the lesser of (i) the Company’s most recent estimated per share net asset value ("NAV"), and (ii) the Company’s most recently disclosed GAAP book value per share. There is no market for our common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the consolidated balance sheets in the period distributions are declared.

Income Taxes

The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax provision/(benefit) for the three months ended March 31, 2021 and March 31, 2020 was $2.0 million and $(1.9) million, respectively.

The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 2017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.

The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.

Derivatives and Hedging Activities

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives.  The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

The Company recognizes all derivatives on the consolidated balance sheets at fair value.  The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.

Per Share Data

The Company’s Preferred Stock is considered a participating security and the Company calculates basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Preferred Stock, except when doing so would be anti-dilutive.

14

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Reportable Segments

The Company has determined that it has four reportable segments based on how the chief operating decision maker reviews and manages the business. The four reporting segments are as follows:

•The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

•The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

•The commercial conduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

See Note 15 - Segment Reporting for further information regarding the Company's segments.

Redeemable Convertible Preferred Stock

The Company’s outstanding Preferred Stock is classified outside of permanent equity in the consolidated balance sheets. Subject to certain conditions, the outstanding Preferred Stock is redeemable at the option of the holders of the Preferred Stock, outside of the control of the Company.

Series A Preferred Stock

The Series A Preferred Stock ranks senior to the Company’s common stock, par value $0.01 per share (“Common Stock”), and on parity with all other outstanding classes of preferred stock of the Company (including the Series C and Series D Preferred Stock) with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series A Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series A Preferred Stock into Common Stock.

Dividends are on the Series A Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share (subject to a 1.0% increase in the event of the ratings for the Series A Preferred Stock decreases below a certain threshold) and (ii) the dividends that would have been paid had such share of Series A Preferred Stock been converted into a share of Common Stock on the first day of such quarter, subject to proration in the event the share of Series A Preferred Stock is not outstanding for the full quarter. Dividends are paid in arrears. Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.

Immediately prior to a “Liquidity Event,” each outstanding share of Series A Preferred Stock shall convert into 299.2 shares of Common Stock, subject to anti-dilution adjustments described in the Articles Supplementary (the “Conversion Rate”). A “Liquidity Event” is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchange for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system.

If there has not been a Liquidity Event by June 25, 2024 (six years from the initial issuance of the Series A Preferred Stock), each holder of Series A Preferred Stock shall have the right to require the Company to redeem its Series A Preferred Stock for cash at the liquidation preference, or such holder may convert all, but not less than all, of the Series A Preferred Stock held by such holder into Common Stock at the Conversion Rate.

In the event of the sale of all or substantially all of the business or assets of the Company (by sale, merger, consolidation or otherwise) or the acquisition by any person of more than 50% of the total economic interests or voting power of all securities of the Company (a “Company Change of Control”), other than a Liquidity Event, each holder of Series A Preferred Stock will have the right, prior to consummation of such transaction, to convert its Series A Preferred Stock into Common Stock at the Conversion Rate. In addition, in the event of a change of control of the Advisor (as defined in the Articles Supplementary) or a Company Change of Control that is not a Liquidity Event and that is related to the removal of the Advisor, both the Company and the holder shall have the right, prior to consummation of the transaction, to require the redemption of the Series A Preferred Stock for the liquidation preference.

15

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Holders of the Series A Preferred Stock (voting as a single class with holders of Common Stock and other classes of voting Preferred Stock) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote. The number of votes applicable to a share of outstanding Series A Preferred Stock will be equal to the number of shares of Common Stock a share of Series A Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series A Preferred Stock is required to approve the issuance of any equity securities senior to the Series A Preferred Stock and to take certain actions materially adverse to the holders of the Series A Preferred Stock.

Series C Preferred Stock

The Series C Preferred Stock is on parity with the Series A Preferred Stock with respect to preference on liquidation and dividend rights. Except as set forth below, the terms of the Series C Preferred Stock are substantially the same as the terms of the Series A Preferred Stock:

•The Series C Preferred Stock is not rated and its dividend rate is not impacted by changes in ratings.

•The are no anti-dilution adjustments to the Conversion Price based on share issuances at below GAAP book value.

•The Series C Preferred Stock will not immediately convert upon a Liquidation Event; the mandatory conversion will occur on the one-year anniversary of the Liquidity Event. The Company has the option to accelerate the mandatory conversion date to a date no earlier than six months after the Liquidity Event upon 10 days’ notice to the holders.

•A Company Change of Control that is also a Liquidity Event will trigger the Change of Control redemption right.

•The optional conversion and redemption provisions are effective on and after on October 18, 2025 (rather than June 25, 2024).

•With respect to voting rights on issuance of any equity securities senior to the Series C Preferred Stock and certain other actions materially adverse to the holders of the Series C Preferred Stock, the Series C Preferred Stock holders will vote as a single class with other parity Preferred Stock (except the Series A Preferred Stock).

Series D Preferred Stock

The Series D Preferred Stock is on parity with the Series A Preferred Stock and Series C Preferred Stock with respect to preference on liquidation and dividend rights. The terms of the Series D Preferred Stock are substantially the same as the terms of the Series A Preferred Stock, except that the Series D Preferred Stock will not immediately convert upon a Liquidation Event; the mandatory conversion will occur on the one-year anniversary of the Liquidity Event. The holders have the option to accelerate the mandatory conversion date to a date no earlier than six months after the Liquidity Event.

The complete terms of the Company’s Preferred Stock are set forth in the Articles Supplementary applicable to each class, which have been filed as exhibits to the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended.

Accounting Pronouncements Not Yet Adopted

On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company has not adopted any of the optional expedients or exceptions through March 31, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

16

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 3 - Commercial Mortgage Loans

The following table is a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (dollars in thousands):

	March 31, 2021		December 31, 2020
Senior loans	$	3,009,785	$	2,698,823
Mezzanine loans	18,913		15,911
Total gross carrying value of loans	3,028,698		2,714,734
Less: Allowance for credit losses (1)	18,600		20,886
Total commercial mortgage loans, held for investment, net	$	3,010,098	$	2,693,848

________________________

(1) As of March 31, 2021 and December 31, 2020, there have been no specific reserves for loans in non-performing status.

As of March 31, 2021 and December 31, 2020, the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 146 and 130 loans, respectively.

Allowance for Credit Losses

The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of March 31, 2021 (dollars in thousands):

	Three Months Ended March 31, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	3,095	$	404	$	1,575	$	3,795	$	132	$	11,646	$	117	$	122	$	20,886
Current Period:
Provision/(benefit) for credit losses	2,078		(2)		(374)		(3,187)		253		(773)		23		(15)		(1,997)
Write offs	(289)		—		—		—		—		—		—		—		(289)
Ending Balance	$	4,884	$	402	$	1,201	$	608	$	385	$	10,873	$	140	$	107	$	18,600

The Company recorded a decrease in its provision for credit losses during the three months ended March 31, 2021 of $2.0 million. The primary driver for the improvement in the reserve balance is the positive economic outlook since the end of the prior year.

The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of March 31, 2021 (dollars in thousands):

	Three Months Ended March 31, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	85	$	—	$	47	$	418	$	14	$	101	$	—	$	—	$	665
Current Period:
Provision/(benefit) for credit losses	68		—		(9)		(317)		(2)		(74)		—		—		(334)
Ending Balance	$	153	$	—	$	38	$	101	$	12	$	27	$	—	$	—	$	331

    

17

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):

	March 31, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	1,515,787	49.9	%	$	1,202,694	44.2	%
Office	547,100		18.0	%	517,464		19.0	%
Hospitality	426,040		14.0	%	403,908		14.8	%
Industrial	200,427		6.6	%	243,404		8.9	%
Mixed Use	94,280		3.1	%	102,756		3.8	%
Self-Storage	86,423		2.8	%	86,424		3.2	%
Retail	78,550		2.6	%	78,550		2.9	%
Manufactured Housing	72,539		2.5	%	71,263		2.6	%
Land	16,400		0.5	%	16,400		0.6	%
Total	$	3,037,546	100.0	%	$	2,722,863	100.0	%

	March 31, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Southwest	$	810,556	26.7	%	$	515,392	18.9	%
Southeast	811,205		26.7	%	796,908		29.3	%
Mideast	484,199		15.9	%	473,514		17.4	%
Far West	422,785		13.9	%	415,173		15.2	%
Great Lakes	186,423		6.1	%	199,203		7.3	%
Various	104,200		3.4	%	136,855		5.0	%
Plains	100,261		3.3	%	116,143		4.3	%
New England	69,166		2.4	%	69,675		2.6	%
Rocky Mountain	48,751		1.6	%	—		—	%
Total	$	3,037,546	100.0	%	$	2,722,863	100.0	%

As of March 31, 2021 and December 31, 2020, the Company's total commercial mortgage loans, held for sale, measured at fair value were comprised of ten and three loans, respectively. As of March 31, 2021 and December 31, 2020, the contractual principal outstanding of commercial mortgage loans, held for sale, measured at fair value was $92.6 million and $67.6 million, respectively. As of March 31, 2021 and December 31, 2020, none of the Company's commercial mortgage loans, held for sale, measured at fair value were in default or greater than ninety days past due.

18

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):

	March 31, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Office	$	30,500	32.9	%	$	—	—	%
Mixed Use	18,598		20.1	%	—		—	%
Multifamily	18,100		19.5	%	100		0.1	%
Retail	13,970		15.1	%	—		—	%
Industrial	9,024		9.7	%	67,550		99.9	%
Manufactured Housing	2,446		2.7	%	—		—	%
Hospitality	—		—	%	—		—	%
Total	$	92,638	100.0	%	$	67,650	100.0	%

	March 31, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Southeast	$	39,256	42.4	%	$	—	—	%
Far West	18,000		19.4	%	58,500		86.5	%
Mideast	15,973		17.2	%	—		—	%
Great Lakes	11,749		12.7	%	9,150		13.5	%
Various	7,660		8.3	%	—		—	%
Total	$	92,638	100.0	%	$	67,650	100.0	%

Loan Credit Quality and Vintage

The following tables present the amortized cost of our commercial mortgage loans, held for investment as of March 31, 2021 and March 31, 2020, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of March 31, 2021.

As of March 31, 2021
	2021		2020		2019		2018		2017		2016		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	420,073	$	585,941	$	291,648	$	174,105	$	—	$	—	$	3,488	$	1,475,255
3-4 internal grade	—		—		—		36,115		—		—		—		36,115
Total Multifamily Loans	$	420,073	$	585,941	$	291,648	$	210,220	$	—	$	—	$	3,488	$	1,511,370
Retail:
Risk Rating:
1-2 internal grade	$	—	$	13,299	$	22,751	$	16,400	$	—	$	—	$	—	$	52,450
3-4 internal grade	—		—		12,876		29,432		—		—		—		42,308
Total Retail Loans	$	—	$	13,299	$	35,627	$	45,832	$	—	$	—	$	—	$	94,758
Office:
Risk Rating:
1-2 internal grade	$	48,466	$	248,628	$	160,784	$	60,375	$	26,724	$	—	$	—	$	544,977
3-4 internal grade	—		—		—		—		—		—		—		—
Total Office Loans	$	48,466	$	248,628	$	160,784	$	60,375	$	26,724	$	—	$	—	$	544,977

19

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Industrial:
Risk Rating:
1-2 internal grade	$	—	$	123,139	$	76,490	$	—	$	—	$	—	$	—	$	199,629
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	—	$	123,139	$	76,490	$	—	$	—	$	—	$	—	$	199,629
Mixed Use:
Risk Rating:
1-2 internal grade	$	—	$	30,265	$	—	$	63,815	$	—	$	—	$	—	$	94,080
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	—	$	30,265	$	—	$	63,815	$	—	$	—	$	—	$	94,080
Hospitality:
Risk Rating:
1-2 internal grade	$	22,887	$	26,889	$	10,552	$	—	$	—	$	—	$	—	$	60,328
3-4 internal grade	—		—		160,965		113,423		90,655		—		—		365,043
Total Hospitality Loans	$	22,887	$	26,889	$	171,517	$	113,423	$	90,655	$	—	$	—	$	425,371
Self-Storage:
Risk Rating:
1-2 internal grade	$	—	$	41,324	$	—	$	44,921	$	—	$	—	$	—	$	86,245
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	—	$	41,324	$	—	$	44,921	$	—	$	—	$	—	$	86,245
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	—	$	25,915	$	46,353	$	—	$	—	$	—	$	—	$	72,268
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	—	$	25,915	$	46,353	$	—	$	—	$	—	$	—	$	72,268
Total	$	491,426	$	1,095,400	$	782,419	$	538,586	$	117,379	$	—	$	3,488	$	3,028,698

As of March 31, 2020
	2020		2019		2018		2017		2016		2015		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	177,191	$	456,036	$	617,533	$	34,875	$	—	$	—	$	3,489	$	1,289,124
3-4 internal grade	—		—		65,805		37,812		—		—		—		103,617
Total Multifamily Loans	$	177,191	$	456,036	$	683,338	$	72,687	$	—	$	—	$	3,489	$	1,392,741
Retail:
Risk Rating:
1-2 internal grade	$	—	$	54,618	$	16,319	$	—	$	—	$	—	$	9,450	$	80,387
3-4 internal grade	—		3,501		43,907		—		—		—		—		47,408
Total Retail Loans	$	—	$	58,119	$	60,226	$	—	$	—	$	—	$	9,450	$	127,795

20

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Office:
Risk Rating:
1-2 internal grade	$	49,163	$	173,988	$	97,936	$	41,645	$	—	$	10,700	$	—	$	373,432
3-4 internal grade	—		—		45,259		10,506		—		—		—		55,765
Total Office Loans	$	49,163	$	173,988	$	143,195	$	52,151	$	—	$	10,700	$	—	$	429,197
Industrial:
Risk Rating:
1-2 internal grade	$	25,241	$	84,576	$	—	$	—	$	—	$	33,655	$	—	$	143,472
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	25,241	$	84,576	$	—	$	—	$	—	$	33,655	$	—	$	143,472
Mixed Use:
Risk Rating:
1-2 internal grade	$	—	$	—	$	52,097	$	12,953	$	—	$	—	$	—	$	65,050
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	—	$	—	$	52,097	$	12,953	$	—	$	—	$	—	$	65,050
Hospitality:
Risk Rating:
1-2 internal grade	$	—	$	8,735	$	20,962	$	—	$	—	$	—	$	—	$	29,697
3-4 internal grade	—		161,948		114,190		90,940		—		—		—		367,078
Total Hospitality Loans	$	—	$	170,683	$	135,152	$	90,940	$	—	$	—	$	—	$	396,775
Self-Storage:
Risk Rating:
1-2 internal grade	$	—	$	—	$	62,937	$	—	$	—	$	—	$	—	$	62,937
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	—	$	—	$	62,937	$	—	$	—	$	—	$	—	$	62,937
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	—	$	44,714	$	—	$	—	$	—	$	—	$	—	$	44,714
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	—	$	44,714	$	—	$	—	$	—	$	—	$	—	$	44,714
Total	$	251,595	$	988,116	$	1,136,945	$	228,731	$	—	$	44,355	$	12,939	$	2,662,681

21

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Past Due Status

The following table presents an aging summary of the loans amortized cost basis at March 31, 2021 (dollars in thousands):

	Multifamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Status:
Current	$	1,511,370	$	94,758	$	544,977	$	199,629	$	94,080	$	368,296	$	86,245	$	72,268	$	2,971,623
1-29 days past due	—		—		—		—		—		—		—		—		—
30-59 days past due	—		—		—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—		—		—
90-119 days past due	—		—		—		—		—		—		—		—		—
120+ days past due (1)	—		—		—		—		—		57,075		—		—		57,075
Total	$	1,511,370	$	94,758	$	544,977	$	199,629	$	94,080	$	425,371	$	86,245	$	72,268	$	3,028,698

________________________

(1) For the three months ended March 31, 2021, there was no interest income recognized on this loan.

As of March 31, 2021 and December 31, 2020, the Company had one loan with a total cost basis of $57.1 million and two loans with a total cost basis of $94.9 million, respectively, on non-accrual status for which there was no related allowance for credit losses.

Credit Characteristics

As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

Investment Rating	Summary Description
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

All commercial mortgage loans, excluding loans classified as commercial mortgage loans, held for sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2.0. As of March 31, 2021 and December 31, 2020, the weighted average risk rating of the loans was 2.2.

The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment (dollars in thousands):

March 31, 2021				December 31, 2020
Risk Rating	Number of Loans	Par Value		Risk Rating	Number of Loans	Par Value
1	—	$	—	1	—	$	—
2	122	2,593,571		2	104	2,232,045
3	22	383,400		3	22	384,040
4	2	60,575		4	4	106,778
5	—	—		5	—	—
	146	$	3,037,546		130	$	2,722,863

22

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

For the three months ended March 31, 2021 and year ended December 31, 2020, the activity in the Company's commercial mortgage loans, held for investment portfolio was as follows (dollars in thousands):

	Three Months Ended March 31,		Year Ended December 31,
	2021		2020
Balance at Beginning of Year	$	2,693,848	$	2,762,042
Cumulative-effect adjustment upon adoption of ASU 2016-13	—		(7,211)
Acquisitions and originations	522,735		1,287,720
Principal repayments	(170,529)		(1,223,490)
Discount accretion/premium amortization	1,167		6,146
Loans transferred from/(to) commercial real estate loans, held for sale	—		(76,979)
Net fees capitalized into carrying value of loans	(1,886)		(6,562)
(Provision)/benefit for credit losses	1,997		(13,181)
Charge-off from allowance	289		427
Transfer to real estate owned	(37,523)		(35,064)
Balance at End of Period	$	3,010,098	$	2,693,848

During the three months ended March 31, 2021, the Company wrote off a commercial mortgage loan, held for investment, with a carrying value of $37.8 million in exchange for the possession of a REO investment at a fair value of $37.5 million, comprised of $33.0 million of real property (land, building and improvements) and $4.5 million of personal property (furniture, fixture, and equipment) at the time of transfer. The transfer occurred when the Company took possession of the property by completing a foreclosure transaction in January 2021, resulting in a $0.3 million impairment loss at the time of transfer. Since the foreclosure was entered into due to the borrower experiencing financial difficulty and the recorded investment in the receivable was more than the fair value of the collateral collected, the transaction qualifies as a TDR. The Company accounted for the REO acquired during the three months ended March 31, 2021 as an asset acquisition and is designated as held for sale within the Company's consolidated balance sheets.

Note 4 - Real Estate Securities

The following is a summary of the Company's real estate securities, CMBS (dollars in thousands):

March 31, 2021
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	2.4%	2/15/2036	$19,000	$18,865
December 31, 2020
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	3.0%	5/15/2022	$13,250	$12,657
CMBS 2	2.2%	6/26/2025	10,800	10,335
CMBS 3	2.5%	2/15/2036	40,000	38,292
CMBS 4	1.9%	6/15/2037	8,000	7,892
CMBS 5	2.1%	9/15/2037	24,000	23,297
CMBS 6	2.3%	6/15/2034	12,000	11,580
CMBS 7	1.5%	12/15/2036	20,000	18,975
CMBS 8	1.8%	12/15/2036	25,000	23,268
CMBS 9	2.3%	3/15/2035	25,665	24,840

23

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The Company classified its CMBS investments as available for sale as of March 31, 2021 and December 31, 2020. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in accumulated other comprehensive income/(loss). The weighted average contractual maturity for CLO investments included within the CMBS portfolio as of March 31, 2021 and December 31, 2020 was 15 and 14 years. The weighted average contractual maturity for single asset single borrower "SASB" investments as of March 31, 2021 and December 31, 2020 was none and 14 years.

The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CMBS investments by investment type (dollars in thousands):

	Amortized Cost		Credit Loss Allowance		Unrealized Gain		Unrealized Loss		Fair Value
March 31, 2021
CLOs	$	19,079	$	—	$	—	$	(214)	$	18,865
SASB	—		—		—		—		—
Total	$	19,079	$	—	$	—	$	(214)	$	18,865
December 31, 2020
CLOs	$	123,444	$	—	$	—	$	(4,888)	$	118,556
SASB	55,948		—		—		(3,368)		52,580
Total	$	179,392	$	—	$	—	$	(8,256)	$	171,136

As of March 31, 2021 the Company held 1 CMBS position with an amortized cost basis of $19.1 million and an unrealized loss of $0.2 million, which unrealized loss was for a period greater than twelve months. As of December 31, 2020, the Company held 9 CMBS positions with an amortized cost basis of $179.4 million and an unrealized loss of $8.3 million, of which 7 positions had an unrealized loss for a period greater than twelve months.

The following table provides information on the unrealized losses and fair value on the Company's real estate securities, CMBS, available for sale that were in an unrealized loss position, and for which an allowance for credit losses has not been recorded as of March 31, 2021 and December 31, 2020 (amounts in thousands):

	Fair Value				Unrealized Loss
	Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months		Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months
March 31, 2021
CLOs	$	—	$	18,865	$	—	$	(214)
SASB	—		—		—		—
Total	$	—	$	18,865	$	—	$	(214)
December 31, 2020
CLOs	$	63,131	$	55,425	$	(2,824)	$	(2,065)
SASB	—		52,580		—		(3,367)
Total	$	63,131	$	108,005	$	(2,824)	$	(5,432)

As of March 31, 2021 and December 31, 2020, there were 1 and 7 securities, respectively with unrealized losses for a period greater than twelve months reflected in the table above. After evaluating the securities, the Company concluded that the unrealized losses reflected above were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered a number of factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that we would be forced to sell the securities prior to recovering our amortized cost, the portfolio is made up of investment grade securities of recent originations and higher tranches, and that there were no material credit events that would have caused us to otherwise conclude that the Company would not recover our cost. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the original cash flows expected to be collected to the revised cash flows expected to be collected discounted using the effective interest rate, limited by the amount that the fair value is less than the amortized cost basis. Significant judgment is used in projecting cash flows. As a result, actual income and/or credit losses could be materially different from what is currently projected and/or reported.

24

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following table provides information on the amounts of gain/(loss) on the Company's real estate securities, CMBS, available for sale (dollars in thousands):

	Three Months Ended March 31,
	2021		2020
Unrealized gain/(loss) on available for sale securities	$	1,665	$	(67,607)
Reclassification of net (gain)/loss on available for sale securities included in net income/(loss)	6,377		—
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	$	8,042	$	(67,607)

The amounts reclassified for net (gain)/loss on available for sale securities are included in the realized (gain)/loss on sale of real estate securities in the Company's consolidated statements of operations. The Company's unrealized gain/(loss) on available for sale securities is net of tax. Due to the Company's designation as a REIT, there was no tax impact on unrealized gain/(loss) on available for sale securities.

Note 5 - Real Estate Owned

The following table summarizes the Company's real estate owned assets as of March 31, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, IN	$	1,887	$	21,989	$	3,565	$	(1,131)	$	26,310
January 2021 (2)	Multifamily	Kansas City, MO	4,300		28,697		4,526		—		37,523
			$	6,187	$	50,686	$	8,091	$	(1,131)	$	63,833

________________________

(1) Refer to Note 2 for the useful life of the above assets.

(2) Represents assets acquired by the Company by completing a foreclosure transaction and is designated as held for sale within the Company's consolidated balance sheets.

The following table summarizes the Company's real estate owned assets as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, IN	$	1,887	$	21,989	$	3,565	$	(931)	$	26,510
			$	1,887	$	21,989	$	3,565	$	(931)	$	26,510

________________________

(1) Refer to Note 2 for the useful life of the above assets.

Depreciation expense for the three months ended March 31, 2021 and 2020 totaled $0.2 million and $0.3 million, respectively.

Long-Lived Asset Classified as Held for Sale

As of March 31, 2021, the Company has designated one property included within the real estate owned business segment as held for sale. The property is located in Kansas City, MO and is currently being marketed and sale is probable to occur within one year.

25

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 6 - Leases

Intangible Lease Asset

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of March 31, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(1,169)	$	13,340
			$	14,509	$	(1,169)	$	13,340

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(963)	$	13,546
			$	14,509	$	(963)	$	13,546

Rental Income

On October 15, 2019, the Company purchased an office building that was subject to an existing triple net lease. The minimum rental amount due under the lease is subject to annual increases of 1.5%. The initial term of the lease expires in 2037 and contains renewal options for four consecutive five-year terms. The remaining lease term is 16.1 years. Rental income for this operating lease for each of the three months ended March 31, 2021 and March 31, 2020 totaled $0.7 million and is included in Revenue from real estate owned in the consolidated statements of operations.

The following table summarizes the Company's schedule of future minimum rents to be received under the lease (dollars in thousands):

Minimum Rents	March 31, 2021
2021 (April - December)	$	1,932
2022	2,607
2023	2,646
2024	2,686
2025	2,726
2026 and beyond	34,168
Total minimum rent	$	46,765

Amortization Expense

Intangible lease assets are amortized using the straight-line method over the contractual life of the lease, of a period up to 20 years. The weighted average life of intangible assets as of March 31, 2021 is approximately 16.1 years. Amortization expense for the three months ended March 31, 2021 and 2020 totaled $0.2 million.

The following table summarizes the Company's expected amortization for intangible assets over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):

Amortization Expense	March 31, 2021
2021 (April - December)	$	(619)
2022	(825)
2023	(825)
2024	(825)
2025	(825)

26

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 7 - Debt

Repurchase Agreements - Commercial Mortgage Loans

The Company has entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").

The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.

The details of the Company's Repo Facilities at March 31, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of March 31, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	300,000	$	111,108	$	989	2.41	%	10/6/2022
USB Repo Facility	100,000		—		93		N/A		6/15/2021
CS Repo Facility	200,000		10,000		980		4.50	%	8/19/2021
WF Repo Facility (2)	175,000		—		504		N/A		11/21/2021
Barclays Revolver Facility (3)	100,000		—		34		N/A		9/20/2021
Barclays Repo Facility (4)	300,000		31,817		486		1.96	%	3/15/2022
Total	$	1,175,000	$	152,925	$	3,086

________________________

(1) For the three months ended March 31, 2021. Includes amortization of deferred financing costs.

(2) There are two more one-year extension options available at the Company's discretion.

(3) There is one one-year extension option available at the Company's discretion.

(4) Includes one one-year extensions at the Company's option.

27

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

The Company expects to use the advances from the Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. As of March 31, 2021 and December 31, 2020, the Company is in compliance with all debt covenants.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. Since inception, the Company's outstanding loan increased as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company incurred $0.2 million of interest expense on the SNB term loan for three months ended March 31, 2021. As of March 31, 2021 the outstanding participation balance was $34.0 million. The loan matures on February 9, 2023.

Mortgage Note Payable

On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of March 31, 2021 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $0.3 million of interest expense for the three months ended March 31, 2021.

Unsecured Debt

Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million of interest expense on the lending agreement with SBL for the three months ended March 31, 2021. As of March 31, 2021, there was an outstanding balance of $100.0 million.

28

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs as of March 31, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of March 31, 2021
JP Morgan Securities LLC	$	16,609	$	89	$	23,430	1.73	%	7
Wells Fargo Securities, LLC	—		—		—		N/A		N/A
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	71,663		246		91,060		1.35	%	45
Credit Suisse AG	—		—		—		N/A		N/A
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	88,272	$	453	$	114,490	1.43	%	37
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	1.71	%	33

________________________

(1) Includes $95.6 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively.

Collateralized Loan Obligations

As of March 31, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 26 and 27 mortgage assets having a principal balance of $406.4 million and $417.9 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.

As of March 31, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 57 and 59 mortgage assets having a principal balance of $827.9 million and $852.1 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 12, 2018, between the Company and BSPRT 2018-FL4 Issuer.

As of March 31, 2021 and December 31, 2020, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 59 and 54 mortgage assets having a principal balance of $788.9 million and $799.8 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.

29

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

On March 25, 2021, BSPRT 2021-FL6 Issuer, Ltd. (the “Issuer”) and BSPRT 2021-FL6 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S. Bank National Association, as note administrator and trustee, which governs the issuance of approximately $645.8 million principal balance secured floating rate notes (the “Notes”), of which $573.1 million were purchased by third party investors and $72.6 million were purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 54,250 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.

As of March 31, 2021, the notes issued by BSPRT 2021-FL6 Issuer, Ltd. and BSPRT 2021-FL6 Co-Issuer, LLC, are collateralized by interests in a pool of 40 mortgage assets having a principal balance of $506.9 million (the "2021-FL6 Mortgage Assets"). The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd. is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.

The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of the above CLOs of approximately $311.2 million and $256.9 million as of March 31, 2021 and December 31, 2020, respectively. The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer, 2019-FL5 Issuer and 2021-FL6 Issuer (the "CLOs), respectively, as of March 31, 2021 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	83,069	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		77,775		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		375,911		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		407,025		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,372		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
2021-FL6 Issuer	Tranche A	367,500		367,500		1M LIBOR + 110	3/15/2036
2021-FL6 Issuer	Tranche A-S	86,625		86,625		1M LIBOR + 130	3/15/2036
2021-FL6 Issuer	Tranche B	33,250		33,250		1M LIBOR + 160	3/15/2036
2021-FL6 Issuer	Tranche C	41,125		41,125		1M LIBOR + 205	3/15/2036
2021-FL6 Issuer	Tranche D	44,625		44,625		1M LIBOR + 300	3/15/2036
2021-FL6 Issuer	Tranche E	11,375		—		1M LIBOR + 350	3/15/2036
		$	2,409,701	$	2,092,927

________________________

(1) Excludes $339.7 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line in the consolidated balance sheets as of March 31, 2021.

30

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer and 2019-FL5 Issuer, as of December 31, 2020 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	161,745	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		77,775		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		416,659		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		407,025		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,373		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
		$	1,825,201	$	1,639,227

________________________

(1) Excludes $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line in the consolidated balance sheets as of December 31, 2020.

31

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The below table reflects the total assets and liabilities of the Company's outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of March 31, 2021 and December 31, 2020 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. The VIE's are non-recourse to the Company.

Assets (dollars in thousands)	March 31, 2021		December 31, 2020
Cash (1)	$	216,615	$	99,025
Commercial mortgage loans, held for investment, net (2)	2,505,938		2,044,956
Accrued interest receivable	6,700		5,626
Total Assets	$	2,729,253	$	2,149,607
Liabilities
Notes payable (3)(4)	$	2,415,354	$	1,892,616
Accrued interest payable	1,266		1,240
Total Liabilities	$	2,416,620	$	1,893,856

________________________

(1) Includes $216.0 million and $98.6 million of cash held by the servicer related to CLO loan payoffs as of March 31, 2021 and December 31, 2020, respectively.

(2) The balance is presented net of allowance for credit losses of $16.5 million and $19.4 million as of March 31, 2021 and December 31, 2020, respectively.

(3) Includes $339.7 million and $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively.

(4) The balance is presented net of deferred financing cost and discount of $17.3 million and $13.7 million as of March 31, 2021 and December 31, 2020, respectively.

Note 8 - Earnings Per Share

The Company uses the two-class method in calculating basic and diluted earnings per share. Net income/(loss) is allocated between our common stock and other participating securities based on their participation rights. Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities. The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the three months ended March 31, 2021 and March 31, 2020 (in thousands, except share and per share data):

	Three months ended March 31,
Numerator	2021		2020
Net income/(loss)	$	30,146	$	(7,400)
Less: Preferred stock dividends	3,511		4,515
Less: Undistributed earnings allocated to preferred stock	3,227		—
Net income/(loss) attributable to common stockholders (for basic and diluted earnings per share)	23,408		(11,915)
Denominator
Weighted-average common shares outstanding for basic earnings per share	44,290,177		44,263,334
Effect of dilutive shares:
Unvested restricted shares	15,888		11,518
Weighted-average common shares outstanding for diluted earnings per share	44,306,065		44,274,852
Basic earnings per share	$	0.53	$	(0.27)
Diluted earnings per share	$	0.53	$	(0.27)

32

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 9 - Stock Transactions

As of March 31, 2021 and December 31, 2020, the Company had 44,135,659 and 44,510,051 shares of common stock outstanding, respectively, including shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP"), share repurchases and unvested restricted shares.

As of March 31, 2021 and December 31, 2020, the Company had 25,566 and 40,515 shares of Series A Preferred Stock outstanding, respectively and 1,400 shares of Series C Preferred Stock outstanding. Additionally, as of March 31, 2021 the Company had 17,950 shares of Series D Preferred Stock outstanding.

On March 15, 2021, the Company and SBL entered into an agreement pursuant to which SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (with the proceeds reduced by the accrued and unpaid dividends on the exchanged Series A Preferred Stock). The transaction settled on March 18, 2021.

The following tables present the activity in the Company's Series A Preferred Stock for the three months ended March 31, 2021 and March 31, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	1	2
Offering Costs	—	13
Amortization of offering costs	—	22
Ending Balance, March 31, 2021	25,566	$	127,581
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	—	2
Offering Costs	—	(5)
Amortization of offering costs	—	24
Ending Balance, March 31, 2020	40,514	$	202,235

The following tables present the activity in the Company's Series C Preferred Stock for the three months ended March 31, 2021 and March 31, 2020 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering Costs	—	—
Amortization of offering costs	—	2
Ending Balance, March 31, 2021	1,400	$	6,964

	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(5)
Amortization of offering costs	—	1
Ending Balance, March 31, 2020	1,400	$	6,962

33

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following table presents the activity in the Company's Series D Preferred Stock for the three months ended March 31, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(26)
Amortization of offering costs	—	—
Ending Balance, March 31, 2021	17,950	$	89,722

As of March 31, 2020 the Company did not have any Series D Preferred Stock outstanding.

Distributions

In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes. Distribution payments are dependent on the availability of funds. The Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

In April 2020, the Company’s board of directors unanimously approved a transition in the timing of the dividend payments to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly payment and accrual basis. The first quarterly dividend was the second quarter 2020 dividend payable in July 2020. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.

The monthly distributions for the first quarter of 2020 were paid at a daily rate equivalent to $1.44 per annum, per share of common stock. Starting with the second quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of $0.275 per share of common stock (equivalent to $1.10 per annum). Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distribution payments are not assured. Dividends on the Company’s Preferred Stock, to the extent not declared by the board of directors quarterly, will accrue, and dividends may not be paid on the Company's common stock to the extent there are accrued and unpaid dividends on the Preferred Stock. The amount of dividends paid on the Company’s Preferred Stock are generally in an amount equal to the dividends a holder of Preferred Stock would have received if the Preferred Stock had been converted into common stock in accordance with its terms.

The Company distributed $12.2 million of common stock dividends during the three months ended March 31, 2021, comprised of $9.7 million in cash and $2.6 million in shares of common stock issued under the DRIP. The DRIP was temporarily suspended for the March 2020 dividend due to COVID-19 related valuation volatility, but was reactivated for the second quarter 2020 dividend. The Company distributed $15.8 million of common stock dividends during the three months ended March 31, 2020, comprised of $12.2 million in cash and $3.6 million in shares of common stock issued under the DRIP.

As of March 31, 2021 and December 31, 2020, the Company had declared but unpaid common stock distributions of $12.1 million and $12.2 million, respectively. Additionally, as of March 31, 2021 and December 31, 2020, the Company had declared but unpaid Series A Preferred Stock distributions of $2.1 million and $3.3 million, respectively and $0.1 million and $0.1 million of Series C Preferred stock, respectively. Additionally, as of March 31, 2021 the Company had declared but unpaid common stock distributions of $0.2 million of Series D Preferred Stock. These amounts are included in Distributions payable on the Company’s consolidated balance sheets.

Share Repurchase Program

The Company's board of directors unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.

34

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The repurchase price per share for SRP repurchases is equal to the lesser of (i) the Company’s most recent estimated per-share NAV, as approved by the Company’s board of directors from time to time, and (ii) the Company’s book value per share, computed in accordance with GAAP, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years or in the case of requests for death or disability. The Company’s estimated per-share NAV as of March 31, 2021, as determined by the board of directors, is $17.88. The Company’s GAAP book value per share as of March 31, 2021 is $18.45.

Repurchase requests related to death or a qualifying disability must satisfy certain conditions, each of which are assessed by and at the sole discretion of the Company, including the following conditions. In the case of death, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the estate of the shareholder, the recipient of the shares through bequest or inheritance, or the trustee in the case of a revocable grantor trust. In the case of a “qualifying disability”, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the shareholder, or the trustee in the case of a revocable grantor trust, that the condition was not pre-existing on the date the shares were acquired. In order for a disability to be considered a “qualifying disability”, the shareholder must receive and provide evidence (the shareholder application and the notice of final determination) of disability based upon a physical or mental condition or impairment made by a government agency responsible for reviewing and determining disability retirement benefits (e.g. the Social Security Administration).

Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Company's board of directors has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Any repurchase requests received during such fiscal semester will be paid at the price, computed as described above on the last day of such fiscal semester. Due to these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that the Company honors the request when funds are available. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.

The following table reflects the number of shares repurchased under the SRP cumulatively through March 31, 2021:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,351	521,796	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
Cumulative as of March 31, 2021	9,445	4,643,531	$	19.62

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 shares which for administrative reasons were processed in March 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,885,340 shares were not fulfilled for the second semester of 2020.

35

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 10 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of March 31, 2021 and December 31, 2020, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

Funding Expiration	March 31, 2021		December 31, 2020
2021	$	45,331	$	59,692
2022	83,246		91,420
2023	70,951		69,880
2024	54,770		7,700
2025 and beyond	15,355		—
	$	269,653	$	228,692

The borrowers are required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.

Litigation and Regulatory Matters

The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.

Note 11 - Related Party Transactions and Arrangements

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company is required to make the following payments and reimbursements to the Advisor:

•The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers.

•The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' equity as calculated pursuant to the Advisory Agreement.

•The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, our Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to our Advisor exceed 10.0% of the aggregate total return for such year.

•The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company‘s behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments.

36

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three months ended March 31, 2021 and 2020 and the associated payable as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	Three Months Ended March 31,				Payable as of
	2021		2020		March 31, 2021		December 31, 2020
Acquisition expenses (1)	$	153	$	142	$	—	$	—
Administrative services expenses	3,474		4,112		3,474		2,940
Asset management and subordinated performance fee	5,416		3,912		6,411		4,773
Other related party expenses (2)(3)	29		582		592		1,812
Total related party fees and reimbursements	$	9,072	$	8,748	$	10,477	$	9,525

________________________

(1) Total acquisition expenses paid during the three months ended March 31, 2021 and 2020 were $2.6 million and $2.1 million respectively, of which $2.4 million and $2.0 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, at fair value lines of the consolidated balance sheets for the periods ended March 31, 2021 and 2020.

(2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.

(3) As of March 31, 2021 and December 31, 2020 the related party payables include $0.6 million and $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.

The payables as of March 31, 2021 and December 31, 2020 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.

Other Transactions

Pursuant to a lending and security agreement with SBL, which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million interest expense on the lending agreement with SBL for the three months ended March 31, 2021. As of March 31, 2021 there was $100.0 million outstanding under the lending agreement.

SBL also holds 17,950 shares of the Company's outstanding shares of Series D Preferred Stock of which, 14,950 shares were acquired in exchange for an equivalent number of shares of Series A Preferred Stock in March 2021. SBL also acquired an additional 3,000 shares of Series D Preferred Stock at the liquidation preference of $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock) in such transaction.

Note 12 - Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

•Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

•Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

•Level III - Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

37

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

Financial Instruments Measured at Fair Value on a Recurring Basis

CMBS, recorded in real estate securities, available for sale, measured at fair value on the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of March 31, 2021 and December 31, 2020, the Company obtained third party pricing for determining the fair value of each CMBS investment, resulting in a Level II classification.

Commercial mortgage loans, held for sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans, held for sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction proceeds. The Company classified the commercial mortgage loans, held for sale, measured at fair value as Level III.

Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the other real estate investments, measured at fair value as Level III.

The fair value for Treasury note futures is derived using market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The instruments are a variety of recently issued 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy.

The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets or liabilities. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were no material transfers between levels within the fair value hierarchy for the period ended March 31, 2021 and December 31, 2020.

38

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	Total		Level I		Level II		Level III
March 31, 2021
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	18,865	$	—	$	18,865	$	—
Commercial mortgage loans, held for sale, measured at fair value	93,117		—		—		93,117
Other real estate investments, measured at fair value	2,528		—		—		2,528
Interest rate swaps	889		—		889		—
Treasury note futures	974		974		—		—
Total assets, at fair value	$	116,373	$	974	$	19,754	$	95,645
Liabilities, at fair value
Credit default swaps	$	1,105	$	—	$	1,105	$	—
Total liabilities, at fair value	$	1,105	$	—	$	1,105	$	—
December 31, 2020
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	171,136	$	—	$	171,136	$	—
Commercial mortgage loans, held for sale, measured at fair value	67,649		—		—		67,649
Other real estate investments, measured at fair value	2,522		—		—		2,522
Interest rate swaps	25		—		25		—
Total assets, at fair value	$	241,332	$	—	$	171,161	$	70,171
Liabilities, at fair value
Credit default swaps	$	297	$	—	$	297	$	—
Treasury note futures	106		106		—		—
Total liabilities, at fair value	$	403	$	106	$	297	$	—

39

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of March 31, 2021 and December 31, 2020 (dollars in thousands):

Asset Category	Fair Value		Valuation Methodologies	Unobservable Inputs (1)	Weighted Average (2)	Range
March 31, 2021
Commercial mortgage loans, held for sale, measured at fair value	$	93,117	Discounted Cash Flow	Yield	3.8%	3.2% - 17.6%
Other real estate investments, measured at fair value	2,528		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%
December 31, 2020
Commercial mortgage loans, held for sale, measured at fair value	$	67,649	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,522		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%

________________________

(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.

(2) Inputs were weighted based on the fair value of the investments included in the range.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

40

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 for which the Company has used Level III inputs to determine fair value (dollars in thousands):

	March 31, 2021
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2021	$	67,649	$	2,522
Transfers into Level III (2)	—		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held for sale	6,630		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	479		6
Net accretion	—		—
Purchases	166,360		—
Sales / paydowns	(148,001)		—
Transfers out of Level III (2)	—		—
Ending Balance, March 31, 2021	$	93,117	$	2,528
	December 31, 2020
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2020	$	112,562	$	2,557
Transfers into Level III (2)	23,625		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held for sale	15,931		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	(75)		(32)
Net accretion	—		(3)
Purchases(1)	267,552		—
Sales / paydowns (1)	(328,321)		—
Transfers out of Level III (2)	(23,625)		—
Ending Balance, December 31, 2020	$	67,649	$	2,522

(1) Excluded from Purchases and Sales/paydowns are $679.1 million and $682.0 million, respectively, of loans that collateralize a CMBS investment required to be consolidated in connection with the Company's retention of the B tranche during the year ended December 31, 2020. Upon disposition of the B tranche during the year ended December 31, 2020, the Company recognized a gain of $2.8 million that is recorded in Realized gain/loss on sale of real estate securities on the consolidated statements of operations.

(2) Transfers in and transfers out include transfers between Commercial mortgage loans, held-for-sale and Commercial mortgage loans, held for investment.

41

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs.

Financial Instruments Not Measured at Fair Value

The fair values of the Company's commercial mortgage loans, held for investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of March 31, 2021 and December 31, 2020 (dollars in thousands):

		Level	Carrying Amount (1)		Fair Value
March 31, 2021
Commercial mortgage loans, held for investment (1)	Asset	III	$	3,028,698	$	3,050,417
Collateralized loan obligations	Liability	III	2,075,611		2,090,873
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	34,017		34,017
December 31, 2020
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,714,734	$	2,724,039
Collateralized loan obligation	Liability	III	1,625,498		1,606,478
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	31,379		31,379

________________________

(1) The carrying value is gross of $18.6 million and $20.9 million of allowance for credit losses as of March 31, 2021 and December 31, 2020, respectively.

The fair value of the commercial mortgage loans, held for investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. The fair value of the other financing and loan participation-commercial mortgage loans is generally estimated using a discounted cash flow analysis. At March 31, 2021, the Mortgage note payable was initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.

42

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 13 - Derivative Instruments

The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.

As of March 31, 2021, the net premiums received on derivative instrument assets were $3.0 million.

The following derivative instruments were outstanding as of March 31, 2021 and December 31, 2020 (dollars in thousands):

			Fair Value
Contract type	Notional		Assets		Liabilities
March 31, 2021
Credit default swaps	$	92,000	$	—	$	1,105
Interest rate swaps	40,453		889		—
Treasury note futures	53,000		974		—
Total	$	185,453	$	1,863	$	1,105
December 31, 2020
Credit default swaps	$	46,000	$	—	$	297
Interest rate swaps	32,517		25		—
Treasury note futures	43,500		—		106
Total	$	122,017	$	25	$	403

The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31, 2021
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(163)	$	455
Interest rate swaps	(865)		(921)
Treasury note futures	(1,081)		(1,512)
Total	$	(2,109)	$	(1,978)
	Three Months Ended March 31, 2020
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(1,752)	$	61
Interest rate swaps	4,340		2,946
Treasury note futures	2,248		3,627
Options	—		35
Total	$	4,836	$	6,669

43

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 14 - Offsetting Assets and Liabilities

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of March 31, 2021 and December 31, 2020 (dollars in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Amount of Assets Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
March 31, 2021
Derivative instruments, at fair value	$	1,863	$	—	$	1,863		$	—	$	—	$	1,863
December 31, 2020
Derivative instruments, at fair value	$	25	$	—	$	25		$	—	$	—	$	25

							Gross Amounts Not Offset on the Balance Sheet
Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
March 31, 2021
Repurchase agreements - commercial mortgage loans	$	152,925	$	—	$	152,925		$	315,991	$	5,016	$	—
Repurchase agreements - real estate securities	88,272		—		88,272			114,490		—		—
Derivative instruments, at fair value	1,105		—		1,105			—		6,058		—
December 31, 2020
Repurchase agreements - commercial mortgage loans	$	276,340	$	—	$	276,340		$	496,030	$	5,016	$	—
Repurchase agreements - real estate securities	186,828		—		186,828			245,956		1,146		—
Derivative instruments, at fair value	403		—		403			—		3,435		—

________________________

(1) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets.

44

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 15 - Segment Reporting

The Company conducts its business through the following reporting segments:

•The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

•The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

•The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

The following table represents the Company's operations by segment for the three months ended March 31, 2021 and March 31, 2020 (dollars in thousands):

Three months ended March 31, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	42,237	$	40,757	$	424	$	1,056	$	—
Revenue from real estate owned	716		—		—		—		716
Interest expense	11,369		10,574		182		332		281
Net income/(loss)	30,146		23,033		(454)		7,538		29
Total assets as of March 31, 2021	3,552,693		3,346,477		19,259		106,782		80,175
Three Months Ended March 31, 2020
Interest income	$	47,854	$	43,369	$	3,295	$	1,190	$	—
Revenue from real estate owned	1,629		—		—		—		1,629
Interest expense	24,492		21,708		1,807		693		284
Net income/(loss)	(7,400)		(1,183)		1,050		(5,982)		(1,285)
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519

For the purposes of the table above, any expenses not associated with a specific segment have been allocated to the business segments using a percentage derived by using the sum of commercial mortgage loans originated during the year as the denominator and commercial mortgage loans, held for investment, net of allowance and commercial mortgage loans, held for sale, measured at fair value as numerator.

Note 16 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q.

45

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Benefit Street Partners Realty Trust, Inc. the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 10, 2021.

As used herein, the terms "we," "our" and "us" refer to Benefit Street Partners Realty Trust, Inc., a Maryland corporation, and, as required by context, to Benefit Street Partners Realty Operating Partnership, L.P., a Delaware limited partnership, which we refer to as the "OP," and to its subsidiaries. We are externally managed by Benefit Street Partners L.L.C. (our "Advisor").

The forward-looking statements contained in this Quarterly Report on Form 10-Q may include, but are not limited to, statements as to:

•our business and investment strategy;

•our ability to make investments in a timely manner or on acceptable terms;

•the impact of the COVID-19 pandemic;

•current credit market conditions and our ability to obtain long-term financing for our investments in a timely manner and on terms that are consistent with what we project when we invest;

•the effect of general market, real estate market, economic and political conditions, including the recent economic slowdown and dislocation in the global credit markets;

•our ability to make scheduled payments on our debt obligations;

•our ability to generate sufficient cash flows to make distributions to our stockholders;

•our ability to generate sufficient debt and equity capital to fund additional investments;

•our ability to refinance our existing financing arrangements;

•the degree and nature of our competition;

•the availability of qualified personnel;

•we may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act;

•our ability to maintain our qualification as a real estate investment trust ("REIT"); and

•other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 and this Quarterly Report on Form 10-Q.

In addition, words such as "anticipate," "believe," "expect" and "intend" indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the continuing adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, operating results and cash flows of the Company, its borrowers, the real estate market, the global economy and the financial markets. The extent to which the COVID-19 pandemic continues to impact us and our borrowers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, including any resurgences, the speed and effectiveness of vaccine and treatment developments and the direct and indirect economic effects of the pandemic and containment measures, among others.

Our investors should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Overview

We were incorporated in Maryland on November 15, 2012 and have conducted our operations to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2013. The Company, through a subsidiary which is treated as a TRS, is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States. Commercial real estate debt investments may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Substantially all of our business is conducted through the OP, a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP.

46

The Company has no direct employees. We are managed by our Advisor pursuant to an Amended and Restated Advisory Agreement, dated January 19, 2018 (the "Advisory Agreement"). Our Advisor manages our affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of our assets and our operations.

The Advisor, an SEC-registered investment adviser, is a credit-focused alternative asset management firm. The Advisor manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the Advisor’s robust platform. On February 1, 2019, Franklin Resources, Inc. and Templeton International, Inc. (collectively, “Franklin Templeton”) acquired the Advisor (the “Transaction”). The Transaction did not impact the terms of the Advisory Agreement and the Transaction did not result in any changes to the executive officers of the Company.

The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions at a profit. The Company also owns real estate, which represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

The Company also invests in commercial real estate securities. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and CDOs.

Estimated Per Share NAV

On November 2, 2020, our board of directors, upon the recommendation of the Audit Committee of the board, unanimously approved and established the estimated net asset value ("NAV") per share of the Company’s common stock proposed by the Advisor of $17.88. The estimated per share NAV was based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 2020 (the “Valuation Date”). The valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013, including the use of independent third-party valuation firms to estimate the fair value of our loan portfolio, securities portfolio and real estate owned portfolio.

These valuation firms estimated the value of our loan portfolio using customary valuation methods, including a discounted cash flow analysis with respect to our loan portfolio, available market pricing information with respect to our securities portfolio, and real estate appraisals with respect to our real estate owned portfolio. Based on these methodologies these firms determined a range of estimated valuations. To estimate the Company’s NAV, the Advisor added the amounts of cash and other tangible assets reflected on our balance sheet (as computed in accordance with GAAP) and subtracted our liabilities as reflected on our balance sheet (computed in accordance with GAAP). Based on this the Advisor estimated that the Company’s NAV as of September 30, 2020 is $17.88 which is the midpoint of the valuation range of $17.14 to $18.62.

The Advisor recommended our board of directors approve the estimated per share NAV of $17.88. As with any methodology used to estimate value, the methodologies employed to estimate the NAV were based upon a number of estimates and assumptions that may not be accurate or complete. If different judgments, assumptions or opinions were used, a different estimate would likely result.

We believe that the method used to determine the estimated per share NAV of the Company’s common stock is the methodology most commonly used by public, non-listed REITs to estimate per share NAV. The estimated per share NAV does not represent the per share amount a third party would pay to acquire us, or the price at which our common stock would trade in the event we were listed on a national securities exchange. For example, the estimated per share NAV of the Company’s common stock does not reflect a liquidity discount for the fact that the shares are not currently traded on a national securities exchange and other costs that may be incurred in connection with a liquidity event. Our estimated per share NAV does not reflect the conversion of any of our Series A convertible preferred stock ("Series A Preferred Stock"), Series C convertible preferred stock (“Series C Preferred Stock”) or Series D convertible preferred stock (“Series D Preferred Stock” and with the Series A Preferred Stock and Series C Preferred Stock, the “Preferred Stock”).

The estimated per share NAV was determined at a moment in time and as of the Valuation Date and the values of our assets and liabilities will change over time as a result of changes relating to the individual loans in our portfolio as well as changes and developments in the real estate and capital markets generally, including changes in interest rates. For example, material adverse developments in the real estate or credit markets related to the COVID-19 pandemic after September 30, 2020 would have a significant impact on our estimated per share NAV. Therefore, stockholders should not rely on the estimated per share NAV in making a decision to buy or sell shares of our common stock.

47

Significant Accounting Policies and Use of Estimates

A summary of our significant accounting policies is set forth in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in this Quarterly Report on Form 10-Q. A full disclosure of our significant accounting polices is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Portfolio

As of March 31, 2021 and December 31, 2020, our portfolio consisted of 146 and 130 commercial mortgage loans, respectively, excluding commercial mortgage loans accounted for under the fair value option. The commercial mortgage loans, held for investment as of March 31, 2021 and December 31, 2020 had a total carrying value, net of allowance for credit losses, of $3,010.1 million and $2,693.8 million, respectively. As of March 31, 2021 and December 31, 2020, our total commercial mortgage loans, held for sale, measured at fair value comprised of 10 loans with total fair value of $93.1 million and 3 loans with total fair value of $67.6 million, respectively. As of March 31, 2021 and December 31, 2020, our real estate securities, available for sale, at fair value were comprised of one CMBS investment with total fair value of $18.9 million and nine CMBS investments with total fair value of $171.1 million, respectively. As of March 31, 2021 and December 31, 2020, our other real estate investments, measured at fair value, were comprised of one investment with a total fair value of $2.5 million. As of March 31, 2021, our real estate owned portfolio comprised of two investments with a carrying value of $63.8 million. As of December 31, 2020, our real estate owned portfolio was comprised of one investment with a carrying value of $26.5 million.

As of March 31, 2021, we had one loan with unpaid contractual principal balance for a total carrying value of $57.1 million that had interest past due for greater than 90 days. We did not take any asset specific reserves for this loan. As of December 31, 2020, we had two loans with unpaid contractual principal balance and carrying value of $94.9 million, one with interest past due for greater than 90 days and the other with interest past due greater than 30 days.

As of March 31, 2021 and December 31, 2020, our commercial mortgage loans, excluding commercial mortgage loans accounted for under the fair value option, had a weighted average coupon of 5.3% and 5.5%, and a weighted average remaining life of 1.7 years. As of March 31, 2021 and December 31, 2020, our CMBS investments had a weighted average coupon of 2.5% and 2.2%, and a remaining life of 15.1 years and 12.8 years, respectively.

48

The following charts summarize our commercial mortgage loans, held for investment, by coupon rate type, collateral type and geographical region as of March 31, 2021 and December 31, 2020:

49

50

An investments region classification is defined according to the below map based on the location of investments secured property.

51

The following charts show the par value by contractual maturity year for the commercial mortgage loans held for investments in our portfolio as of March 31, 2021 and December 31, 2020:

52

The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of March 31, 2021 (dollars in thousands):

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 1	Office	$5,000	1 month LIBOR + 11.80%	12.0%	60.0%
Senior Debt 2	Office	26,724	1 month LIBOR + 4.15%	5.4%	69.5%
Senior Debt 3	Hospitality	10,400	1 month LIBOR + 6.25%	6.5%	61.6%
Senior Debt 4	Hospitality	5,885	1 month LIBOR + 3.50%	4.5%	77.0%
Senior Debt 5	Hospitality	57,075	1 month LIBOR + 5.19%	6.2%	51.8%
Senior Debt 6	Multifamily	81,697	1 month LIBOR + 4.50%	5.5%	22.4%
Senior Debt 7	Hospitality	9,450	1 month LIBOR + 7.00%	7.5%	60.7%
Senior Debt 8	Hospitality	22,150	1 month LIBOR + 6.00%	6.5%	48.1%
Senior Debt 9	Office	22,985	1 month LIBOR + 5.15%	6.6%	56.4%
Senior Debt 10	Multifamily	37,987	1 month LIBOR + 3.00%	3.8%	63.7%
Senior Debt 11	Hospitality	28,272	1 month LIBOR + 4.00%	5.3%	68.0%
Senior Debt 12	Hospitality	22,700	1 month LIBOR + 4.40%	5.0%	72.7%
Senior Debt 13	Multifamily	36,115	1 month LIBOR + 3.00%	4.5%	83.6%
Senior Debt 14	Self-Storage	3,851	1 month LIBOR + 4.05%	5.0%	45.5%
Senior Debt 15	Self-Storage	6,496	1 month LIBOR + 4.05%	5.1%	55.8%
Senior Debt 16	Self-Storage	7,606	1 month LIBOR + 4.05%	5.1%	57.6%
Senior Debt 17	Self-Storage	2,400	1 month LIBOR + 4.05%	5.0%	37.6%
Senior Debt 18	Self-Storage	6,310	1 month LIBOR + 5.05%	5.2%	59.1%
Senior Debt 19	Hospitality	22,355	1 month LIBOR + 3.50%	4.8%	68.8%
Senior Debt 20	Mixed Use	63,815	1 month LIBOR + 4.87%	5.3%	49.0%
Senior Debt 21	Office	21,100	1 month LIBOR + 3.75%	5.8%	70.0%
Senior Debt 22	Self-Storage	6,299	1 month LIBOR + 6.00%	7.8%	58.9%
Senior Debt 23	Office	16,290	1 month LIBOR + 3.40%	5.3%	67.5%
Senior Debt 24	Retail	29,500	6.25%	6.3%	68.5%
Senior Debt 25	Self-Storage	11,966	1 month LIBOR + 5.50%	7.3%	68.1%
Senior Debt 26	Multifamily	23,828	1 month LIBOR + 3.40%	5.0%	80.5%
Senior Debt 27	Multifamily	29,773	1 month LIBOR + 3.35%	5.3%	73.0%
Senior Debt 28	Land	16,400	1 month LIBOR + 6.00%	8.3%	45.7%
Senior Debt 29	Hospitality	8,523	1 month LIBOR + 4.80%	6.8%	62.5%
Senior Debt 30	Multifamily	18,382	1 month LIBOR + 5.70%	7.5%	70.7%
Senior Debt 31	Office	7,193	1 month LIBOR + 3.90%	6.0%	67.6%
Senior Debt 32	Manufactured Housing	10,175	1 month LIBOR + 4.40%	6.5%	60.3%
Senior Debt 33	Hospitality	14,000	1 month LIBOR + 4.47%	6.7%	44.8%
Senior Debt 34	Retail	14,250	1 month LIBOR + 3.95%	6.5%	61.2%
Senior Debt 35	Hospitality	21,000	1 month LIBOR + 4.14%	6.6%	56.0%
Senior Debt 36	Multifamily	25,404	1 month LIBOR + 3.10%	5.4%	73.1%
Senior Debt 37	Multifamily	38,802	1 month LIBOR + 3.10%	5.4%	73.4%
Senior Debt 38	Office	42,631	1 month LIBOR + 3.50%	5.8%	71.0%
Senior Debt 39	Retail	8,500	1 month LIBOR + 7.50%	7.6%	51.6%
Senior Debt 40	Hospitality	10,580	1 month LIBOR + 4.50%	6.8%	68.7%
Senior Debt 41	Multifamily	18,100	1 month LIBOR + 3.40%	5.4%	76.4%
Senior Debt 42	Hospitality	19,900	1 month LIBOR + 4.15%	6.5%	61.8%
Senior Debt 43	Multifamily	18,759	1 month LIBOR + 3.10%	5.5%	67.4%
Senior Debt 44	Office	34,400	1 month LIBOR + 4.01%	6.3%	68.2%
Senior Debt 45	Hospitality	20,930	1 month LIBOR + 3.75%	6.1%	62.6%
Senior Debt 46	Hospitality	15,500	1 month LIBOR + 4.00%	6.5%	56.4%
Senior Debt 47	Hospitality	4,988	1 month LIBOR + 4.25%	6.5%	47.7%
Senior Debt 48	Hospitality	12,750	1 month LIBOR + 4.45%	6.9%	62.9%
Senior Debt 49	Hospitality	10,706	1 month LIBOR + 4.50%	6.9%	64.0%
Senior Debt 50	Retail	9,400	1 month LIBOR + 4.20%	6.3%	77.1%
Senior Debt 51	Manufactured Housing	12,200	1 month LIBOR + 3.65%	5.9%	48.4%
Senior Debt 52	Manufactured Housing	24,100	1 month LIBOR + 3.65%	5.9%	53.8%
Senior Debt 53	Multifamily	23,318	1 month LIBOR + 2.65%	4.8%	75.8%
Senior Debt 54	Office	29,750	1 month LIBOR + 3.35%	5.4%	54.3%

53

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 55	Hospitality	34,376	1 month LIBOR + 3.99%	5.7%	31.0%
Senior Debt 56	Multifamily	12,941	1 month LIBOR + 2.65%	4.5%	71.6%
Senior Debt 57	Multifamily	37,402	1 month LIBOR + 2.75%	4.5%	79.3%
Senior Debt 58	Industrial	54,500	1 month LIBOR + 3.75%	5.5%	59.7%
Senior Debt 59	Office	21,825	1 month LIBOR + 3.50%	5.4%	70.9%
Senior Debt 60	Hospitality	7,100	1 month LIBOR + 4.00%	5.8%	70.3%
Senior Debt 61	Industrial	22,230	1 month LIBOR + 3.55%	5.3%	69.7%
Senior Debt 62	Multifamily	13,149	1 month LIBOR + 2.75%	4.3%	71.7%
Senior Debt 63	Multifamily	27,087	1 month LIBOR + 3.15%	5.0%	71.6%
Senior Debt 64	Multifamily	26,471	1 month LIBOR + 2.70%	2.8%	76.0%
Senior Debt 65	Multifamily	7,455	1 month LIBOR + 3.95%	5.0%	75.3%
Senior Debt 66	Multifamily	25,000	1 month LIBOR + 3.00%	4.5%	75.5%
Senior Debt 67	Office	25,500	1 month LIBOR + 4.35%	6.1%	64.9%
Senior Debt 68	Multifamily	14,403	1 month LIBOR + 3.10%	4.5%	63.7%
Senior Debt 69	Office	53,083	1 month LIBOR + 3.70%	5.0%	65.7%
Senior Debt 70	Industrial	25,350	1 month LIBOR + 3.50%	5.2%	58.1%
Senior Debt 71	Multifamily	11,800	1 month LIBOR + 3.15%	4.8%	72.4%
Senior Debt 72	Office	27,598	1 month LIBOR + 2.70%	2.8%	71.4%
Senior Debt 73	Multifamily	75,100	1 month LIBOR + 4.35%	6.0%	64.7%
Senior Debt 74	Manufactured Housing	1,379	5.50%	5.5%	62.8%
Senior Debt 75	Industrial	14,650	1 month LIBOR + 6.00%	6.8%	59.9%
Senior Debt 76	Multifamily	7,126	1 month LIBOR + 4.75%	5.8%	62.6%
Senior Debt 77	Multifamily	6,900	1 month LIBOR + 4.90%	5.7%	53.2%
Senior Debt 78	Multifamily	46,000	1 month LIBOR + 4.75%	5.8%	69.4%
Senior Debt 79	Multifamily	5,550	1 month LIBOR + 6.87%	7.9%	75.0%
Senior Debt 80	Industrial	16,956	1 month LIBOR + 6.25%	7.0%	61.0%
Senior Debt 81	Multifamily	14,630	1 month LIBOR + 4.75%	5.5%	65.3%
Senior Debt 82	Multifamily	23,400	1 month LIBOR + 4.65%	5.4%	52.7%
Senior Debt 83	Multifamily	4,300	1 month LIBOR + 5.50%	6.5%	87.4%
Senior Debt 84	Manufactured Housing	7,680	1 month LIBOR + 4.50%	5.0%	66.7%
Senior Debt 85	Mixed Use	30,465	1 month LIBOR + 5.15%	6.2%	67.0%
Senior Debt 86	Multifamily	3,140	1 month LIBOR + 6.25%	6.8%	73.5%
Senior Debt 87	Industrial	27,939	1 month LIBOR + 4.60%	5.1%	20.7%
Senior Debt 88 (3)	Multifamily	—	1 month LIBOR + 5.25%	5.4%	—%
Senior Debt 89	Hospitality	27,000	1 month LIBOR + 6.50%	6.9%	62.7%
Senior Debt 90	Multifamily	2,465	1 month LIBOR + 5.75%	6.5%	66.6%
Senior Debt 91	Multifamily	50,000	1 month LIBOR + 6.69%	7.4%	80.0%
Senior Debt 92	Self-Storage	29,895	1 month LIBOR + 5.00%	5.3%	58.8%
Senior Debt 93	Multifamily	12,605	1 month LIBOR + 4.75%	5.3%	70.0%
Senior Debt 94	Manufactured Housing	3,400	1 month LIBOR + 5.00%	5.3%	58.6%
Senior Debt 95	Multifamily	27,550	1 month LIBOR + 5.75%	6.0%	69.8%
Senior Debt 96	Multifamily	76,000	1 month LIBOR + 4.10%	4.4%	67.9%
Senior Debt 97	Multifamily	58,000	1 month LIBOR + 5.25%	5.4%	74.7%
Senior Debt 98	Manufactured Housing	5,020	1 month LIBOR + 5.25%	5.4%	65.9%
Senior Debt 99	Office	18,903	1 month LIBOR + 4.50%	5.3%	47.9%
Senior Debt 100	Office	69,166	5.15%	5.2%	52.5%
Senior Debt 101	Office	30,900	1 month LIBOR + 5.20%	5.5%	66.0%
Senior Debt 102	Multifamily	10,945	1 month LIBOR + 7.04%	7.3%	63.3%
Senior Debt 103	Self-Storage	11,600	1 month LIBOR + 4.76%	5.0%	66.6%
Senior Debt 104	Industrial	24,552	1 month LIBOR + 4.35%	4.6%	69.8%
Senior Debt 105	Manufactured Housing	5,000	1 month LIBOR + 5.90%	6.5%	58.8%
Senior Debt 106	Office	12,750	1 month LIBOR + 5.00%	5.3%	67.8%
Senior Debt 107	Multifamily	41,459	1 month LIBOR + 4.35%	4.6%	73.2%
Senior Debt 108	Multifamily	36,479	1 month LIBOR + 4.45%	4.7%	66.5%
Senior Debt 109	Multifamily	8,250	1 month LIBOR + 5.50%	5.8%	73.7%
Senior Debt 110	Retail	11,962	1 month LIBOR + 4.87%	5.1%	75.0%

54

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 111	Manufactured Housing	3,585	1 month LIBOR + 5.40%	5.9%	76.3%
Senior Debt 112	Multifamily	5,730	1 month LIBOR + 5.00%	5.3%	73.5%
Senior Debt 113	Multifamily	18,800	1 month LIBOR + 4.00%	4.1%	79.7%
Senior Debt 114	Industrial	14,250	1 month LIBOR + 4.50%	4.8%	66.3%
Senior Debt 115	Office	11,550	1 month LIBOR + 5.50%	5.8%	68.8%
Senior Debt 116	Multifamily	11,820	1 month LIBOR + 4.55%	4.8%	73.0%
Senior Debt 117	Multifamily	21,000	1 month LIBOR + 4.60%	4.8%	66.7%
Senior Debt 118	Office	26,000	1 month LIBOR + 5.00%	5.3%	63.9%
Senior Debt 119	Multifamily	54,500	1 month LIBOR + 3.80%	4.1%	77.0%
Senior Debt 120	Multifamily	10,153	1 month LIBOR + 3.50%	3.7%	60.1%
Senior Debt 121	Multifamily	21,000	1 month LIBOR + 4.95%	5.1%	84.2%
Senior Debt 122	Office	43,751	1 month LIBOR + 3.94%	4.1%	53.9%
Senior Debt 123 (4)	Multifamily	—	1 month LIBOR + 7.25%	7.5%	—%
Senior Debt 124	Multifamily	5,400	1 month LIBOR + 5.25%	5.5%	83.1%
Senior Debt 125	Hospitality	23,000	1 month LIBOR + 5.79%	6.0%	57.2%
Senior Debt 126	Multifamily	32,370	1 month LIBOR + 6.75%	7.0%	78.2%
Senior Debt 127	Multifamily	12,325	1 month LIBOR + 4.50%	4.7%	83.3%
Senior Debt 128	Multifamily	6,300	1 month LIBOR + 5.35%	5.6%	84.0%
Senior Debt 129	Multifamily	30,600	1 month LIBOR + 3.00%	3.1%	74.3%
Senior Debt 130	Multifamily	11,529	1 month LIBOR + 4.25%	4.6%	76.4%
Senior Debt 131	Multifamily	5,575	1 month LIBOR + 4.50%	4.8%	83.6%
Senior Debt 132	Multifamily	51,582	1 month LIBOR + 3.00%	3.3%	71.6%
Senior Debt 133	Multifamily	13,700	1 month LIBOR + 3.39%	3.5%	70.6%
Senior Debt 134	Multifamily	8,140	1 month LIBOR + 3.80%	4.1%	69.9%
Senior Debt 135	Multifamily	13,582	1 month LIBOR + 4.50%	4.8%	76.7%
Senior Debt 136	Multifamily	18,277	1 month LIBOR + 5.25%	5.5%	67.0%
Senior Debt 137	Multifamily	17,704	1 month LIBOR + 3.60%	3.8%	70.8%
Senior Debt 138	Multifamily	67,392	1 month LIBOR + 2.95%	3.1%	72.6%
Senior Debt 139	Multifamily	26,556	1 month LIBOR + 2.95%	3.1%	70.4%
Senior Debt 140	Hospitality	17,401	5.75%	5.8%	52.9%
Mezzanine Loan 1	Multifamily	3,480	9.50%	9.5%	84.3%
Mezzanine Loan 2	Retail	3,500	10.00%	10.0%	59.7%
Mezzanine Loan 3	Multifamily	6,500	1 month LIBOR + 10.25%	11.0%	90.4%
Mezzanine Loan 4	Retail	1,438	1 month LIBOR + 10.75%	11.0%	84.0%
Mezzanine Loan 5	Multifamily	3,000	1 month LIBOR + 9.20%	10.0%	62.2%
Mezzanine Loan 6	Multifamily	1,000	11.00%	11.0%	68.9%
		$3,037,546		5.3%	64.7%

________________________

(1) Our floating rate loan agreements contain the contractual obligation for the borrower to maintain an interest rate cap to protect against rising interest rates. In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the “cap rate”). When the floating rate exceeds the cap rate, the borrower receives a payment from the cap counterparty equal to the difference between the floating rate and the cap rate on the same notional principal amount for a specified period of time. When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates.

(2) Loan to value percentage is from metrics at origination.

(3) The total commitment of this loan is $40.5 million, however none was funded as of March 31, 2021.

(4) The total commitment of this loan is $31.5 million, however none was funded as of March 31, 2021.

55

The following table shows selected data from our commercial mortgage loans, held for sale, measured at fair value as of March 31, 2021 (dollars in thousands):

Loan Type	Property Type	Par Value	Interest Rate	Effective Yield	Loan to Value (1)
TRS Senior Debt 1	Manufactured Housing	$2,446	4.3%	4.3%	59.8%
TRS Senior Debt 2	Mixed Use	$15,973	4.0%	4.0%	63.7%
TRS Senior Debt 3	Industrial	$9,024	4.3%	4.3%	58.4%
TRS Senior Debt 4	Multifamily	$18,000	3.4%	3.4%	50.4%
TRS Senior Debt 5	Mixed Use	$2,625	4.2%	4.2%	55.3%
TRS Senior Debt 6	Retail	$7,660	4.4%	4.4%	66.6%
TRS Senior Debt 7	Office	$30,500	4.0%	4.0%	69.0%
TRS Senior Debt 8	Retail	$5,110	4.7%	4.7%	68.1%
TRS Senior Debt 9	Retail	$1,200	4.5%	4.5%	63.2%
TRS Mezzanine Loan 10	Multifamily	$100	1 month LIBOR + 14.00%	15.0%	76.4%
		$92,638		4.0%	62.5%

________________________

(1) Loan to value percentage is from metrics at origination.

The following table shows selected data from our real estate securities, available for sale, measured at fair value as of March 31, 2021 (dollars in thousands):

Type	Par Value	Interest Rate	Effective Yield
CMBS 1	$19,000	1 month LIBOR + 2.35%	2.5%
	$19,000		2.5%

The following table shows selected data from our other real estate investments, measured at fair value as of March 31, 2021 (dollars in thousands):

Type	Property Type	Par Value		Preferred Return
Preferred Equity 1	Retail	$	2,500	12.50%
		$	2,500

The following table shows selected data from our real estate owned assets in our portfolio as of March 31, 2021 (dollars in thousands):

Type	Property Type	Carrying Value
Real Estate Owned 1	Office	$	26,310
Real Estate Owned 2	Multifamily	37,523
		$	63,833

Results of Operations

We conduct our business through the following segments:

•The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

•The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

•The Conduit business operated through the Company's TRS, which is focused on generating superior risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

56

Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the three months ended March 31, 2021 and March 31, 2020 (dollars in thousands):

	Three Months Ended March 31,
	2021							2020
	Average Carrying Value (1)			Interest Income/Expense (2)		WA Yield/Financing Cost (3)(4)		Average Carrying Value (1)			Interest Income/Expense (2)		WA Yield/Financing Cost (3)(4)
Interest-earning assets:
Real estate debt	$	2,723,798		$	40,757	6.0%		$	2,702,936		$	43,369	6.4%
Real estate conduit	116,781			1,056		3.6%		100,175			1,190		4.8%
Real estate securities	79,668			424		2.1%		406,186			3,295		3.2%
Total	$	2,920,247		$	42,237	5.8%		$	3,209,297		$	47,854	6.0%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	340,485		$	2,830	3.3%		$	282,282		$	3,911	5.5%
Other financing and loan participation - commercial mortgage loans	44,939			527		4.7%		1,502			18		4.8%
Repurchase Agreements - real estate securities	123,322			1,246		4.0%		412,809			2,572		2.5%
Collateralized loan obligations	1,598,532			6,766		1.7%		1,776,274			17,991		4.1%
Total	$	2,107,278		$	11,369	2.2%		$	2,472,867		$	24,492	4.0%
Net interest income/spread				$	30,868	3.6%					$	23,362	2.0%
Average leverage % (5)	72.2		%					77.1		%
Weighted average levered yield (6)						15.2	%						12.7	%

________________________

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. Amounts are calculated based on daily averages for the three months ended March 31, 2021 and March 31, 2020, respectively.

(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.

(3) Calculated as interest income or expense divided by average carrying value.

(4) Annualized.

(5) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

(6) Calculated by dividing net interest income/spread by the net average interest-earning assets and average interest-bearing liabilities.

Interest income

Interest income for the three months ended March 31, 2021 and March 31, 2020 totaled $42.2 million and $47.9 million, respectively. As of March 31, 2021, our portfolio consisted of 146 commercial mortgage loans, held for investment, ten commercial mortgage loans, held for sale, measured at fair value, one investment in CMBS and one other real estate investment, measured at fair value. The decrease in interest income of $5.6 million was primarily due to a decrease of $289.1 million in the average carrying value of our interest-earning assets and a decrease in the one-month LIBOR, the benchmark index for our loans.

Interest expense

Interest expense for the three months ended March 31, 2021 decreased to $11.4 million compared to interest expense for three months ended March 31, 2020 of $24.5 million. The decrease in interest expense of $13.1 million was due to a decrease of $365.6 million in the average carrying value of our interest-earning liabilities and a decrease in the one-month LIBOR, the benchmark index for our financing lines.

57

Realized Gain/Loss on Commercial Mortgage Loans Held for Sale

Realized gain on commercial mortgage loans, held for sale, measured at fair value at the TRS for the three months ended March 31, 2021 was $6.6 million compared to a realized gain of $9.4 million for the three months ended March 31, 2020. The $2.8 million decrease in realized gain was due to the fact that there had been one sale of fixed-rate commercial real estate loans into the CMBS securitization market during the three months ended March 31, 2021 compared to two CMBS securitizations during the three months ended March 31, 2020. Proceeds were $147.9 million for the three months ended March 31, 2021, compared to $147.6 million for the three months ended March 31, 2020.

Realized Gain/Loss on Real Estate Securities Available for Sale

For the three months ended March 31, 2021 and March 31, 2020 our real estate securities, available for sale, measured at fair value had a realized loss of $1.1 million and $0.4 million included within the consolidated statements of operations. The loss is attributable to eight CMBS sales during the three months ended March 31, 2021. There had been one sale of CMBS securities during the three months ended March 31, 2020.

Unrealized Gain/Loss on Real Estate Securities Available for Sale

For the three months ended March 31, 2021 our real estate securities, available for sale, measured at fair value had an unrecognized unrealized gain of $8.0 million included within the consolidated statements of comprehensive income. The increase in fair value of real estate securities for the three months ended March 31, 2021 can be attributed mainly to the reversal of the unrealized losses on the eight CMBS sales that occurred in the quarter.

Expenses from operations

Expenses from operations for the three months ended March 31, 2021 and March 31, 2020 were made up of the following (dollars in thousands):

	Three Months Ended March 31,
	2021		2020
Asset management and subordinated performance fee	$	5,416	$	3,912
Administrative services expenses	3,474		4,112
Acquisition expenses	153		142
Professional fees	1,997		2,784
Real estate owned operating expenses	—		1,645
Depreciation and amortization	406		588
Other expenses	495		1,587
Total expenses from operations	$	11,941	$	14,770

The decrease in our expenses from operations was primarily related real estate owned operating expenses during the three months ended March 31, 2021. This decrease in real estate owned operating expenses was attributable to no operating expenses on the real estate assets owned during the three months ended March 31, 2021 compared to March 31, 2020. The decrease in other expenses was due to fewer travel & entertainment expenses for origination activities due to COVID-19. This decrease was partially offset by higher asset management and subordinated performance fees attributable to the $1.6 million in incentive fees during the three months ended March 31, 2021 compared to no incentive fees paid during the three months ended March 31, 2020.

Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended December 31, 2020

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.

58

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the three months ended March 31, 2021 and December 31, 2020 (dollars in thousands):

	Three Months Ended
	March 31, 2021							December 31, 2020
	Average Carrying Value (1)			Interest Income/Expense (2)		WA Yield/Financing Cost (3)(4)		Average Carrying Value (1)			Interest Income/Expense (2)		WA Yield/Financing Cost (3)(4)
Interest-earning assets:
Real estate debt	$	2,723,798		$	40,757	6.0%		$	2,681,645		$	42,623	6.4%
Real estate conduit	116,781			1,056		3.6%		72,588			756		4.2%
Real estate securities	79,668			424		2.1%		179,402			984		2.2%
Total	$	2,920,247		$	42,237	5.8%		$	2,933,635		$	44,363	6.0%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	340,485		$	2,830	3.3%		$	279,187		$	2,370	3.4%
Other financing and loan participation - commercial mortgage loans	44,939			527		4.7%		26,556			328		4.9%
Repurchase Agreements - real estate securities	123,322			1,246		4.0%		183,632			1,990		4.3%
Collateralized loan obligations	1,598,532			6,766		1.7%		1,645,097			7,128		1.7%
Total	$	2,107,278		$	11,369	2.2%		$	2,134,472		$	11,816	2.2%
Net interest income/spread				$	30,868	3.6%					$	32,547	3.8%
Average leverage % (5)	72.2		%					72.8		%
Weighted average levered yield (6)						15.2	%						16.3	%

________________________

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. Amounts are calculated based on daily averages for the three months ended March 31, 2021 and December 31, 2020, respectively.

(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.

(3) Calculated as interest income or expense divided by average carrying value.

(4) Annualized.

(5) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

(6) Calculated by dividing net interest income/spread by the net average interest-earning assets and average interest-bearing liabilities.

Interest income

Interest income for the three months ended March 31, 2021 and December 31, 2020 totaled $42.2 million and $44.4 million, respectively. As of March 31, 2021, our portfolio consisted of 146 commercial mortgage loans, held for investment, ten commercial mortgage loans, held for sale, measured at fair value, one investment in CMBS and one other real estate investment, measured at fair value. The decrease in interest income of $2.1 million was primarily due to lower yields on our interest-earning assets.

Interest expense

Interest expense for the three months ended March 31, 2021 decreased to $11.4 million compared to interest expense for three months ended December 31, 2020 of $11.8 million. The decrease in interest expense of $0.4 million was due to a decrease of $27.2 million in the average carrying value of our interest-earning liabilities.

59

Realized Gain/Loss on Commercial Mortgage Loans Held for Sale

Realized gain on commercial mortgage loans, held for sale, measured at fair value at the TRS for the three months ended March 31, 2021 was $6.6 million compared to a realized gain of $4.8 million for the three months ended December 31, 2020. The $1.8 million increase in realized gain was due to the fact that there had been one sale of fixed-rate commercial real estate loans into the CMBS securitization market during the three months ended March 31, 2021 with total proceeds of $147.9 million compared to one CMBS securitization during the three months ended December 31, 2020 with total proceeds of $106.0 million.

Realized Gain/Loss on Real Estate Securities Available for Sale

For the three months ended March 31, 2021 and December 31, 2020 our real estate securities, available for sale, measured at fair value had a realized loss of $1.1 million and zero included within the consolidated statements of operations. The loss is attributable to eight CMBS sales during the three months ended March 31, 2021. There had been no sales of CMBS securities during the three months ended December 31, 2020.

Expenses from operations

Expenses from operations for the three months ended March 31, 2021 and December 31, 2020 were made up of the following (dollars in thousands):

	Three Months Ended
	March 31, 2021		December 31, 2020
Asset management and subordinated performance fee	$	5,416	$	3,779
Administrative services expenses	3,474		2,940
Acquisition expenses	153		213
Professional fees	1,997		2,488
Real estate owned operating expenses	—		403
Depreciation and amortization	406		468
Other expenses	495		99
Total expenses from operations	$	11,941	$	10,390

The increase in our expenses from operations was primarily related to asset management and subordinated performance fee during the three months ended March 31, 2021. This increase in asset management and subordinated performance fee of $1.6 million was attributable the incentive fee incurred during the three months ended March 31, 2021 compared to none incurred during the three months ended December 31, 2020.

Liquidity and Capital Resources

Our principal demands for cash will be funding our loan investments, continuing debt service obligations, distributions to our stockholders and the payment of our operating and administrative expenses.

We expect to use additional debt and equity financing as a source of capital. Our board of directors currently intends to operate at a leverage level of between one to three times book value of equity. However, our board of directors may change this target without shareholder approval. In addition, for the three months ended March 31, 2021, we raised an additional $15.0 million through sales of preferred equity to an institutional investor. We anticipate that our debt and equity financing sources and our anticipated cash generated from operations will be adequate to fund our anticipated uses of capital.

In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by us or our subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.

Collateralized Loan Obligations

As of March 31, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 26 and 27 mortgage assets having a principal balance of $406.4 million and $417.9 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.

60

As of March 31, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, collateralized by interests in a pool of 57 and 59 mortgage assets having a principal balance of $827.9 million and $852.1 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October12, 2018, between the Company and BSPRT 2018-FL4 Issuer, Ltd.

As of March 31, 2021 and December 31, 2020, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 59 and 54 mortgage assets having a principal balance of $788.9 million and $799.8 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.

On March 25, 2021, BSPRT 2021-FL6 Issuer, Ltd. (the “Issuer”) and BSPRT 2021-FL6 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S. Bank National Association, as note administrator and trustee, which governs the issuance of approximately $645.8 million principal balance secured floating rate notes (the “Notes”), of which $573.1 million were purchased by third party investors and $72.6 million were purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 54,250 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.

As of March 31, 2021, the notes issued by BSPRT 2021-FL6 Issuer, Ltd. and BSPRT 2021-FL6 Co-Issuer, LLC, are collateralized by interests in a pool of 40 mortgage assets having a principal balance of $506.9 million (the "2021-FL6 Mortgage Assets"). The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd. is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.

Repurchase Agreements, Commercial Mortgage Loans

As of March 31, 2021, we have repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility and Barclays Repo Facility, the "Repo Facilities").

The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.

We expect to use the advances from these Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo Facilities generally provide that in the event of a decrease in the value of our collateral, the lenders can demand additional collateral. Should the value of our collateral decrease as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in our liquidity position.

61

The details of our Repo Facilities at March 31, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of March 31, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	300,000	$	111,108	$	989	2.41	%	10/6/2022
USB Repo Facility	100,000		—		93		N/A		6/15/2021
CS Repo Facility	200,000		10,000		980		4.50	%	8/19/2021
WF Repo Facility (2)	175,000		—		504		N/A		11/21/2021
Barclays Revolver Facility (3)	100,000		—		34		N/A		9/20/2021
Barclays Repo Facility (4)	300,000		31,817		486		1.96	%	3/15/2022
Total	$	1,175,000	$	152,925	$	3,086

________________________

(1) For the three months ended March 31, 2021. Includes amortization of deferred financing costs.

(2) There are two more one-year extension options available at the Company's discretion.

(3) There is one one-year extension option available at the Company's discretion.

(4) Includes one one-year extensions at the Company's option.

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. Since inception, the Company's outstanding loan increased as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company incurred $0.2 million of interest expense on SNB for the three months ended March 31, 2021. As of March 31, 2021 there was an outstanding balance of $34.0 million. The loan matures on February 9, 2023.

62

Mortgage Note Payable

On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of March 31, 2021 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $0.3 million of interest expense for the three months ended March 31, 2021.

Unsecured Debt

Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million of interest expense on the lending agreement with SBL for the three months ended March 31, 2021. As of March 31, 2021, there was an outstanding balance of $100.0 million.

Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs as of March 31, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of March 31, 2021
JP Morgan Securities LLC	$	16,609	$	89	$	23,430	1.73	%	7
Wells Fargo Securities, LLC	—		—		—		N/A		N/A
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	71,663		246		91,060		1.35	%	45
Credit Suisse AG	—		—		—		N/A		N/A
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	88,272	$	453	$	114,490	1.43	%	37
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	2.79	%	33

________________________

(1) Includes $95.6 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively.

63

The following tables summarize our Repurchase Agreements, Commercial Mortgage Loans and our MRAs for the three months ended March 31, 2021, 2020 and 2019, respectively:

	As of March 31, 2021
	Amount Outstanding		Average Outstanding Balance
	Q1		Q1
Repurchase Agreements, Commercial Mortgage Loans	$	152,925	$	340,485
Repurchase Agreements, Real Estate Securities	$	88,272	$	123,322
	As of March 31, 2020
	Amount Outstanding		Average Outstanding Balance
	Q1		Q1
Repurchase Agreements, Commercial Mortgage Loans	$	234,524	$	282,282
Repurchase Agreements, Real Estate Securities	$	496,880	$	412,809
	As of March 31, 2019
	Amount Outstanding		Average Outstanding Balance
	Q1		Q1
Repurchase Agreements, Commercial Mortgage Loans	$	370,889	$	357,850
Repurchase Agreements, Real Estate Securities	$	22,078	$	52,711

The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.

During the three months ended March 31, 2021, the maximum average outstanding balance was $475.5 million, of which $363.6 million was related to repurchase agreements on our commercial mortgage loans and $111.9 million for repurchase agreements on our real estate securities.

During the three months ended March 31, 2020, the maximum average outstanding balance was $721.0 million, of which $452.8 million was related to repurchase agreements on our commercial mortgage loans and $268.2 million for repurchase agreements on our real estate securities.

During the three months ended March 31, 2019, the maximum average outstanding balance was $473.4 million, of which $427.8 million was related to repurchase agreements on our commercial mortgage loans and $45.7 million for repurchase agreements on our real estate securities.

Private Placements

Since February 2018, we have been conducting offerings of our common stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock in offerings exempt from the registration requirements of the Securities Act.

There were no issuances of common stock, Series A Preferred Stock or Series C Preferred Stock during the three months ended March 31, 2021.

As of March 31, 2021, we had no outstanding binding purchase commitments for common stock, Series A Preferred Stock or Series C Preferred Stock.

On March 15, 2021, the Company and SBL entered into an agreement pursuant to which the SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock). The transaction settled on March 18, 2021.

64

The following table summarizes the issuance of Series D Preferred Stock in these offerings (dollars in thousands, except share amounts):

	Total
	Shares Issued	Proceeds
Balance, December 31, 2020	—	$	—
January 2021	—	—
February 2021	—	—
March 2021	17,950	89,722
Ending Balance March 31, 2021	17,950	$	89,722

As of March 31, 2021, we had no outstanding binding purchase commitments for Series D Preferred Stock.

The following tables present the activity in the Company's Series A Preferred Stock for the periods ended March 31, 2021 and March 31, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	1	2
Offering Costs	—	13
Amortization of offering costs	—	22
Ending Balance March 31, 2021	25,566	$	127,581
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	—	2
Offering Costs	—	(5)
Amortization of offering costs	—	24
Ending Balance, March 31, 2020	40,514	$	202,235

The following table presents the activity in the Company's Series C Preferred Stock for the period ended March 31, 2021 and March 31, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering Costs	—	—
Amortization of offering costs	—	2
Ending Balance, March 31, 2021	1,400	$	6,964

	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(5)
Amortization of offering costs	—	1
Ending Balance, March 31, 2020	1,400	$	6,962

65

The following table present the activity in the Company's Series D Preferred Stock for the three months ended March 31, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(26)
Amortization of offering costs	—	—
Ending Balance, March 31, 2021	17,950	$	89,722

As of March 31, 2020 the Company did not have any Series D Preferred Stock outstanding.

Distributions

In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes.

Distributions on our common stock are payable when authorized and declared by our Board of Directors. Distribution payments are dependent on the availability of funds. Our Board of Directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

Dividends payable on each share of Series A, Series C and Series D Preferred Stock are generally equal to the quarterly dividend that would have been paid had such share of Preferred Stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels. To the extent dividends on shares of Preferred Stock are not authorized and declared by our board of directors and paid by the Company monthly, the dividend amounts will accrue.

In April 2020, the Company’s Board of Directors unanimously approved a transition in the timing of its dividend payments, if any, to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly accrual and payment basis. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.

In March 2021 the Company’s board of directors declared the following first quarter 2021 dividends: (i) a quarterly cash dividend of $0.275 per common share (equivalent to $1.10 per annum) which was paid in April 2021 to holders of record on March 31, 2021, and (ii) a quarterly cash dividend per share of Series A Preferred Stock and Series C Preferred Stock equivalent to the amount of distributions that would have been paid upon a conversion of such share of Preferred Stock into common stock, which was paid in April 2021 to holders of record on March 31, 2021. The initial dividend on the Series D Preferred Stock will be payable in July 2021 to holders of record as of June 30, 2021.

The below table shows the distributions paid on shares outstanding of common stock during the three months ended March 31, 2021 and March 31, 2020 (dollars in thousands):

Three months ended March 31, 2021
Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 4, 2021	$	9,652	$	2,584
Total	$	9,652	$	2,584

Three Months Ended March 31, 2020
Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 2, 2020	$	4,154	$	1,211
February 5, 2020	4,177		1,210
March 2, 2020	3,919		1,130
Total	$	12,250	$	3,551

66

The following table shows the sources for the payment of distributions to common stockholders for the periods presented (dollars in thousands):

	Three Months Ended March 31,
	2021				2020
Distributions:
Distributions paid in Cash	$	9,652			$	12,250
Distributions Reinvested	2,584				3,551
Total Distributions	$	12,236			$	15,801
Source of Distribution Coverage:
Net Income	$	9,652	78.9	%	$	—	—	%
Available Cash on hand	—		—	%	12,250		77.5	%
Common Stock Issued Under DRIP	2,584		21.1	%	3,551		22.5	%
Total Sources of Distributions	$	12,236	100.0	%	$	15,801	100.0	%
Net Income/(Loss) applicable to common stock (GAAP)	$	23,408			$	(11,915)

Cash Flows

Cash Flows for the Three months ended March 31, 2021

Net cash provided by operating activities for the three months ended March 31, 2021 was $4.4 million. Cash inflows were primarily driven by net income of $30.1 million, partially offset by net outflows of $25.0 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value.

Net cash used in investing activities for the three months ended March 31, 2021 was $307.8 million. Cash outflows were primarily driven by origination and purchase of $520.8 million of commercial mortgage loans, held for investment. Outflows were offset by proceeds from the sale/repayment of real estate securities of $159.3 million and principal repayments on commercial mortgage loans, held for investment of $52.8 million.

Net cash provided by financing activities for the three months ended March 31, 2021 was $322.1 million. Cash inflows were primarily driven by proceeds from net borrowing on CLOs of $453.7 million, borrowings from other financing and loan participation and unsecured debt of $102.6 million and proceeds from issuances of redeemable convertible preferred stock of $15.0 million. Inflows were offset by net repayments on our Repo Facilities of $123.4 million and CMBS MRAs of $98.6 million.

Cash Flows for the Three months ended March 31, 2020

Net cash provided by operating activities for the three months ended March 31, 2020 was $37.4 million. Cash inflows were primarily driven by net cash inflows of $18.8 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value and $48.2 million of interest proceeds received. Inflows were partially offset by the payment of $20.9 million of interest expense.

Net cash provided by investing activities for the three months ended March 31, 2020 was $3.6 million. Cash outflows were primarily driven by the origination and purchase of $287.6 million of commercial mortgage loans, held for investment and the purchase of real estate securities of $134.8 million. Outflows were offset by proceeds from principal repayments of $426.7 million received on commercial mortgage loans.

Net cash provided by financing activities for the three months ended March 31, 2020 was $29.0 million. Cash inflows were primarily driven by proceeds from net borrowing on our CMBS MRAs of $102.5 million. Inflows were partially offset by the payment of $16.8 million in cash distributions to stockholders and $6.7 million of stock repurchases and repayments on CLOs of $68.9 million.

Election as a REIT

We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. As a REIT, if we meet certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, we will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and U.S. federal income and excise taxes on our undistributed income.

67

Contractual Obligations and Commitments

Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of March 31, 2021 are summarized as follows (dollars in thousands):

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Unfunded loan commitments (1)	$	45,331	$	154,197	$	70,125	$	—	$	269,653
Repurchase agreements - commercial mortgage loans	41,817		111,108		—		—		152,925
Repurchase agreements - real estate securities	88,272		—		—		—		88,272
CLOs (2)	—		—		—		2,092,927		2,092,927
Mortgage Note Payable	—		—		—		29,167		29,167
Total	$	175,420	$	265,305	$	70,125	$	2,122,094	$	2,632,944

________________________

(1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.

(2) Excludes $339.7 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheet as of March 31, 2021.

Related Party Arrangements

Benefit Street Partners L.L.C.

Amended Advisory Agreement

Refer to “Note 11 - Related Party Transactions and Arrangements” for a summary of the Company’s Advisory Agreement with the Advisor and amounts paid to the Advisor pursuant to the Advisory Agreement for the three months ended March 31, 2021 and 2020.

Lending Agreement with Stockholder

Pursuant to a lending and security agreement with SBL, which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million interest expense on the lending agreement with SBL for the three months ended March 31, 2021. As of March 31, 2021 there was $100.0 million outstanding under the lending agreement.

SBL also holds 17,950 shares of the Company's outstanding shares of Series D Preferred Stock of which, 14,950 shares were acquired in exchange for an equivalent number of shares of Series A Preferred Stock in March 2021. SBL also acquired an additional 3,000 shares of Series D Preferred Stock at the liquidation preference of $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock) in such transaction.

Off Balance Sheet Arrangements

We currently have no off balance sheet arrangements as of March 31, 2021 and through the date of the filing of this Form 10-Q.

Non-GAAP Financial Measures

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT") and the Investment Program Association ("IPA") industry trade groups, have each promulgated measures respectively known as funds from operations ("FFO") and modified funds from operations ("MFFO"), which we believe to be appropriate supplemental measures to reflect the operating performance of a REIT. The use of FFO and MFFO is recommended by the REIT industry as supplemental performance measures. However, FFO and MFFO are not substitutes to generally accepted accounting principles ("GAAP") net income or loss. We believe our presentations of FFO and MFFO assist investors in analyzing and comparing our operating and financial performance between reporting periods.

68

We define FFO, a non-GAAP measure, consistent with the standards established by NAREIT defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of certain real estate assets, gains or losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization related to real estate and after adjustments for unconsolidated partnerships and joint ventures on the same basis. Our business plan is to operate as a mortgage REIT with our portfolio consisting of commercial mortgage loan investments, investments in real estate securities and real estate owned assets.

We define MFFO, a non-GAAP measure, consistent with the IPA's Guideline 2010 - 01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the "Practice Guideline") issued by the IPA in November 2010. We define MFFO as FFO further adjusted for the following items, as applicable: acquisition fees; accretion of discounts and amortization of premiums and other loan expenses on debt investments; fair value adjustments on real estate related investments such as commercial real estate securities or derivative investments included in net income; impairments of real estate related investments, gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses from fair value adjustments on real estate securities, including commercial mortgage backed securities and other securities, interest rate swaps and other derivatives not deemed to be hedges and foreign exchanges holdings; unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums and other loan expenses on debt investments, gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are not reflective of our core operations.

Our MFFO calculation excludes impairments of real estate related investments, including loans. We assess the credit quality of our investments and adequacy of credit loss reserves on a quarterly basis, or more frequently as necessary. For loans classified as held for investment, we establish and maintain a general allowance for credit losses inherent in our portfolio at the reporting date and, where appropriate, a specific allowance for credit losses for loans we have determined to be impaired at the reporting date. An individual loan is considered impaired when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. Real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. Significant judgment is required in this analysis. We consider the estimated net recoverable value of the loan or security as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business. Fair value is typically estimated based upon discounting the expected future cash flows of the underlying collateral taking into consideration the discount rate, capitalization rate, occupancy, creditworthiness of major tenants and many other factors. This requires significant judgment and because it is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a specific allowance for credit losses is recorded. In the case of real estate securities, all or a portion of a deemed impairment may be recorded. Due to our limited life, any allowance for credit losses or impairment of real estate securities recorded may be difficult to recover.

69

The table below reflects the items deducted or added to net income or loss in our calculation of FFO and MFFO for the three months ended March 31, 2021 and March 31, 2020 (dollars in thousands):

	Three Months Ended March 31,
	2021		2020
Funds From Operations:
Net income/(loss)	$	30,146	$	(7,400)
Impairment losses on real estate owned assets	—		398
Depreciation and amortization	406		588
Funds from operations	$	30,552	$	(6,414)
Modified Funds From Operations:
Funds from operations	$	30,552	$	(6,414)
Amortization of premiums, discounts and fees on investments, net	(1,169)		(1,710)
Acquisition fees and acquisition expenses	153		142
Unrealized (gain)/loss on financial instruments	(2,594)		6,831
Provision/(benefit) for credit losses	(2,331)		14,597
Modified funds from operations (1)	$	24,611	$	13,446

________________________

(1) Modified funds from operations for the three months ended March 31, 2020 includes a non-cash charge of $4.5 million related to the call of BSPRT 2017 - FL2 CLO on January 15, 2020. Excluding the non-cash charge modified funds from operations would be $17.9 million. For three months ended March 31, 2021 there were no such non-cash adjustment.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Credit Risk

Our investments are subject to a high degree of credit risk. Credit risk is the exposure to loss from loan defaults. Default rates are subject to a wide variety of factors, including, but not limited to, borrower financial condition, property performance, property management, supply/demand factors, construction trends, consumer behavior, regional economics, interest rates, the strength of the U.S. economy, and other factors beyond our control. All loans are subject to a certain probability of default. We manage credit risk through the underwriting process, acquiring our investments at the appropriate discount to face value, if any, and establishing loss assumptions. We also carefully monitor the performance of the loans, as well as external factors that may affect their value.

Capital Market Risk

We are exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under repurchase obligations or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt capital markets to inform our decisions on the amount, timing and terms of capital we raise.

The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices.

70

Interest Rate Risk

Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of March 31, 2021 and December 31, 2020, our portfolio included 140 and 133 variable rate investments, respectively, based on LIBOR for various terms. Borrowings under our repurchase agreements are also based on LIBOR. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 50 or 100 basis points or decrease by 25 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity.

For the LIBOR sensitivity range, a reduction in LIBOR results in an increase in our portfolio return. This is driven by the LIBOR floor in place for majority of our commercial mortgage loans, held for investment. In contrast, the majority of our financing instruments do not have LIBOR floors. The presence of a LIBOR floor on interest-bearing assets coupled with lack of LIBOR floor on the majority of interest bearing liabilities allows the portfolio to generate a higher return for a decrease in LIBOR rate compared to increase in LIBOR rate for the LIBOR range presented:

	Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Interest Rates	March 31, 2021		December 31, 2020
(-) 25 Basis Points	1.89	%	2.16	%
Base Interest Rate	—	%	—	%
(+) 50 Basis Points	(5.73)	%	(5.87)	%
(+) 100 Basis Points	(9.36)	%	(9.86)	%

Real Estate Risk

The market values of commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, the impacts of the COVID-19 pandemic, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; and demographic factors. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

71

PART II

Item 1. Legal Proceedings.

The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.

Item 1A. Risk Factors.

Our potential risks and uncertainties are presented in the section entitled "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes from these risk factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

Share repurchase activity under the SRP during three months ended March 31, 2021 was as follows:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,351	521,796	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
Cumulative as of March 31, 2021	9,445	4,643,531	$	19.62

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 shares which for administrative reasons were processed in March 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,885,340 shares were not fulfilled for the second semester of 2020.

Unregistered Sales of Equity Securities

Refer to “Note 9 - Stock Transactions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of the agreement we entered into with SBL pursuant to which SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (with the proceeds reduced by the accrued and unpaid dividends on the exchanged Series A Preferred Stock). The terms of the Series D Preferred Stock are described in “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

The offer and sale of the Series D Preferred Stock was conducted in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder.

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

72

Item 6. Exhibits.

EXHIBITS INDEX

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
3.1	Articles Supplementary of Benefit Street Partners Realty Trust, Inc., dated March 17, 2021, relating to Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 19, 2021).
10.1	Purchase and Exchange Agreement, dated March 15, 2021, by and between Benefit Street Partners Realty Trust, Inc. and Security Benefit Life Insurance Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 19, 2021).
10.2	Indenture, dated as of March 25, 2021, by and among BSPRT 2021-FL6 Issuer, Ltd., BSPRT 2021-FL6 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator and custodian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 30, 2021).
31.1*	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	XBRL (eXtensible Business Reporting Language). The following materials from Benefit Street Partners Realty Trust, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

____________________________________________

*Filed herewith.

73

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Benefit Street Partners Realty Trust, Inc.
Dated:	May 11, 2021	By	/s/ Richard J. Byrne
			Name: Richard J. Byrne
			Title: Chief Executive Officer and President
			(Principal Executive Officer)
Dated:	May 11, 2021	By	/s/ Jerome S. Baglien
			Name: Jerome S. Baglien
			Title: Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

74