10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________ 

FORM 10-Q

__________________________________ 

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2019

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                    

Commission File Number: 001-34452

__________________________________ 

Apollo Commercial Real Estate Finance, Inc.

(Exact name of registrant as specified in its charter)

__________________________________ 

Maryland	27-0467113
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Apollo Commercial Real Estate Finance, Inc.

c/o Apollo Global Management, LLC

9 West 57th Street, 43rd Floor,

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 515–3200

(Registrant’s telephone number, including area code)

__________________________________ 

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  ¨

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  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

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. ¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 23, 2019, there were 136,281,597 shares, par value $0.01, of the registrant’s common stock issued and outstanding.

Table of Contents

	Page
Part I — Financial Information
Item 1. Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures about Market Risk	36
Item 4. Controls and Procedures	38
Part II — Other Information
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands—except share data)

	March 31, 2019			December 31, 2018
Assets:
Cash and cash equivalents	$	109,343		$	109,806
Commercial mortgage loans, net (includes $3,679,993 and $3,197,900 pledged as collateral under secured debt arrangements in 2019 and 2018, respectively)	4,003,089			3,878,981
Subordinate loans, net	1,183,910			1,048,612
Loan proceeds held by servicer	—			1,000
Other assets	36,540			33,720
Derivative assets, net	8,715			23,700
Total Assets	$	5,341,597		$	5,095,819
Liabilities and Stockholders' Equity
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $17,828 and $17,555 in 2019 and 2018, respectively)	$	2,141,939		$	1,879,522
Convertible senior notes, net	558,664			592,000
Accounts payable, accrued expenses and other liabilities	91,557			104,746
Payable to related party	9,613			9,804
Total Liabilities	2,801,773			2,586,072
Commitments and Contingencies (see Note 14)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
Series B preferred stock, 6,770,393 shares issued and outstanding ($169,260 liquidation preference)	68			68
Series C preferred stock, 6,900,000 shares issued and outstanding ($172,500 liquidation preference)	69			69
Common stock, $0.01 par value, 450,000,000 shares authorized, 136,254,352 and 133,853,565 shares issued and outstanding in 2019 and 2018, respectively	1,363			1,339
Additional paid-in-capital	2,671,100			2,638,441
Accumulated deficit	(132,776		)	(130,170		)
Total Stockholders’ Equity	2,539,824			2,509,747
Total Liabilities and Stockholders’ Equity	$	5,341,597		$	5,095,819

See notes to unaudited condensed consolidated financial statements.

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Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations (Unaudited)

(in thousands—except share and per share data)

	Three months ended March 31,
	2019			2018
Net interest income:
Interest income from commercial mortgage loans	$	78,286		$	52,114
Interest income from subordinate loans	40,839			33,853
Interest expense	(36,295		)	(22,740		)
Net interest income	82,830			63,227
Operating expenses:
General and administrative expenses (includes equity-based compensation of $3,901 and $3,342 in 2019 and 2018, respectively)	(6,151		)	(4,998		)
Management fees to related party	(9,613		)	(8,092		)
Total operating expenses	(15,764		)	(13,090		)
Other income	518			203
Foreign currency gain	6,894			10,125
Loss on derivative instruments (includes unrealized losses of $14,985 and $8,855 in 2019 and 2018, respectively)	(6,720		)	(11,032		)
Net income	$	67,758		$	49,433
Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Net income per share of common stock:
Basic	$	0.45		$	0.38
Diluted	$	0.43		$	0.38
Basic weighted-average shares of common stock outstanding	134,607,107			110,211,853
Diluted weighted-average shares of common stock outstanding	164,683,086			111,871,429
Dividend declared per share of common stock	$	0.46		$	0.46

See notes to unaudited condensed consolidated financial statements.

5

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

(in thousands—except share and per share data)

	Preferred Stock			Common Stock			Additional Paid-In-Capital			Accumulated Deficit			Total
	Shares	Par		Shares	Par
Balance at January 1, 2018	13,670,393	$	137	107,121,235	$	1,071	$	2,170,078		$	(83,143	)	$	2,088,143
Capital increase (decrease) related to Equity Incentive Plan	—	—		345,996	4		(1,389		)	—			(1,385		)
Issuance of common stock	—	—		15,525,000	155		275,724			—			275,879
Offering costs	—	—		—	—		(377		)	—			(377		)
Net income	—	—		—	—		—			49,433			49,433
Dividends declared on preferred stock	—	—		—	—		—			(6,835		)	(6,835		)
Dividends declared on common stock - $0.46 per share	—	—		—	—		—			(57,328		)	(57,328		)
Balance at March 31, 2018	13,670,393	$	137	122,992,231	$	1,230	$	2,444,036		$	(97,873	)	$	2,347,530

	Preferred Stock			Common Stock			Additional Paid-In-Capital			Accumulated Deficit			Total
	Shares	Par		Shares	Par
Balance at January 1, 2019	13,670,393	$	137	133,853,565	$	1,339	$	2,638,441		$	(130,170	)	$	2,509,747
Capital decrease related to Equity Incentive Plan	—	—		433,426	4		(1,099		)	—			(1,095		)
Conversions of convertible senior notes for common stock	—	—		1,967,361	20		33,758			—			33,778
Net income	—	—		—	—		—			67,758			67,758
Dividends declared on preferred stock	—	—		—	—		—			(6,835		)	(6,835		)
Dividends declared on common stock - $0.46 per share	—	—		—	—		—			(63,529		)	(63,529		)
Balance at March 31, 2019	13,670,393	$	137	136,254,352	$	1,363	$	2,671,100		$	(132,776	)	$	2,539,824

See notes to unaudited condensed consolidated financial statements.

6

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

(in thousands)

	For the three months ended March 31,
	2019			2018
Cash flows (used in) provided by operating activities:
Net income	$	67,758		$	49,433
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of discount/premium and PIK	(19,611		)	(15,695		)
Amortization of deferred financing costs	3,461			2,545
Equity-based compensation	(1,095		)	(1,385		)
Foreign currency gain	(5,828		)	(9,853		)
Unrealized loss on derivative instruments	14,985			8,855
Changes in operating assets and liabilities:
Proceeds received from PIK	—			55,000
Other assets	(2,898		)	(2,620		)
Accounts payable, accrued expenses and other liabilities	620			2,075
Payable to related party	(191		)	(76		)
Net cash (used in) provided by operating activities	57,201			88,279
Cash flows used in investing activities:
New funding of commercial mortgage loans	(197,000		)	(476,951		)
Add-on funding of commercial mortgage loans	(105,452		)	(13,185		)
New funding of subordinate loans	(244,844		)	(11,687		)
Add-on funding of subordinate loans	(4,879		)	(5,208		)
Proceeds and payments received on commercial mortgage loans	191,317			90,547
Proceeds and payments received on subordinate loans	130,010			257,548
Origination and exit fees received on commercial mortgage and subordinate loans	6,069			19,085
Decrease in collateral held related to derivative contracts	(18,180		)	(15,220		)
Net cash (used in) provided by investing activities	(242,959		)	(155,071		)
Cash flows from financing activities:
Proceeds from issuance of common stock	—			275,879
Payment of offering costs	—			(38		)
Proceeds from secured debt arrangements	412,434			416,549
Repayments of secured debt arrangements	(156,747		)	(538,562		)
Exchanges and conversions of convertible senior notes	(704		)	—
Payment of deferred financing costs	(91		)	(2,234		)
Dividends on common stock	(62,762		)	(57,328		)
Dividends on preferred stock	(6,835		)	(6,835		)
Net cash (used in) provided by financing activities	185,295			87,431
Net increase (decrease) in cash and cash equivalents	(463		)	20,639
Cash and cash equivalents, beginning of period	109,806			77,671
Cash and cash equivalents, end of period	$	109,343		$	98,310
Supplemental disclosure of cash flow information:
Interest paid	$	32,428		$	26,517
Supplemental disclosure of non-cash financing activities:
Exchange of convertible senior notes for common stock	$	33,778		$	—
Dividend declared, not yet paid	$	70,364		$	63,598
Offering costs payable	$	—		$	339
Loan proceeds held by servicer	$	—		$	1,000
Deferred financing costs, not yet paid	$	3,643		$	—

See notes to unaudited condensed consolidated financial statements.

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Apollo Commercial Real Estate Finance Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, LLC (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss reserves and impairment. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment.

Recent Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployees Share-Based Payment Accounting" ("ASU 2018-07"). The intention of ASU 2018-07 is to expand the scope of Topic 718 to include share-based payment transactions in exchange for goods and services from nonemployees. These share-based payments will now be measured at grant-date fair value of the equity instrument issued. Upon adoption, only liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established should be remeasured through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 and is applied retrospectively. We adopted ASU 2018-07 in the first quarter of 2019 and it did not have any impact on our condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326)" ("ASU 2016-13"). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.  The guidance will replace the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The guidance is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our condensed consolidated financial statements, we expect that the adoption will result in higher provisions for potential loan losses.    

8

Note 3 – Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair values. Market based, or observable inputs are the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy as noted in ASC 820 "Fair Value Measurements and Disclosures" are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods will be appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The estimated fair values of our derivative instruments are determined using a discounted cash flow analysis on the

expected cash flows of each derivative. The fair values of interest rate caps are determined using the market standard

methodology of discounting the future expected cash receipts (or payments) that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected cash flows are based on an

expectation of future interest rates derived from observable market interest rate curves and volatilities. The fair values of

foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange

rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for

the underlying countries. Our derivative instruments are classified as Level II in the fair value hierarchy.

The following table summarizes the levels in the fair value hierarchy into which our financial instruments were categorized as of March 31, 2019 and December 31, 2018 ($ in thousands): 

	Fair Value as of March 31, 2019								Fair Value as of December 31, 2018
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Derivative assets, net	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700
Total	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700

Note 4 – Commercial Mortgage and Subordinate Loans, Net

Our loan portfolio was comprised of the following at March 31, 2019 and December 31, 2018 ($ in thousands):

Loan Type	March 31, 2019		December 31, 2018
Commercial mortgage loans, net	$	4,003,089	$	3,878,981
Subordinate loans, net	1,183,910		1,048,612
Total loans, net	$	5,186,999	$	4,927,593

Our loan portfolio consisted of 93% and 91% floating rate loans, based on amortized cost, as of March 31, 2019 and December 31, 2018, respectively.

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Activity relating to our loan investment portfolio, for the three months endedMarch 31, 2019, was as follows ($ in thousands):

	Principal Balance			Deferred Fees/Other Items (1)			Provision for Loan Loss (2)			Carrying Value
December 31, 2018	$	4,982,514		$	(17,940	)	$	(36,981	)	$	4,927,593
New loan fundings	441,844			—			—			441,844
Add-on loan fundings (3)	110,331			—			—			110,331
Loan repayments	(322,354		)	—			—			(322,354		)
Gain (loss) on foreign currency translation	15,033			(136		)	—			14,897
Deferred fees	—			(6,069		)	—			(6,069		)
PIK interest and amortization of fees	14,321			6,436			—			20,757
March 31, 2019	$	5,241,689		$	(17,709	)	$	(36,981	)	$	5,186,999

———————

(1)Other items primarily consist of purchase discounts or premiums, exit fees and deferred origination expenses.

(2)In addition to the $37.0 million provision for loan loss, we recorded an impairment of $3.0 million against an investment previously recorded under other assets on our condensed consolidated balance sheet.

(3) Represents fundings for loans closed prior to 2019.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	March 31, 2019			December 31, 2018
Number of loans	69			69
Principal balance	$	5,241,689		$	4,982,514
Carrying value	$	5,186,999		$	4,927,593
Unfunded loan commitments (1)	$	1,039,089		$	1,095,598
Weighted-average cash coupon (2)	8.4		%	8.4		%
Weighted-average remaining term (3)	2.9 years			2.8 years

———————

(1) Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2) For floating rate loans, based on applicable benchmark rates as of the specified dates.

(3) Assumes all extension options are exercised.

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Property Type	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Hotel	$	1,330,842	25.7	%	$	1,286,590	26.1	%
Residential-for-sale: construction	631,501		12.1	%	528,510		10.7	%
Residential-for-sale: inventory	421,815		8.1	%	577,053		11.7	%
Office	956,989		18.5	%	832,620		16.9	%
Urban Predevelopment	610,888		11.8	%	683,886		13.9	%
Multifamily	521,087		10.0	%	448,899		9.1	%
Industrial	227,206		4.4	%	32,000		0.6	%
Retail Center	156,008		3.0	%	156,067		3.2	%
Healthcare	144,310		2.8	%	156,814		3.2	%
Mixed Use	114,284		2.2	%	73,957		1.5	%
Other	72,069		1.4	%	151,197		3.1	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

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The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Geographic Location	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Manhattan, NY	$	1,825,136	35.2	%	$	1,669,145	33.9	%
Brooklyn, NY	547,139		10.5	%	346,056		7.0	%
Northeast	18,751		0.4	%	23,479		0.5	%
West	635,733		12.3	%	614,160		12.5	%
Midwest	617,599		11.9	%	631,710		12.8	%
Southeast	567,794		10.9	%	559,043		11.3	%
Southwest	120,127		2.3	%	96,345		2.0	%
Mid Atlantic	110,754		2.1	%	211,775		4.3	%
United Kingdom	668,507		12.9	%	700,460		14.2	%
Other International	75,459		1.5	%	75,420		1.5	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

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

1.    Very low risk

2.    Low risk

3. Moderate/average risk

4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or has been impaired

The following table allocates the carrying value of our loan portfolio based on our internal risk ratings at the dates indicated ($ in thousands):

	March 31, 2019					December 31, 2018
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio		Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—	%	—	$	—	—	%
2	2	58,847		1	%	3	138,040		3	%
3	64	4,915,843		95	%	63	4,573,930		93	%
4	—	—		—	%	—	—		—	%
5	3	212,309		4	%	3	215,623		4	%
	69	$	5,186,999	100	%	69	$	4,927,593	100	%
Weighted-average risk rating				3.1					3.1

We evaluate our loans for possible impairment on a quarterly basis. We regularly evaluate the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service

11

requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the property’s liquidation value. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such loan loss analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. An allowance for loan loss is established when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan.

We evaluate modifications to our loan portfolio to determine if the modifications constitute a troubled debt restructuring ("TDR") and/or substantial modification, under ASC Topic 310, "Receivables." During the second quarter of 2018, we determined that a modification of one commercial mortgage loan, secured by a retail center in Cincinnati, OH, with a principal balance of $169.0 million constituted a TDR as the interest rate spread was reduced from 5.5% over LIBOR to 3.0% over LIBOR. The entity in which we own an interest and which owns the underlying property was deemed to be a variable interest entity ("VIE") and it was determined that we are not the primary beneficiary of that VIE. During the fourth quarter of 2018, we recorded a $15.0 million loan loss provision against this loan. After the loan loss provision, the amortized cost of the loan was $156.0 million as of March 31, 2019 and December 31, 2018. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using the direct capitalization method. The significant unobservable inputs used in determining the collateral value were in-place net operating income and capitalization rate which were $10.5 million and 6.8%, respectively. The loan is on accrual status and we continue to receive contractual interest due. As of March 31, 2019 and 2018, this loan was assigned a risk rating of 5.

We recorded a $10.0 million loan loss provision and impairment against a commercial mortgage loan secured by a fully-built, for-sale residential condominium units located in Bethesda, MD. This was comprised of (i) $5.0 million loan loss recorded during the second quarter of 2018, and (ii) $2.0 million loan loss provision and $3.0 million of impairment recorded during the second quarter of 2017. The impairment was recorded on an investment previously recorded under other assets on our condensed consolidated balance sheet. After the loan loss provisions and related impairment, the amortized cost balance of the loan was $24.2 million and $27.2 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision and impairment were based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision and related impairment). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were sales price per square foot and discount rate which were an average of $662 per square foot across properties and 15%, respectively. Effective April 1, 2017, we ceased accruing all interest associated with the loan and account for the loan on a cost-recovery basis (all proceeds are applied towards the loan balance). As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During 2016, we recorded a loan loss provision of $10.0 million on a commercial mortgage loan and $5.0 million on a contiguous subordinate loan secured by a multifamily property located in Williston, ND. After the loan loss provisions, the amortized cost of the loan was $32.1 million and $32.4 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were terminal capitalization rate and discount rate which were 11% and 10%, respectively. The entity in which we own an interest and which owns the underlying property was deemed to be a VIE and it was determined that we are not the primary beneficiary of the VIE. We ceased accruing interest associated with the loan and only recognize interest income upon receipt of cash. As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During the year ended December 31, 2018, we sold a $75.0 million ($17.7 million funded) subordinate position of our $265.0 million loans for the construction of an office campus in Renton, Washington. As of March 31, 2019, our exposure to the property is limited to a $190.0 million ($96.1 million funded) mortgage loan. This transaction was evaluated under ASC 860 - Transfers and Servicing and we determined that it qualifies as a sale and accounted for as such.

As of March 31, 2019 and December 31, 2018, the aggregate loan loss provision was $37.0 million for commercial mortgage loans and subordinate loans.

We recognized payment-in-kind ("PIK") interest of $14.5 million and $10.6 million for the three months endedMarch 31, 2019 and 2018, respectively.

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We recognized pre-payment penalties and accelerated fees of $3.7 million for the three months endedMarch 31, 2019. There were no pre-payment penalties and accelerated fees for the three months ended March 31, 2018.

Note 5 – Loan Proceeds Held by Servicer

Loan proceeds held by servicer represents principal payments held by our third-party loan servicer as of the balance sheet date which were remitted to us subsequent to the balance sheet date. Loan proceeds held by servicer was$1.0 millionas of December 31, 2018. There were no loan proceeds held by servicer as of March 31, 2019.

Note 6 – Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	March 31, 2019		December 31, 2018
Interest receivable	$	36,085	$	33,399
Other	455		321
Total	$	36,540	$	33,720

Note 7 – Secured Debt Arrangements, Net

At March 31, 2019 and December 31, 2018, our borrowings had the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	March 31, 2019 (2)						December 31, 2018 (2)
	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)
JPMorgan Facility (USD)	$	1,305,435	$	873,771		June 2021	$	1,333,503	$	680,141		June 2021
JPMorgan Facility (GBP)	49,565		49,565			June 2021	48,497		48,497			June 2021
DB Repurchase Facility (USD)	858,919		475,871			March 2021	904,181		419,823			March 2021
DB Repurchase Facility (GBP)	141,081		141,081			March 2021	150,819		150,819			March 2021
Goldman Facility	500,000		233,312			November 2021	300,000		210,072			November 2020
CS Facility (USD)	188,037		188,037			September 2019	187,117		187,117			June 2019
CS Facility (GBP)	148,219		148,219			September 2019	151,773		151,773			June 2019
HSBC Facility (GBP)	49,911		49,911			December 2019	48,835		48,835			December 2019
Sub-total	3,241,167		2,159,767				3,124,725		1,897,077
less: deferred financing costs	N/A		(17,828		)		N/A		(17,555		)
Total / Weighted-Average	$	3,241,167	$	2,141,939			$	3,124,725	$	1,879,522

———————

(1) Maturity date assumes extensions at our option are exercised.

(2) Weighted-average rates as of March 31, 2019 and December 31, 2018 were USD L + 2.19% / GBP L + 2.30% and USD L + 2.17% / GBP L + 2.28%, respectively.

JPMorgan Facility

In May 2017, through two indirect wholly-owned subsidiaries, we entered into a Fifth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association (as amended, the "JPMorgan Facility"). The JPMorgan Facility provides for maximum total borrowing capacity of $1.4 billion, comprised of a $1.25 billion repurchase facility and a $105.0 million asset specific financing and enables us to elect to receive advances in either U.S. dollars, British pounds ("GBP"), or Euros ("EUR"). The repurchase facility matures in June 2020, plus a one-year extension available at our option, subject to certain conditions. The asset specific financing matures in May 2019. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under the JPMorgan Facility.

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As of March 31, 2019, we had $923.3 million (including £38.0 million assuming conversion into U.S. dollars) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Repurchase Facility

In April 2018, through an indirect wholly-owned subsidiary, we entered into a Second Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch and Deutsche Bank AG, London Branch (as amended, the "DB Repurchase Facility"), which was upsized in September 2018, and provides for advances of up to $1.0 billion for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in either U.S. dollars, British pounds, or Euros. The repurchase facility matures in March 2020, plus a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $617.0 million (including £108.2 million assuming conversion into U.S. dollars) of borrowings outstanding under the DB Repurchase Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA (the "Goldman Facility"), which was upsized in March 2019 from $300.0 million to $500.0 million and matures in November 2019, plus twoone-year extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of the seller under the Goldman Facility.

As of March 31, 2019, we had $233.3 million of borrowings outstanding under the Goldman Facility.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility - USD"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - USD matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $188.0 million of borrowings outstanding under the CS Facility - USD secured by certain of our commercial mortgage loans.

CS Facility - GBP

In June 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility - GBP"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - GBP matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $148.2 million (£113.7 million assuming conversion into U.S. dollars) of borrowings outstanding under the CS Facility - GBP secured by one of our commercial mortgage loans.

HSBC Facility

In September 2018, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc (the "HSBC Facility"), which provides for a single asset financing. The facility matures in December 2019 and unless terminated by either party, automatically extends for further periods prior to maturity. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $49.9 million (£38.3 million assuming conversion into U.S. dollars) of borrowings outstanding under the HSBC Facility secured by one of our commercial mortgage loans.

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At March 31, 2019, our borrowings had the following remaining maturities ($ in thousands):

	Less than 1 year (1)		1 to 3 years (1)		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	159,854	$	763,482	$	—	$	—	$	923,336
DB Repurchase Facility	109,142		507,810		—		—		616,952
Goldman Facility	—		233,312		—		—		233,312
CS Facility - USD	188,037		—		—		—		188,037
CS Facility - GBP	148,219		—		—		—		148,219
HSBC Facility	49,911		—		—		—		49,911
Total	$	655,163	$	1,504,604	$	—	$	—	$	2,159,767

———————

(1)Assumes underlying assets are financed through the fully extended maturity date of the facility.

The table below summarizes the outstanding balances at March 31, 2019, as well as the maximum and average month-end balances for the three months endedMarch 31, 2019 for our borrowings under secured debt arrangements ($ in thousands).

	As of March 31, 2019				For the three months ended March 31, 2019
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	923,336	$	1,612,510	$	929,496	$	925,679
DB Repurchase Facility	616,952		1,013,662		672,477		636,283
Goldman Facility	233,312		517,122		259,167		250,286
CS Facility - USD	188,037		254,090		188,037		187,424
CS Facility - GBP	148,219		211,468		150,811		145,814
HSBC Facility	49,911		71,141		50,784		50,296
Total	$	2,159,767	$	3,679,993

We were in compliance with the covenants under each of our secured debt arrangements at March 31, 2019 and December 31, 2018.

Note 8 – Convertible Senior Notes, Net

In two separate offerings during 2014, we issued an aggregate principal amount of $254.8 million of 5.50% Convertible Senior Notes due 2019 (the "2019 Notes"), for which we received $248.6 million, after deducting the underwriting discount and offering expenses. The 2019 Notes were exchanged or converted for shares of our common stock and cash as follows:

(i) On August 2, 2018, we entered into privately negotiated exchange agreements with a limited number of holders of the 2019 Notes pursuant to which we exchanged $206.2 million of the 2019 Notes for an aggregate of (a) 10,020,328 newly issued shares of our common stock, and (b) $39.3 million in cash. We recorded $166.0 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions,

(ii) Certain holders elected to convert $47.9 million of the 2019 Notes, which were settled for an aggregate of (a) 2,775,509 newly issued shares of our common stock, and (b) $0.2 million in cash. We recorded $13.9 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions. These conversions occurred from August 2018 through maturity.

The remaining $0.7 million in principal amount of the 2019 Notes were repaid at maturity on March 15, 2019.

During the year ended December 31, 2018, we recorded a loss on early extinguishment of debt of $2.6 million, in connection with the exchanges and conversions of the 2019 Notes. This includes fees and accelerated amortization of

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capitalized costs. There was no such loss related to the 2019 Notes during the three months ended March 31, 2019.

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022 (the "2022 Notes"), for which we received $337.5 million, after deducting the underwriting discount and offering expenses.At March 31, 2019, the 2022 Notes had a carrying value of $335.9 million and an unamortized discount of $9.1 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023 ("2023 Notes," and together with the 2019 Notes and 2022 Notes, the "Notes"), for which we received $223.7 million after deducting the underwriting discount and offering expenses. At March 31, 2019, the 2023 Notes had a carrying value of $222.8 million and an unamortized discount of $7.2 million.

The following table summarizes the terms of the Notes ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.226	8/23/2022	3.4
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	4.55
Total	$	575,000

———————

(1) Effective rate includes the effect of the adjustment for the conversion option (See endnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2) We have the option to settle any conversions in cash, shares of common stock or a combination thereof.  The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

In accordance with ASC 470 - Debt, the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) is to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by us at such time. We measured the fair value of the debt components of the Notes as of their issuance date based on effective interest rates.  As a result, we attributed approximately $15.4 million of the proceeds to the equity component of the Notes ($11.0 million to the 2022 Notes and $4.4 million to the 2023 Notes), which represents the excess proceeds received over the fair value of the liability component of the Notes at the date of issuance. The equity component of the Notes has been reflected within additional paid-in capital in the condensed consolidated balance sheet as of March 31, 2019. The resulting debt discount is being amortized over the period during which the Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Notes will increase in subsequent reporting periods through the maturity date as the Notes accrete to their par value over the same period.

The aggregate contractual interest expense was approximately $7.6 million and $7.6 million for the three months endedMarch 31, 2019 and 2018, respectively. With respect to the amortization of the discount on the liability component of the Notes as well as the amortization of deferred financing costs, we reported additional non-cash interest expense of approximately $1.7 million and $1.8 million for the three months endedMarch 31, 2019 and 2018, respectively.

Note 9 – Derivatives, Net

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than U.S. dollars.

We have entered into a series of forward contracts to sell an amount of foreign currency (British pound and Euro) for an agreed upon amount of U.S. dollars at various dates through December 2021. These forward contracts were executed to economically fix the U.S. dollar amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

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The following table summarizes our non-designated foreign exchange ("Fx") forwards as of March 31, 2019:

	March 31, 2019
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	78	259,604	GBP	April 2019- December 2021	1.07

The following table summarizes our non-designated Fx forwards as of December 31, 2018:

	December 31, 2018
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	43	270,161	GBP	January 2019 - November 2020	0.69

We have not designated any of our derivative instruments as hedges as defined in ASC 815 "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on the condensed consolidated statements of operations related to our derivatives for the three months endedMarch 31, 2019 and 2018 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three months ended March 31,
	Location of Gain (Loss) Recognized in Income	2019			2018
Forward currency contracts	Loss on derivative instruments - unrealized	$	(14,985	)	$	(8,859	)
Forward currency contracts	Gain (loss) on derivative instruments - realized	8,265			(2,177		)
Interest rate caps(1)	Gain on derivative instruments - unrealized	—			4
Total		$	(6,720	)	$	(11,032	)

———————

(1) With a notional amount of $33.6 million and $38.9 million at March 31, 2019, and 2018, respectively.

The following table summarizes the gross asset and liability amounts related to our derivatives at March 31, 2019 and December 31, 2018 ($ in thousands).

	March 31, 2019							December 31, 2018
	Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet		Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet
Forward currency contracts	9,852		(1,137		)	8,715		23,753		(53		)	23,700
Total derivative instruments	$	9,852	$	(1,137	)	$	8,715	$	23,753	$	(53	)	$	23,700

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Note 10 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	March 31, 2019		December 31, 2018
Accrued dividends payable	$	69,799	$	69,033
Collateral deposited under derivative agreements	1,820		20,000
Accrued interest payable	13,488		14,208
Accounts payable and other liabilities	6,450		1,505
Total	$	91,557	$	104,746

Note 11 – Related Party Transactions

Management Agreement

In connection with our initial public offering in September 2009, we entered into a management agreement (the "Management Agreement") with the Manager, which describes the services to be provided by the Manager and its compensation for those services. The Manager is responsible for managing our day-to-day operations, subject to the direction and oversight of our board of directors.

Pursuant to the terms of the Management Agreement, the Manager is paid a base management fee equal to 1.5% per annum of our stockholders’ equity (as defined in the Management Agreement), calculated and payable (in cash) quarterly in arrears.

The current term of the Management Agreement was renewed during the period and expires on September 29, 2019 and is automatically renewed for successive one-year terms on each anniversary thereafter. The Management Agreement may be terminated upon expiration of the one-year extension term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to ARI or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Following a meeting by our independent directors in February 2019, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to seek termination of the Management Agreement.

We incurred approximately $9.6 million in base management fees under the Management Agreement for the three months ended March 31, 2019 as compared to approximately $8.1 million for the three months ended March 31, 2018.

In addition to the base management fee, we are also responsible for reimbursing the Manager for certain expenses paid by the Manager on our behalf or for certain services provided by the Manager to us.

For the three months endedMarch 31, 2019 and 2018, we paid expenses totaling $0.7 million and $0.6 million, respectively, related to reimbursements for certain expenses paid by the Manager on our behalf under the Management Agreement. Expenses incurred by the Manager and reimbursed by us are reflected in the respective condensed consolidated statement of operations expense category or the condensed consolidated balance sheet based on the nature of the item.

Included in payable to related party on the condensed consolidated balance sheet at March 31, 2019 and December 31, 2018 are approximately $9.6 million and $9.8 million, respectively, for base management fees incurred but not yet paid under the Management Agreement.

Loans receivable

In June 2017, we increased our outstanding loan commitment through the acquisition of an additional $25.0 million of interests in an existing subordinate loan from a fund managed by an affiliate of the Manager, increasing our total outstanding loan commitment to $100.0 million. Furthermore, in September 2017 we funded an additional $25.0 million to acquire a portion of the same pre-development subordinate loan from a fund managed by an affiliate of the Manager, increasing our total outstanding loan commitment to $125.0 million. In May 2018, we increased our outstanding principal balance through the

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acquisition of an additional $28.2 million interest in the same subordinate loan from a fund managed by an affiliate of the Manager. The pre-development subordinate loan is for the construction of a residential condominium building in New York, New York and is part of a $300.0 million subordinate loan.

In June 2018, we increased our outstanding loan commitment through the acquisition of £4.8 million ($6.4 million assuming conversion into U.S. dollars) pari-passu interest in an existing subordinate loan from a fund managed by an affiliate of the Manager. The subordinate loan is secured by a healthcare portfolio located in the United Kingdom.

Note 12 – Share-Based Payments

On September 23, 2009, our board of directors approved the Apollo Commercial Real Estate Finance, Inc., 2009 Equity Incentive Plan (as amended from time to time, the "LTIP"). The LTIP provides for grants of restricted common stock, restricted stock units ("RSUs") and other equity-based awards up to an aggregate of 7.5% of the issued and outstanding shares of our common stock (on a fully diluted basis). The LTIP is administered by the compensation committee of our board of directors (the "Compensation Committee") and all grants under the LTIP must be approved by the Compensation Committee.

We recognized stock-based compensation expense of $3.9 million and $3.3 million for the three months endedMarch 31, 2019 and 2018, respectively, related to restricted stock and RSU vesting. We adopted ASU 2018-07 on January 1, 2019 and the stock-based compensation expense for grants before the adoption of ASU 2018-07 is based on the closing price of our common stock of $16.66 on December 31, 2018, which was the last business day before we adopted ASU 2018-07. Refer to "Note 2 - Summary of Significant Accounting Policies" for further discussion on our adoption of ASU 2018-07.

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the three months endedMarch 31, 2019:

	Type	Restricted Stock		RSUs		Grant Date Fair Value ($ in thousands)
Outstanding at December 31, 2018		65,697		1,852,957
	Vested	(1,419	)	—		N/A
	Forfeiture	—		(4,174	)	N/A
Outstanding at March 31, 2019		64,278		1,848,783

Below is a summary of restricted stock and RSU vesting dates as of March 31, 2019: 

Vesting Year	Restricted Stock	RSU	Total Awards
2019	40,671	887,222	927,893
2020	14,251	626,738	640,989
2021	9,356	334,823	344,179
Total	64,278	1,848,783	1,913,061

At March 31, 2019, we had unrecognized compensation expense of approximately $0.6 million and $27.1 million, respectively, related to the vesting of restricted stock awards and RSUs noted in the table above.

RSU Deliveries

During the three months endedMarch 31, 2019 and 2018, we delivered 433,426 and 354,996 shares of common stock for 730,717 and 603,677 vested RSUs, respectively. We allow RSU participants to settle their tax liabilities with a reduction of their share delivery from the originally granted and vested RSUs. The amount, when agreed to by the participant, results in a cash payment to the Manager related to this tax liability and a corresponding adjustment to additional paid in capital on the condensed consolidated statement of changes in stockholders' equity. The adjustment was $5.0 million and $4.7 million for the three months endedMarch 31, 2019 and 2018, respectively. The adjustment is a reduction of capital related to our equity incentive plan and is presented net of increases of capital related to our equity incentive plan in the condensed consolidated statement of changes in stockholders' equity.

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Note 13 – Stockholders’ Equity

Our authorized capital stock consists of 450,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of March 31, 2019, 136,254,352 shares of common stock were issued and outstanding, 6,770,393 shares of 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock") were issued and outstanding and $6,900,000 shares of 8.00% Series C Cumulative Redeemable Perpetual Preferred Stock ("Series C Preferred Stock") were issued and outstanding.

Dividends. During 2019, we declared the following dividends:

	Three months ended
Dividend declared per share of:	March 31, 2019	March 31, 2018
Common Stock	$0.46	$0.46
Series B Preferred Stock	0.50	0.50
Series C Preferred Stock	0.50	0.50

Common Stock Offerings. During the first quarter of 2018, we completed a follow-on public offering of 15,525,000 shares of our common stock, at a price of $17.77 per share. The aggregate net proceeds from the offering, including proceeds from the sale of the additional shares, were $275.9 million after deducting offering expenses.

During the first quarter of 2019, we issued 1,967,361 shares of our common stock, at a per share conversion price of $17.17, related to conversions of the 2019 Notes, the remainder of which matured on March 15, 2019. We recorded a $33.8 million increase in additional paid in capital in the condensed consolidated statement of changes in stockholders' equity. Refer to "Note 8 - Convertible Senior Notes, Net" for a further discussion on the conversions of the 2019 Notes.

Note 14 – Commitments and Contingencies

Legal Proceedings. From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. On June 28, 2018, AmBase Corporation, 111 West 57th Street Manager Funding LLC and 111 West 57th Investment LLC commenced an action captioned AmBase Corporation et al v. ACREFI Mortgage Lending, LLC et al (No. 653251/2018) in New York Supreme Court.  The complaint names as defendants (i) ACREFI Mortgage Lending, LLC, a subsidiary of the Company, (ii) the Company, and (iii) certain funds managed by Apollo, who are co-lenders on a mezzanine loan against the development of a residential condominium building in Manhattan, New York. The plaintiffs allege that the defendants tortiously interfered with the contractual equity put right in the plaintiffs’ joint venture agreement with the developers of the project, and that the defendants aided and abetted breaches of fiduciary duty by the developers of the project.  The plaintiffs allege the loss of a $70.0 million investment as part of total damages of $700.0 million, which includes punitive damages. The defendants moved to dismiss the complaint on August 17, 2018, and the motion was fully briefed in October 2018. Oral argument took place on March 12, 2019, and the court’s decision is pending. We believe the claims are without merit and plan to vigorously defend the case. We do not believe this will have a material adverse effect on our condensed consolidated financial statements.

Loan Commitments. As described in "Note 4 - Commercial Mortgage and Subordinate Loans, Net," at March 31, 2019, we had $1,039.1 million of unfunded commitments related to our commercial mortgage and subordinate loan portfolios.

Note 15 – Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on the condensed consolidated balance sheet at March 31, 2019 and December 31, 2018 ($ in thousands):

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	March 31, 2019						December 31, 2018
	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Cash and cash equivalents	$	109,343		$	109,343		$	109,806		$	109,806
Commercial first mortgage loans, net	4,003,089			4,025,760			3,878,981			3,894,947
Subordinate loans, net	1,183,910			1,187,128			1,048,612			1,047,854
Secured debt arrangements	(2,159,767		)	(2,159,767		)	(1,897,077		)	(1,897,077		)
2019 Notes	—			—			(34,278		)	(35,276		)
2022 Notes	(335,894		)	(337,762		)	(335,291		)	(326,025		)
2023 Notes	(222,770		)	(225,770		)	(222,431		)	(221,964		)

To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, are used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. Estimates of fair value for cash and convertible senior notes, net are measured using observable Level I inputs as defined in "Note 3 - Fair Value Disclosure." Estimates of fair value for all other financial instruments in the table above are measured using significant estimates, or unobservable Level III inputs as defined in "Note 3 - Fair Value Disclosure."

Note 16 – Net Income per Share

ASC 260 "Earnings per share" requires the use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock.

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The table below presents the computation of basic and diluted net income per share of common stock for the three months endedMarch 31, 2019 and 2018 ($ in thousands except per share data):

	For the three months ended March 31,
	2019			2018
Basic Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Less: Dividends on participating securities	(851		)	(751		)
Basic Earnings	$	60,072		$	41,847
Diluted Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Add: Interest expense on Notes	9,262			N/A
Diluted Earnings	$	70,185		$	42,598
Number of Shares:
Basic weighted-average shares of common stock outstanding	134,607,107			110,211,853
Diluted weighted-average shares of common stock outstanding	164,683,086			111,871,429
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45		$	0.38
Diluted	$	0.43		$	0.38

Prior to the three months ended September 30, 2018, we asserted our intent and ability to settle the principal amount of the Notes in cash and, as a result, the Notes did not have any impact on our diluted earnings per share. As of September 30, 2018, we no longer asserted our intent to fully settle the principal amount of the Notes in cash upon conversion. Accordingly, the dilutive effect to earnings per share for the current year periods is determined using the "if-converted" method whereby interest expense on the outstanding Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three months endedMarch 31, 2019, 30,093,312 weighted-average potentially issuable shares from the Notes were included in the dilutive earnings per share denominator. Refer to "Note 8 - Convertible Senior Notes, Net" for further discussion.

For the three months endedMarch 31, 2019 and 2018, 1,849,564 and 1,659,576 weighted-average unvested RSUs, respectively, were excluded from the calculation of diluted net income per share because the effect was anti-dilutive.

Note 17 – Subsequent Events

Investment activity. Subsequent to the quarter ended March 31, 2019, we committed capital of $75.6 million (£58.0 million) to a first mortgage loan.

In addition, we funded approximately $41.3 million for loans closed prior to the quarter.

Loan Repayments. Subsequent to the end of the quarter, we received approximately $13.1 million from loan repayments.

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

FORWARD-LOOKING INFORMATION

We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of

1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in our industry, interest rates, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended; the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities; the availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; our present and potential future competition; and unexpected costs or unexpected liabilities, including those related to litigation.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2018. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a leading global alternative investment manager with a contrarian and value-oriented investment approach in private equity, credit and real estate with assets under management of approximately $280.3 billion as of December 31, 2018.

The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo’s global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

Market Overview

Based on the current market dynamics, including significant upcoming commercial real estate debt maturities, we believe there remains compelling opportunities for us to invest capital in our target assets at attractive risk adjusted returns. We continue to focus on underlying real estate value, and transactions that benefit from our ability to execute complex and sophisticated transactions.

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We believe the challenges faced by conduit lenders and the general uncertainty around value and pricing could create attractive risk adjusted investment opportunities for us. As a result, we expect to continue to see opportunities to originate first mortgage and subordinate financings in transactions which benefit from our ability to source, structure and execute complex transactions.

Critical Accounting Policies

A summary of our critical accounting policies is set forth in our Annual Report on Form 10-K for the year ended December 31, 2018 under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Use of Estimates." There have been no material changes to our critical accounting policies described in our Annual Report on Form 10-K filed with the SEC on February 13, 2019.

Results of Operations

All non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the prevailing exchange rate on the dates that they were recorded.

Loan Portfolio Overview

The following table sets forth certain information regarding our commercial real estate debt portfolio as of March 31, 2019 ($ in thousands):

Description	Amortized Cost		Weighted-Average Coupon (1)		Weighted Average All-in Yield (1)(2)		Secured Debt (3)		Cost of Funds		Equity at cost(4)
Commercial mortgage loans, net	$	4,003,089	7.0	%	7.8	%	$	2,159,767	4.1	%	$	1,843,322
Subordinate loans, net	1,183,910		12.9	%	14.3	%	—		—		1,183,910
Total/Weighted-Average	$	5,186,999	8.4	%	9.3	%	$	2,159,767	4.1	%	$	3,027,232

———————

(1) Weighted-Average Coupon and Weighted-Average All-in Yield are based on the applicable benchmark rates as of March 31, 2019 on the floating rate loans.

(2) Weighted-Average All-in Yield includes the amortization of deferred origination fees, loan origination costs and accrual of both extension and exit fees.

(3) Gross of deferred financing costs of $17.8 million.

(4) Represents loan portfolio at amortized cost less secured debt outstanding.

The following table provides details of our commercial mortgage and subordinate loan portfolios, on a loan-by-loan basis, as of March 31, 2019 ($ in millions):

Commercial Mortgage Loan Portfolio
Property Type	Risk Rating	Origination Date	Amortized Cost	Unfunded Commitment	Construction Loan(4)	Fully-extended Maturity	Location
Urban Predevelopment	3	01/2016	$213	—		07/2019	Miami, FL
Residential-for-sale: inventory	3	03/2018	211	—		03/2021	London, UK
Hotel	3	09/2016	210	—		01/2022	Manhattan, NY
Industrial	3	01/2019	195	7		02/2024	Brooklyn, NY
Urban Predevelopment	3	04/2017	182	—		09/2019	London, UK
Office	3	10/2018	178	21		10/2021	Manhattan, NY
Office	3	11/2017	169	—		01/2023	Chicago, IL
Office	3	11/2017	157	91	Y	12/2022	Manhattan, NY
Retail Center (3)	5	11/2014	156	—		09/2020	Cincinnati, OH
Hotel	3	04/2018	151	2		04/2023	Honolulu, HI
Urban Predevelopment	3	03/2017	144	20		12/2020	Brooklyn, NY
Hotel (1)	3	09/2015	140	—		06/2023	Manhattan, NY
Hotel	3	05/2018	139	—		06/2023	Miami, FL

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Hotel	3	03/2017	105	—		03/2022	Atlanta, GA
Office	3	10/2018	101	84	Y	10/2023	Manhattan, NY
Hotel	3	11/2018	99	—		12/2023	Vail, CO
Office	3	01/2018	94	94	Y	01/2022	Renton, WA
Hotel	3	12/2017	90	—		12/2022	Manhattan, NY
Hotel	3	07/2018	86	—		08/2021	Detroit, MI
Residential-for-sale: construction	3	05/2018	78	5	Y	06/2020	Brooklyn, NY
Office	3	12/2017	76	57		03/2022	London, UK
Multifamily	3	04/2014	76	—		07/2023	Various
Residential-for-sale: inventory	3	06/2018	76	—		06/2020	Manhattan, NY
Urban Predevelopment	3	12/2016	73	—		12/2020	Los Angeles, CA
Multifamily	3	06/2018	71	—		06/2020	London, UK
Multifamily	3	10/2017	67	—		11/2021	Brooklyn, NY
Hotel	3	04/2018	63	—		05/2023	Scottsdale, AZ
Office	3	03/2018	63	25		04/2023	Chicago, IL
Residential-for-sale: construction	3	12/2018	60	92	Y	12/2023	Manhattan, NY
Hotel	2	01/2017	60	—		01/2022	Miami, FL
Multifamily	3	11/2014	57	—		11/2021	Various
Multifamily	3	05/2016	50	2		06/2019	Brooklyn, NY
Residential-for-sale: inventory	3	05/2018	50	—		04/2021	Manhattan, NY
Multifamily	3	10/2017	43	—		10/2022	London, UK
Hotel	3	12/2015	42	2		12/2020	St. Thomas, USVI
Multifamily	3	12/2017	42	—		01/2020	Manhattan, NY
Hotel	3	02/2018	38	—		03/2023	Pittsburgh, PA
Residential-for-sale: construction	3	01/2018	33	47	Y	01/2023	Manhattan, NY
Multifamily (3)	5	11/2014	32	—		11/2019	Williston, ND
Residential-for-sale: inventory (3)	5	02/2014	24	—		04/2020	Bethesda, MD
Mixed Use	3	07/2017	14	—		08/2019	Manhattan, NY
Residential-for-sale: construction	3	12/2018	(1)	103	Y	01/2024	Hallandale Beach, FL
Residential-for-sale: construction	2	03/2018	(1)	115	Y	03/2023	San Francisco, CA
Office	3	08/2018	(2)	201	Y	12/2022	London, UK
Sub-total / Weighted Average Commercial mortgage loans	3.1		$4,003	$968	13%	2.7 Years

Subordinate Loan Portfolio
Property Type	Risk Rating	Origination Date	Amortized Cost	Unfunded Commitment	Construction Loan(4)	Fully-extended Maturity	Location
Residential-for-sale: construction (2)	3	06/2015	$189	—	Y	02/2021	Manhattan, NY
Office	3	01/2019	99	—		12/2025	Manhattan, NY
Healthcare	3	01/2019	95	—		01/2024	Various
Residential-for-sale: construction	3	12/2017	86	24	Y	06/2022	Manhattan, NY
Residential-for-sale: construction	3	01/2016	83	—	Y	02/2021	Manhattan, NY
Other	3	09/2017	72	—		09/2022	Various
Multifamily	3	10/2015	63	—		07/2019	Manhattan, NY
Residential-for-sale: construction	3	12/2017	61	—	Y	04/2023	Los Angeles, CA
Healthcare	3	01/2015	49	—		12/2019	Various

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Residential-for-sale: construction (2)	3	11/2017	43	—	Y	02/2021	Manhattan, NY
Mixed Use	3	01/2017	42	—		02/2027	Cleveland, OH
Mixed Use	3	02/2019	38	—	Y	12/2022	London, UK
Residential-for-sale: inventory	3	10/2016	36	—		10/2020	Manhattan, NY
Industrial	3	05/2013	32	—		05/2023	Various
Residential-for-sale: inventory	3	06/2017	25	—		12/2020	Manhattan, NY
Hotel	3	06/2015	25	—		07/2025	Phoenix, AZ
Multifamily	3	05/2018	20	—		05/2028	Cleveland, OH
Hotel	3	06/2015	20	—		12/2022	Washington, DC
Hotel	3	06/2018	20	—		06/2023	Las Vegas, NV
Hotel	3	02/2015	20	—		01/2020	Burbank, CA
Hotel (1)	3	09/2015	15	9		06/2023	Manhattan, NY
Office	3	07/2013	14	—		07/2022	Manhattan, NY
Mixed Use	3	12/2018	14	38	Y	12/2023	Brooklyn, NY
Hotel	3	05/2017	8	—		06/2027	Anaheim, CA
Office	3	08/2017	8	—		09/2024	Troy, MI
Mixed Use	3	07/2012	7	—		08/2022	Chapel Hill, NC
Sub total / Weighted-Average- Subordinate loans	3.0		$1,184	$71	43%	3.4 Years
Total / Weighted-Average Loan Portfolio	3.1		$5,187	$1,039	20%	2.9 Years

———————

(1) Both loans are secured by the same property.

(2) Both loans are secured by the same property.

(3) Amortized cost for these loans is net of the recorded provisions for loan losses and impairments.

(4) Weighted-average construction loan % is based on the amortized cost of the loans.

Our average asset and debt balances for the three months ended March 31, 2019, were ($ in thousands):

	Average month-end balances for the three months ended March 31, 2019
Description	Assets		Related debt
Commercial mortgage loans, net	$	4,038,172	$	2,195,782
Subordinate loans, net	1,169,429		—

Investment Activity

During the three months endedMarch 31, 2019, we committed $448.7 million of capital to loans ($441.8 million of which was funded during the three months endedMarch 31, 2019). In addition, during the three months endedMarch 31, 2019, we funded $110.3 million for loans closed prior to 2019, and received $322.4 million in repayments.

Net Income Available to Common Stockholders

For the three months ended March 31, 2019 and 2018, respectively, our net income available to common stockholders was $60.9 million, or $0.43 per diluted share of common stock, and $42.6 million, or $0.38 per diluted share of common stock.

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Operating Results

The following table sets forth information regarding our consolidated results of operations and certain key operating metrics ($ in thousands):

	Three months ended March 31,						2019 vs 2018
	2019			2018
Net interest income:
Interest income from commercial mortgage loans	$	78,286		$	52,114		$	26,172
Interest income from subordinate loans	40,839			33,853			6,986
Interest expense	(36,295		)	(22,740		)	(13,555		)
Net interest income	82,830			63,227			19,603
Operating expenses:
General and administrative expenses	(6,151		)	(4,998		)	(1,153		)
Management fees to related party	(9,613		)	(8,092		)	(1,521		)
Total operating expenses	(15,764		)	(13,090		)	(2,674		)
Other income	518			203			315
Foreign currency gain	6,894			10,125			(3,231		)
Loss on derivative instruments	(6,720		)	(11,032		)	4,312
Net income	$	67,758		$	49,433		$	18,325

Net Interest Income

Net interest income increased by $19.6 million during the three months endedMarch 31, 2019 as compared to the same period in 2018. The increase was primarily due to (i) a net increase in the principal balance of our loan portfolio by $1.1 billion, and (ii) a 0.79%increase in average one-month LIBOR for the three months endedMarch 31, 2019 compared to March 31, 2018. This was offset by (i) an increase in interest expense due to an increase in our net debt balance of $907.9 million as of March 31, 2019 compared to March 31, 2018, and (ii) the increase in average one-month LIBOR discussed above.

We recognized payment-in-kind ("PIK") interest of $14.5 million and $10.6 million for the three months endedMarch 31, 2019 and 2018, respectively.

We recognized pre-payment penalties and accelerated fees of $3.7 million for the three months endedMarch 31, 2019. There were no pre-payment penalties and accelerated fees for the three months ended March 31, 2018.

Operating Expenses

General and administrative expenses

General and administrative expenses increased by $1.2 million for the three months endedMarch 31, 2019 compared to the same period in 2018. The increase was primarily driven by an increase of $0.6 million of non-cash restricted stock and RSU amortization related to shares of common stock awarded under LTIP and a $0.6 millionincrease in general operating expenses.

Management fees to related party

Management fee expense increased by $1.5 million during the three months endedMarch 31, 2019 as compared to the same period in 2018. The increase is primarily attributable to an increase in our stockholders’ equity (as defined in the Management Agreement) as a result of the issuance of 2,775,509 shares of our common stock related to exchanges and conversions of the 2019 Notes, which are described in "Note 8 - Convertible Senior Notes, Net" to the accompanying condensed consolidated financial statements, from August 2018 through March 2019.

Management fees and the relationship between us and the Manager under the Management Agreement are discussed further in the accompanying condensed consolidated financial statements, in "Note 11 - Related Party Transactions."

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Foreign currency gain and (loss) on derivative instruments

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than U.S. dollars. We also use interest rate swaps and caps to manage exposure to variable cash flows on portions of our borrowings under secured debt arrangements. Interest rate swap and cap agreements allow us to receive a variable rate cash flow based on LIBOR and pay a fixed rate cash flow, mitigating the impact of this exposure. When foreign currency gain and (loss) on derivative instruments are evaluated on a combined basis, the net impact for the three months endedMarch 31, 2019 and 2018 were $0.2 million and $(0.9) million, respectively.

Dividends

We have declared the following dividends in 2019:

	Three months ended
Dividend declared per share of:	March 31, 2019	March 31, 2018
Common Stock	$0.46	$0.46
Series B Preferred Stock	0.50	0.50
Series C Preferred Stock	0.50	0.50

Subsequent Events

Refer to "Note 17 - Subsequent Events" to the accompanying condensed consolidated financial statements for disclosure regarding significant transactions that occurred subsequent to March 31, 2019.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs. Our cash is used to purchase or originate target assets, repay principal and interest on borrowings, make distributions to stockholders and fund operations. We closely monitor our liquidity position and we believe we have sufficient current liquidity and access to additional liquidity to meet financial obligations for at least the next 12 months.

Debt-to-Common Equity Ratio

The following table presents our debt-to-common equity ratio:

	March 31, 2019	December 31, 2018
Debt to Equity Ratio (1)	1.0x	0.9x

———————

(1) Represents total secured debt arrangements and convertible senior notes, less cash and loan proceeds held by servicer to total stockholders' equity.

Our primary sources of liquidity are as follows:

Cash Generated from Operations

Cash from operations is generally comprised of interest income from our investments, net of any associated financing expense, principal repayments from our investments, net of associated financing repayments, proceeds from the sale of investments, and changes in working capital balances. See "Results of Operations – Investments" above for a summary of interest rates related to our investment portfolio as of March 31, 2019.

Borrowings Under Various Financing Arrangements

JPMorgan Facility

In May 2017, through two indirect wholly-owned subsidiaries, we entered into a Fifth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association. The JPMorgan Facility provides for maximum total borrowing capacity of $1.4 billion, comprised of a $1.25 billion repurchase facility and a $105.0 million asset specific financing

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and enables us to elect to receive advances in either U.S. dollars, British pounds ("GBP"), or Euros ("EUR"). The repurchase facility matures in June 2020, plus a one-year extension available at our option, subject to certain conditions. The asset specific financing matures in May 2019. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under the JPMorgan Facility.

As of March 31, 2019, we had $923.3 million (including £38.0 million assuming conversion into U.S. dollars) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Repurchase Facility

In April 2018, through an indirect wholly-owned subsidiary, we entered into a Second Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch and Deutsche Bank AG, London Branch, which was upsized in September 2018, and provides for advances of up to $1.0 billion for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in either U.S. dollars, British pounds, or Euros. The repurchase facility matures in March 2020, plus a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $617.0 million (including £108.2 million assuming conversion into U.S. dollars) of borrowings outstanding under the DB Repurchase Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA, which was upsized in March 2019 from $300.0 million to $500.0 million and matures in November 2019, plus two one-year extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of the seller under the Goldman Facility.

As of March 31, 2019, we had $233.3 million of borrowings outstanding under the Goldman Facility.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd, which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - USD matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $188.0 million of borrowings outstanding under the CS Facility - USD secured by certain of our commercial mortgage loans.

CS Facility - GBP

In June 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd, which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - GBP matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $148.2 million (£113.7 million assuming conversion into U.S. dollars) of borrowings outstanding under the CS Facility - GBP secured by one of our commercial mortgage loans.

HSBC Facility

In September 2018, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc, which provides for a single asset financing. The facility matures in December 2019 and unless terminated by either party, automatically extends for further periods prior to maturity. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

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As of March 31, 2019, we had $49.9 million (£38.3 million assuming conversion into U.S. dollars) of borrowings outstanding under the HSBC Facility secured by one of our commercial mortgage loans.

Debt Covenants

Each of the guarantees related to our secured debt arrangements contain the following uniform financial covenants (i) tangible net worth must be greater than $1.25 billion plus 75% of the net cash proceeds of any equity issuance after March 31, 2017 (ii) our ratio of total indebtedness to tangible net worth cannot be greater than 3:1; and (iii) our liquidity cannot be less than an amount equal to the greater of 5% of total recourse indebtedness or $30.0 million.

Convertible Senior Notes

In two separate offerings during 2014, we issued an aggregate principal amount of $254.8 million of 5.50% Convertible Senior Notes due 2019, for which we received $248.6 million, after deducting the underwriting discount and offering expenses. The 2019 Notes were exchanged or converted for shares of our common stock and cash as follows:

(i) On August 2, 2018, we entered into privately negotiated exchange agreements with a limited number of holders of the 2019 Notes pursuant to which we exchanged $206.2 million of the 2019 Notes for an aggregate of (a) 10,020,328 newly issued shares of our common stock, and (b) $39.3 million in cash. We recorded $166.0 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions,

(ii) Certain holders elected to convert $47.9 million of the 2019 Notes, which were settled for an aggregate of (a) 2,775,509 newly issued shares of our common stock, and (b) $0.2 million in cash. We recorded $13.9 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions. These conversions occurred from August 2018 through maturity.

The remaining $0.7 million in principal amount of the 2019 Notes were repaid at maturity on March 15, 2019.

During the year ended December 31, 2018, we recorded a loss on early extinguishment of debt of $2.6 million, in connection with the exchanges and conversions of the 2019 Notes. This includes fees and accelerated amortization of capitalized costs. There was no such loss related to the 2019 Notes during the three months ended March 31, 2019.

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022, for which we received $337.5 million, after deducting the underwriting discount and offering expenses.At March 31, 2019, the 2022 Notes had a carrying value of $335.9 million and an unamortized discount of $9.1 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023, for which we received $223.7 million after deducting the underwriting discount and offering expenses. At March 31, 2019, the 2023 Notes had a carrying value of $222.8 million and an unamortized discount of $7.2 million.

Other Potential Sources of Financing

Our primary sources of cash currently consist of cash available, which was $109.3 million as of March 31, 2019, principal and interest payments we receive on our portfolio of assets, and available borrowings under our secured debt arrangements. We expect our other sources of cash to consist of cash generated from operations and prepayments of principal received on our portfolio of assets. Such prepayments are difficult to estimate in advance. Depending on market conditions, we may utilize additional borrowings as a source of cash, which may also include additional secured debt arrangements as well as other borrowings such as credit facilities, or conduct additional public and private debt and equity offerings.

We maintain policies relating to our borrowings and use of leverage. See "Leverage Policies" below. In the future, we may seek to raise further equity or debt capital or engage in other forms of borrowings in order to fund future investments or to refinance expiring indebtedness.

We generally intend to hold our target assets as long-term investments, although we may sell certain of our investments in order to manage our interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions.

To maintain our qualification as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. These distribution requirements limit our ability to retain earnings and replenish or increase capital for operations.

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Leverage Policies

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements, in the future we may access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are limited by certain financial covenants under our secured debt arrangements. Consistent with our strategy of keeping leverage within a prudent range, we expect to, depending upon the composition of our portfolio, maintain our debt-to-common equity ratio at less than 2.0x.

Investment Guidelines

Our current investment guidelines, approved by our board of directors, are comprised of the following:

• no investment will be made that would cause us to fail to qualify as a REIT for U.S. federal income tax purposes;

• no investment will be made that would cause us to register as an investment company under the 1940 Act;

• investments will be predominantly in our target assets;

• no more than 20% of our cash equity (on a consolidated basis) will be invested in any single investment at the time of the investment; and

• until appropriate investments can be identified, the Manager may invest the proceeds of any offering in interest bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to qualify as a REIT.

The board of directors must approve any change in these investment guidelines.

Contractual Obligations and Commitments

Our contractual obligations including expected interest payments as of March 31, 2019 are summarized as follows ($ in thousands):

	Less than 1 year (3)		1 to 3 years (3)		3 to 5 years (3)		More than 5 years (3)		Total
Secured debt arrangements (1)	$	743,438	$	1,709,875	$	—	$	—	$	2,453,313
Convertible senior notes, net	28,750		57,500		601,190		—		687,440
Unfunded loan commitments (2)	505,512		533,578		—		—		1,039,090
Total	$	1,277,700	$	2,300,953	$	601,190	$	—	$	4,179,843

———————

(1) Based on the applicable benchmark rates as of March 31, 2019 on the floating rate debt for interest payments due.

(2) Based on our expected funding schedule, which is based upon the Manager’s estimates based upon the best information available to the Manager at the time. There is no assurance that the payments will occur in accordance with these estimates or at all, which could affect our operating results.

(3) Assumes underlying assets are financed through the fully extended maturity date of the facility.

Loan Commitments. As of March 31, 2019, we had $1.0 billion of unfunded loan commitments, comprised of $968.0 million related to our commercial mortgage loan portfolio, and $71.1 million related to our subordinate loan portfolio.

Management Agreement. On September 23, 2009, we entered into the Management Agreement with the Manager pursuant to which the Manager is entitled to receive a management fee and the reimbursement of certain expenses. The table above does not include amounts due under the Management Agreement as those obligations do not have fixed and determinable payments. Pursuant to the Management Agreement, the Manager is entitled to a base management fee calculated and payable quarterly in arrears in an amount equal to 1.5% of our stockholders’ equity (as defined in the Management Agreement), per annum. The Manager will use the proceeds from its management fee in part to pay compensation to its officers and personnel. We do not reimburse the Manager or its affiliates for the salaries and other compensation of their personnel, except for the allocable share of the compensation of (1) our Chief Financial Officer based on the percentage of time spent on our affairs and (2) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of the Manager or its affiliates who spend all or a portion of their time managing our affairs based on the percentage of time devoted by such personnel to our affairs. We are also required to reimburse the Manager for operating expenses related to us incurred by the Manager, including expenses relating to legal, accounting, due diligence and other services. Expense reimbursements to the Manager are made in cash on a monthly basis following the end of each month. Our reimbursement obligation is not subject to any dollar limitation.

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The current term of the Management Agreement currently runs through September 29, 2019. Absent certain action by the independent directors of our board of directors, as described below, the Management Agreement will automatically renew on each anniversary for a one-year term. The Management Agreement may be terminated upon expiration of the one-year term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to us or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Amounts payable under the Management Agreement are not fixed and determinable. Following a meeting by our independent directors in February 2018, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to terminate the Management Agreement.

Forward Currency Contracts. We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than U.S. dollars. We have entered into a series of forward contracts to sell an amount of foreign currency (British pounds) for an agreed upon amount of U.S. dollars at various dates through December 2021. These forward contracts were executed to economically fix the U.S. dollar amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. Refer to "Note 9 - Derivatives, Net" to the accompanying condensed consolidated financial statements for details regarding our forward contracts.

Off-balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities or entered into any commitment to provide additional funding to any such entities.

Dividends

We intend to continue to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Any distributions we make are at the discretion of our board of directors and depend upon, among other things, our actual results of operations. These results and our ability to pay distributions are affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures. If our cash available for distribution is less than our net taxable income, we could be required to sell assets or borrow funds to make cash distributions or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.

As of March 31, 2019, we had 6,770,393 shares of Series B Preferred Stock outstanding, which entitles holders to receive dividends that are payable quarterly in arrears. The Series B Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: (i) from, and including, the original date of issuance of the Series B Preferred Stock to, but excluding, September 20, 2020, at an initial rate of 8.00% per annum of the $25.00 per share liquidation preference; and (ii) from, and including, September 20, 2020, at the rate per annum equal to the greater of (a) 8.00% and (b) a floating rate equal to the 3-month LIBOR rate as calculated on each applicable date of determination plus 6.46% of the $25.00 liquidation preference. Except under certain limited circumstances, the Series B Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. On or after September 21, 2020, we may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid distribution through the date of the redemption.

As of March 31, 2019, we had 6,900,000 shares of Series C Preferred Stock outstanding, which entitles holders to receive dividends that are payable quarterly in arrears. The Series C Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the last day of each January, April, July, and October, at the rate of 8.00% per annum of the $25.00 per share liquidation preference (equivalent to $2.00 per annum per share). Except under certain limited circumstances, the Series C Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. We may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid distribution through the date of the redemption.

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Non-GAAP Financial Measures

Operating Earnings

For the three months endedMarch 31, 2019 and 2018, our Operating Earnings were $68.4 million, or $0.50 per share, and $47.9 million, or $0.43 per share, respectively. Operating Earnings is a non-GAAP financial measure that we define as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, (v) the non-cash amortization expense related to the reclassification of a portion of the Notes to stockholders’ equity in accordance with GAAP, and (vi) provision for loan losses and impairments. Beginning with the quarter ended September 30, 2016, we slightly modified our definition of Operating Earnings to include realized gains (losses) on currency swaps related to interest income on investments denominated in a currency other than U.S. dollars. In addition, beginning with the quarter ended December 31, 2018, we further modified our definition of Operating Earnings to include the impact from forward points on our foreign currency hedges, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income. In order to conform to the 2018 year-end presentation, which incorporates this modification, prior-year Operating Earnings results presented below have been modified accordingly. Operating Earnings may also be adjusted to exclude certain other non-cash items, as determined by the Manager and approved by a majority of our independent directors.

The weighted-average diluted shares outstanding used for Operating Earnings per weighted-average diluted share has been adjusted from weighted-average diluted shares under GAAP to exclude shares issued from a potential conversion of the Notes. Consistent with the treatment of other unrealized adjustments to Operating Earnings, these potentially issuable shares are excluded until a conversion occurs, which we believe is a useful presentation for investors. We believe that excluding shares issued in connection with a potential conversion of the Notes from our computation of Operating Earnings per weighted-average diluted share is useful to investors for various reasons, including the following: (i) conversion of Notes to shares requires both the holder of a Note to elect to convert the Note and for us to elect to settle the conversion in the form of shares; (ii) future conversion decisions by Note holders will be based on our stock price in the future, which is presently not determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Notes from the computation of Operating Earnings per weighted-average diluted share is consistent with how we treat other unrealized items in our computation of Operating Earnings per weighted-average diluted share; and (iv) we believe that when evaluating our operating performance, investors and potential investors consider our Operating Earnings relative to our actual distributions, which are based on shares outstanding and not shares that might be issued in the future. The table below summarizes the reconciliation from weighted-average diluted shares under GAAP to the weighted-average diluted shares used for Operating Earnings ($ in thousands, except Price):

	Three months ended March 31, 2019 (1)
Weighted-Averages	Face		Price	Shares
Weighted-average diluted shares - GAAP				164,683,086
2019 Notes (2)	$	26,487	$17.17	(1,542,708	)
2022 Notes	$	345,000	$19.91	(17,327,970	)
2023 Notes	$	230,000	$20.53	(11,205,301	)
Unvested RSUs	—		—	1,849,564
Weighted-average diluted shares - Operating Earnings				136,456,671

———————

(1) This reconciliation only applies to the three months ended March 31, 2019 because in the reporting period for the three months ended March 31, 2018 we used the treasury stock method when determining the potential share dilution from the Notes in the computation of earnings per share.

(2) Face represents the weighted-average balances during the period.

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Computation of Share Count for Operating Earnings
	Three months ended March 31,
	2019	2018
Basic weighted-average shares of common stock outstanding	134,607,107	110,211,853
Weighted-average unvested RSUs	1,849,564	1,659,576
Weighted-average diluted shares - Operating Earnings	136,456,671	111,871,429

In order to evaluate the effective yield of the portfolio, we use Operating Earnings to reflect the net investment income of our portfolio as adjusted to include the net interest expense related to our derivative instruments. Operating Earnings allows us to isolate the net interest expense associated with our swaps in order to monitor and project our full cost of borrowings. We also believe that our investors use Operating Earnings, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers and, as such, we believe that the disclosure of Operating Earnings is useful to our investors. Forward points effectively convert our foreign rate exposure to USD LIBOR, which we believe is a better reflection of our operating results and we believe the inclusion of the resulting gain or loss in Operating Earnings is useful to our investors.

A significant limitation associated with Operating Earnings as a measure of our financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, our presentation of Operating Earnings may not be comparable to similarly-titled measures of other companies, who may use different calculations. As a result, Operating Earnings should not be considered as a substitute for our GAAP net income as a measure of our financial performance or any measure of our liquidity under GAAP.

The table below summarizes the reconciliation from net income available to common stockholders to Operating Earnings ($ in thousands):

	Three months ended March 31,
	2019			2018
Net income available to common stockholders	$	60,923		$	42,598
Adjustments:
Equity-based compensation expense	3,901			3,342
Loss on derivative instruments	6,720			11,032
Foreign currency gain, net	(6,894		)	(10,125		)
Net realized gains relating to interest income on foreign currency hedges, net (1)	418			(237		)
Net realized gains relating to forward points on foreign currency hedges, net	2,431			174
Amortization of the convertible senior notes related to equity reclassification	909			1,140
Total adjustments:	7,485			5,326
Operating Earnings	$	68,408		$	47,924
Diluted Operating Earnings per share of common stock (2)	$	0.50		$	0.43
Weighted-average diluted shares - Operating Earnings	136,456,671			111,871,429

(1) In order to conform to the 2019 presentation of the reconciliation from net income available to common stockholders to Operating Earnings, $0.2 million was reclassified from Foreign currency gain, net for the three months ended March 31, 2018.

(2) For the computation of diluted Operating Earnings per share of common stock, for the three months ended March 31, 2019, $8.4 million of interest expense related to the Notes is not deducted from the numerator and the potentially dilutive shares related to the Notes are excluded from the denominator.

Book Value Per Share

The table below calculates our book value per share ($ in thousands, except per share data):

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	March 31, 2019			December 31, 2018
Stockholders' Equity	$	2,539,824		$	2,509,747
Series B Preferred Stock (Liquidation Preference)	(169,260		)	(169,260		)
Series C Preferred Stock (Liquidation Preference)	(172,500		)	(172,500		)
Common Stockholders' Equity	$	2,198,064		$	2,167,987
Common Stock	136,254,352			133,853,565
Book value per share	$	16.13		$	16.20

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We seek to manage our risks related to the credit quality of our assets, interest rates, liquidity, prepayment speeds and market value, while, at the same time, seeking to provide an opportunity to stockholders to realize attractive risk-adjusted returns through ownership of our capital stock. While risks are inherent in any business enterprise, we seek to quantify and justify risks in light of available returns and to maintain capital levels consistent with the risks we undertake.

Credit Risk

One of our strategic focuses is acquiring assets that we believe to be of high credit quality. We believe this strategy will generally keep our credit losses and financing costs low. However, we are subject to varying degrees of credit risk in connection with our other target assets. We seek to mitigate this risk by seeking to acquire high quality assets, at appropriate prices given anticipated and unanticipated losses, and by deploying a value-driven approach to underwriting and diligence, consistent with the Manager’s historical investment strategy, with a focus on current cash flows and potential risks to cash flow. The Manager seeks to enhance its due diligence and underwriting efforts by accessing the Manager’s knowledge base and industry contacts. Nevertheless, unanticipated credit losses could occur, which could adversely impact our operating results.

Interest Rate Risk

Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We are subject to interest rate risk in connection with our target assets and our related financing obligations.

To the extent consistent with maintaining our REIT qualification, we seek to manage risk exposure to protect our portfolio of financial assets against the effects of major interest rate changes. We generally seek to manage this risk by:

• attempting to structure our financing agreements to have a range of different maturities, terms, amortizations and interest rate adjustment periods;

• using hedging instruments, interest rate swaps and interest rate caps; and

• to the extent available, using securitization financing to better match the maturity of our financing with the duration of our assets.

The following table estimates the hypothetical impact on our net interest income for the twelve-month period following March 31, 2019, assuming an immediate increase or decrease of 50 basis points in the applicable interest rate benchmark by currency ($ in thousands, except per share data):

			50 basis point increase				50 basis point decrease
Currency	Net floating rate assets subject to interest rate sensitivity		Increase to net interest income (1)		Increase to net interest income (per share) (1)		Decrease to net interest income (1)(2)			Decrease to net interest income (per share) (1)(2)
USD	$	2,349,599	$	11,748	$	0.09	$	(10,073	)	$	(0.07	)
GBP	284,758		1,424		0.01		(789		)	(0.01		)
Total:	$	2,634,357	$	13,172	$	0.10	$	(10,862	)	$	(0.08	)

———————

(1) Any such hypothetical impact on interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising or falling interest rate environment. Further, in the event of a change in interest rates of that magnitude, we may take actions to further mitigate our exposure to such a change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure.

(2) Certain of our floating rate loans are subject to a LIBOR floor.

Prepayment Risk

Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on an asset to be less than expected. In certain cases, we adapt to prepayment risk by stating prepayment penalties in loan agreements.

Market Risk

Commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and

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other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. 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 or loans, as the case may be, which could also cause us to suffer losses.

Inflation

Virtually all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors influence our performance far more so than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Our financial statements are prepared in accordance with GAAP and distributions are determined by our board of directors consistent with our obligation to distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains and determined without regard to the dividends paid deduction, on an annual basis in order to maintain our REIT qualification. In each case, our activities and balance sheet are measured with reference to historical cost and/or fair market value without considering inflation.

Currency Risk

Some of our loans and secured debt arrangements are denominated in a foreign currency and subject to risks related to

fluctuations in currency rates. We mitigate this exposure through foreign currency forward contracts, which match the net

principal and interest of our foreign currency loans and secured debt arrangements.

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Item 4. Controls and Procedures.

Our Chief Executive Officer and Chief Financial Officer, based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to ARI that would potentially be subject to disclosure under the Exchange Act, and the rules and regulations promulgated thereunder.

During the period ended March 31, 2019, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within ARI to disclose material information otherwise required to be set forth in our periodic reports.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. On June 28, 2018, AmBase Corporation, 111 West 57th Street Manager Funding LLC and 111 West 57th Investment LLC commenced an action captioned AmBase Corporation et al v. ACREFI Mortgage Lending, LLC et al (No. 653251/2018) in New York Supreme Court.  The complaint names as defendants (i) ACREFI Mortgage Lending, LLC, a subsidiary of the Company, (ii) the Company, and (iii) certain funds managed by Apollo, who are co-lenders on a mezzanine loan against the development of a residential condominium building in Manhattan, New York. The plaintiffs allege that the defendants tortiously interfered with the contractual equity put right in the plaintiffs’ joint venture agreement with the developers of the project, and that the defendants aided and abetted breaches of fiduciary duty by the developers of the project.  The plaintiffs allege the loss of a $70.0 million investment as part of total damages of $700.0 million, which includes punitive damages. The defendants moved to dismiss the complaint on August 17, 2018, and the motion was fully briefed in October 2018. Oral argument took place on March 12, 2019, and the court’s decision is pending. We believe the claims are without merit and plan to vigorously defend the case.

Item 1A. Risk Factors

See our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to our risk factors during the three months endedMarch 31, 2019.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

3.1	Articles of Amendment and Restatement of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533).
3.2	Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on September 23, 2015 (File No.: 001-34452).
3.3	Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.00% Series C Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on September 1, 2016 (File No.: 001-34452).
3.4	By-laws of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.2 of the Registrant’s Form S-4 (Registration No. 333-210632).
4.1	Specimen Stock Certificate of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 4.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533).
4.2	Specimen Stock Certificate of Apollo Commercial Real Estate Finance, Inc.’s 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on September 23, 2015.
4.3	Form of stock certificate evidencing the 8.00% Series C Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-A filed on August 26, 2016 (File No.: 001-34452).
4.4	Indenture, dated as of March 17, 2014, between the Registrant and Wells Fargo Bank, National Association, as Trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on March 21, 2014 (File No.: 001-34452).
4.5	First Supplemental Indenture, dated as of March 17, 2014, between the Registrant and Wells Fargo Bank, National Association, as Trustee (including the form of 5.50% Convertible Senior Note due 2019), incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed on March 21, 2014 (File No.: 001-34452).
4.6	Second Supplemental Indenture, dated as of August 21, 2017, between the Registrant and Wells Fargo Bank, National Association, as Trustee (including the form of 4.75% Convertible Senior Note due 2022), incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed on August 21, 2017 (File No.: 001-34452).
4.7	Third Supplemental Indenture, dated as of October 5, 2018 between the Registrant and Wells Fargo Bank, National Association, as Trustee (including the form of 5.375% Convertible Senior Notes due 2023), incorporated by reference to Exhibit 4.2 of the Registrant's Form 8-K filed on October 5, 2018 (File No.: 001-34452).
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase

39

101.PRE* XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		APOLLO COMMERCIAL REAL ESTATE FINANCE, INC.
April 24, 2019
	By:	/s/ Stuart A. Rothstein
		Stuart A. Rothstein
		President and Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ Jai Agarwal
		Jai Agarwal
		Chief Financial Officer, Treasurer and Secretary
		(Principal Financial Officer and Principal Accounting Officer)

41

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stuart A. Rothstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 24, 2019	By:	/s/ Stuart A. Rothstein
	Name:	Stuart A. Rothstein
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jai Agarwal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 24, 2019	By:	/s/ Jai Agarwal
	Name:	Jai Agarwal
	Title:	Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the President and Chief Executive Officer of Apollo Commercial Real Estate Finance, Inc. (the "Company"), hereby certifies on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the period ended March 31, 2019 (the "Form 10-Q"), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 24, 2019	By:	/s/ Stuart A. Rothstein
	Name:	Stuart A. Rothstein
	Title:	President and Chief Executive Officer

The undersigned, the Chief Financial Officer, Treasurer and Secretary of Apollo Commercial Real Estate Finance, Inc. (the "Company"), hereby certifies on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the period ended March 31, 2019 (the "Form 10-Q"), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 24, 2019	By:	/s/ Jai Agarwal
	Name:	Jai Agarwal
	Title:	Chief Financial Officer, Treasurer and Secretary

Pursuant to the Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 23, 2019
Document And Entity Information [Abstract]
Document type	10-Q
Amendment flag	false
Document period end date	Mar. 31, 2019
Document fiscal year focus	2019
Document fiscal period focus	Q1
Trading symbol	ARI
Entity registrant name	Apollo Commercial Real Estate Finance, Inc.
Entity central index key	0001467760
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Emerging growth company	false
Small business entity	false
Entity common stock, shares outstanding (in shares)		136,281,597

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Assets:
Cash and cash equivalents	$ 109,343,000	$ 109,806,000
Commercial mortgage loans and subordinate loans, net	5,186,999,000	4,927,593,000
Loan proceeds held by servicer	0	1,000,000
Other assets	36,540,000	33,720,000
Derivative assets, net	8,715,000	23,700,000
Total Assets	5,341,597,000	5,095,819,000
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $17,828 and $17,555 in 2019 and 2018, respectively)	2,141,939,000	1,879,522,000
Convertible senior notes, net	558,664,000	592,000,000
Accounts payable, accrued expenses and other liabilities	91,557,000	104,746,000
Payable to related party	9,613,000	9,804,000
Total Liabilities	2,801,773,000	2,586,072,000
Commitments and Contingencies (see Note 14)
Stockholders’ Equity:
Common stock, $0.01 par value, 450,000,000 shares authorized, 136,254,352 and 133,853,565 shares issued and outstanding in 2019 and 2018, respectively	1,363,000	1,339,000
Additional paid-in-capital	2,671,100,000	2,638,441,000
Accumulated deficit	(132,776,000)	(130,170,000)
Total Stockholders’ Equity	2,539,824,000	2,509,747,000
Total Liabilities and Stockholders’ Equity	5,341,597,000	5,095,819,000
Commercial Mortgage Portfolio Segment [Member]
Assets:
Commercial mortgage loans and subordinate loans, net	4,003,089,000	3,878,981,000
Subordinate Mortgage Portfolio Segment [Member]
Assets:
Commercial mortgage loans and subordinate loans, net	1,183,910,000	1,048,612,000
Series B Preferred Stock [Member]
Stockholders’ Equity:
Preferred stock	68,000	68,000
Series C Preferred Stock [Member]
Stockholders’ Equity:
Preferred stock	$ 69,000	$ 69,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Deferred financing costs	$ 17,828	$ 17,555
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,000,000	450,000,000
Common stock, shares issued (in shares)	136,254,352	133,853,565
Common stock, shares outstanding (in shares)	136,254,352	133,853,565
Series B Preferred Stock [Member]
Preferred stock, shares issued (in shares)	6,770,393	6,770,393
Preferred stock, shares outstanding (in shares)	6,770,393	6,770,393
Preferred stock, liquidation preference	$ 169,260	$ 169,260
Series C Preferred Stock [Member]
Preferred stock, shares issued (in shares)	6,900,000	6,900,000
Preferred stock, shares outstanding (in shares)	6,900,000	6,900,000
Preferred stock, liquidation preference	$ 172,500	$ 172,500
Commercial Mortgage Portfolio Segment [Member]
Loans pledged as collateral	$ 3,679,993	$ 3,197,900

XML

Condensed Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net interest income:
Interest income from commercial mortgage loans	$ 78,286	$ 52,114
Interest income from subordinate loans	40,839	33,853
Interest expense	(36,295)	(22,740)
Net interest income	82,830	63,227
Operating expenses:
General and administrative expenses (includes equity-based compensation of $3,901 and $3,342 in 2019 and 2018, respectively)	(6,151)	(4,998)
Management fees to related party	(9,613)	(8,092)
Total operating expenses	(15,764)	(13,090)
Other income	518	203
Foreign currency gain	6,894	10,125
Loss on derivative instruments (includes unrealized losses of $14,985 and $8,855 in 2019 and 2018, respectively)	(6,720)	(11,032)
Net income	67,758	49,433
Preferred dividends	(6,835)	(6,835)
Net income available to common stockholders	$ 60,923	$ 42,598
Net income per share of common stock:
Basic (in dollars per share)	$ 0.45	$ 0.38
Diluted (in dollars per share)	$ 0.43	$ 0.38
Basic weighted-average shares of common stock outstanding (in shares)	134,607,107	110,211,853
Diluted weighted-average shares of common stock outstanding (in shares)	164,683,086	111,871,429
Dividend declared per share of common stock (in dollars per share)	$ 0.46	$ 0.46

XML

Condensed Consolidated Statement of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
General and administrative expenses, equity-based compensation	$ 3,901	$ 3,342
Unrealized gain (loss) on derivatives	$ (14,985)	$ (8,855)

XML

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid In Capital [Member]	Accumulated Deficit [Member]
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2017		13,670,393	107,121,235
Stockholders' equity, beginning balance at Dec. 31, 2017	$ 2,088,143	$ 137	$ 1,071	$ 2,170,078	$ (83,143)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital increase (decrease) related to Equity Incentive Plan (in shares)			345,996
Capital increase (decrease) related to Equity Incentive Plan	(1,385)		$ 4	(1,389)
Issuance of common stock (in shares)			15,525,000
Issuance of common stock	275,879		$ 155	275,724
Offering costs	(377)			(377)
Net income	49,433				49,433
Dividends declared on preferred stock	(6,835)				(6,835)
Dividends declared on common stock - $0.46 per share	(57,328)				(57,328)
Stockholders' equity, ending balance (in shares) at Mar. 31, 2018		13,670,393	122,992,231
Stockholders' equity, ending balance at Mar. 31, 2018	2,347,530	$ 137	$ 1,230	2,444,036	(97,873)
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2018		13,670,393	133,853,565
Stockholders' equity, beginning balance at Dec. 31, 2018	2,509,747	$ 137	$ 1,339	2,638,441	(130,170)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital increase (decrease) related to Equity Incentive Plan (in shares)			433,426
Capital increase (decrease) related to Equity Incentive Plan	(1,095)		$ 4	(1,099)
Conversions of convertible senior notes for common stock (in shares)			1,967,361
Conversions of convertible senior notes for common stock	33,778		$ 20	33,758
Net income	67,758				67,758
Dividends declared on preferred stock	(6,835)				(6,835)
Dividends declared on common stock - $0.46 per share	(63,529)				(63,529)
Stockholders' equity, ending balance (in shares) at Mar. 31, 2019		13,670,393	136,254,352
Stockholders' equity, ending balance at Mar. 31, 2019	$ 2,539,824	$ 137	$ 1,363	$ 2,671,100	$ (132,776)

XML

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Dividends declared on common stock (in dollars per share)	$ 0.46	$ 0.46

XML

Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows (used in) provided by operating activities:
Net income	$ 67,758	$ 49,433
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of discount/premium and PIK	(19,611)	(15,695)
Amortization of deferred financing costs	3,461	2,545
Equity-based compensation	(1,095)	(1,385)
Foreign currency gain	(5,828)	(9,853)
Unrealized loss on derivative instruments	14,985	8,855
Changes in operating assets and liabilities:
Proceeds received from PIK	0	55,000
Other assets	(2,898)	(2,620)
Accounts payable, accrued expenses and other liabilities	620	2,075
Payable to related party	(191)	(76)
Net cash (used in) provided by operating activities	57,201	88,279
Cash flows used in investing activities:
New funding of commercial mortgage loans	(197,000)	(476,951)
Add-on funding of commercial mortgage loans	(105,452)	(13,185)
New funding of subordinate loans	(244,844)	(11,687)
Add-on funding of subordinate loans	(4,879)	(5,208)
Proceeds and payments received on commercial mortgage loans	191,317	90,547
Proceeds and payments received on subordinate loans	130,010	257,548
Origination and exit fees received on commercial mortgage and subordinate loans	6,069	19,085
Decrease in collateral held related to derivative contracts	(18,180)	(15,220)
Net cash (used in) provided by investing activities	(242,959)	(155,071)
Cash flows from financing activities:
Proceeds from issuance of common stock	0	275,879
Payment of offering costs	0	(38)
Proceeds from secured debt arrangements	412,434	416,549
Repayments of secured debt arrangements	(156,747)	(538,562)
Exchanges and conversions of convertible senior notes	(704)	0
Payment of deferred financing costs	(91)	(2,234)
Dividends on common stock	(62,762)	(57,328)
Dividends on preferred stock	(6,835)	(6,835)
Net cash (used in) provided by financing activities	185,295	87,431
Net increase (decrease) in cash and cash equivalents	(463)	20,639
Cash and cash equivalents, beginning of period	109,806	77,671
Cash and cash equivalents, end of period	109,343	98,310
Supplemental disclosure of cash flow information:
Interest paid	32,428	26,517
Supplemental disclosure of non-cash financing activities:
Exchange of convertible senior notes for common stock	33,778	0
Dividend declared, not yet paid	70,364	63,598
Offering costs payable	0	339
Loan proceeds held by servicer	0	1,000
Deferred financing costs, not yet paid	$ 3,643	$ 0

XML

Organization

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, LLC (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss reserves and impairment. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment.

Recent Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployees Share-Based Payment Accounting" ("ASU 2018-07"). The intention of ASU 2018-07 is to expand the scope of Topic 718 to include share-based payment transactions in exchange for goods and services from nonemployees. These share-based payments will now be measured at grant-date fair value of the equity instrument issued. Upon adoption, only liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established should be remeasured through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 and is applied retrospectively. We adopted ASU 2018-07 in the first quarter of 2019 and it did not have any impact on our condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326)" ("ASU 2016-13"). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.  The guidance will replace the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The guidance is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our condensed consolidated financial statements, we expect that the adoption will result in higher provisions for potential loan losses.

XML

Fair Value Disclosure

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Disclosure

Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair values. Market based, or observable inputs are the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy as noted in ASC 820 "Fair Value Measurements and Disclosures" are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods will be appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The estimated fair values of our derivative instruments are determined using a discounted cash flow analysis on the

expected cash flows of each derivative. The fair values of interest rate caps are determined using the market standard

methodology of discounting the future expected cash receipts (or payments) that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected cash flows are based on an

expectation of future interest rates derived from observable market interest rate curves and volatilities. The fair values of

foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange

rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for

the underlying countries. Our derivative instruments are classified as Level II in the fair value hierarchy.

The following table summarizes the levels in the fair value hierarchy into which our financial instruments were categorized as of March 31, 2019 and December 31, 2018 ($ in thousands): 

	Fair Value as of March 31, 2019								Fair Value as of December 31, 2018
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Derivative assets, net	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700
Total	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700

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Commercial Mortgage and Subordinate Loans, Net

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Commercial Mortgage and Subordinate Loans, Net

Commercial Mortgage and Subordinate Loans, Net

Our loan portfolio was comprised of the following at March 31, 2019 and December 31, 2018 ($ in thousands):

Loan Type	March 31, 2019		December 31, 2018
Commercial mortgage loans, net	$	4,003,089	$	3,878,981
Subordinate loans, net	1,183,910		1,048,612
Total loans, net	$	5,186,999	$	4,927,593

Our loan portfolio consisted of 93% and 91% floating rate loans, based on amortized cost, as of March 31, 2019 and December 31, 2018, respectively.

Activity relating to our loan investment portfolio, for the three months endedMarch 31, 2019, was as follows ($ in thousands):

	Principal Balance			Deferred Fees/Other Items (1)			Provision for Loan Loss (2)			Carrying Value
December 31, 2018	$	4,982,514		$	(17,940	)	$	(36,981	)	$	4,927,593
New loan fundings	441,844			—			—			441,844
Add-on loan fundings (3)	110,331			—			—			110,331
Loan repayments	(322,354		)	—			—			(322,354		)
Gain (loss) on foreign currency translation	15,033			(136		)	—			14,897
Deferred fees	—			(6,069		)	—			(6,069		)
PIK interest and amortization of fees	14,321			6,436			—			20,757
March 31, 2019	$	5,241,689		$	(17,709	)	$	(36,981	)	$	5,186,999

———————

(1)Other items primarily consist of purchase discounts or premiums, exit fees and deferred origination expenses.

(2)In addition to the $37.0 million provision for loan loss, we recorded an impairment of $3.0 million against an investment previously recorded under other assets on our condensed consolidated balance sheet.

(3) Represents fundings for loans closed prior to 2019.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	March 31, 2019			December 31, 2018
Number of loans	69			69
Principal balance	$	5,241,689		$	4,982,514
Carrying value	$	5,186,999		$	4,927,593
Unfunded loan commitments (1)	$	1,039,089		$	1,095,598
Weighted-average cash coupon (2)	8.4		%	8.4		%
Weighted-average remaining term (3)	2.9 years			2.8 years

———————

(1) Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2) For floating rate loans, based on applicable benchmark rates as of the specified dates.

(3) Assumes all extension options are exercised.

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Property Type	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Hotel	$	1,330,842	25.7	%	$	1,286,590	26.1	%
Residential-for-sale: construction	631,501		12.1	%	528,510		10.7	%
Residential-for-sale: inventory	421,815		8.1	%	577,053		11.7	%
Office	956,989		18.5	%	832,620		16.9	%
Urban Predevelopment	610,888		11.8	%	683,886		13.9	%
Multifamily	521,087		10.0	%	448,899		9.1	%
Industrial	227,206		4.4	%	32,000		0.6	%
Retail Center	156,008		3.0	%	156,067		3.2	%
Healthcare	144,310		2.8	%	156,814		3.2	%
Mixed Use	114,284		2.2	%	73,957		1.5	%
Other	72,069		1.4	%	151,197		3.1	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Geographic Location	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Manhattan, NY	$	1,825,136	35.2	%	$	1,669,145	33.9	%
Brooklyn, NY	547,139		10.5	%	346,056		7.0	%
Northeast	18,751		0.4	%	23,479		0.5	%
West	635,733		12.3	%	614,160		12.5	%
Midwest	617,599		11.9	%	631,710		12.8	%
Southeast	567,794		10.9	%	559,043		11.3	%
Southwest	120,127		2.3	%	96,345		2.0	%
Mid Atlantic	110,754		2.1	%	211,775		4.3	%
United Kingdom	668,507		12.9	%	700,460		14.2	%
Other International	75,459		1.5	%	75,420		1.5	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

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

1.    Very low risk

2.    Low risk

3. Moderate/average risk

4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or has been impaired

The following table allocates the carrying value of our loan portfolio based on our internal risk ratings at the dates indicated ($ in thousands):

	March 31, 2019					December 31, 2018
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio		Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—	%	—	$	—	—	%
2	2	58,847		1	%	3	138,040		3	%
3	64	4,915,843		95	%	63	4,573,930		93	%
4	—	—		—	%	—	—		—	%
5	3	212,309		4	%	3	215,623		4	%
	69	$	5,186,999	100	%	69	$	4,927,593	100	%
Weighted-average risk rating				3.1					3.1

We evaluate our loans for possible impairment on a quarterly basis. We regularly evaluate the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the property’s liquidation value. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such loan loss analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. An allowance for loan loss is established when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan.

We evaluate modifications to our loan portfolio to determine if the modifications constitute a troubled debt restructuring ("TDR") and/or substantial modification, under ASC Topic 310, "Receivables." During the second quarter of 2018, we determined that a modification of one commercial mortgage loan, secured by a retail center in Cincinnati, OH, with a principal balance of $169.0 million constituted a TDR as the interest rate spread was reduced from 5.5% over LIBOR to 3.0% over LIBOR. The entity in which we own an interest and which owns the underlying property was deemed to be a variable interest entity ("VIE") and it was determined that we are not the primary beneficiary of that VIE. During the fourth quarter of 2018, we recorded a $15.0 million loan loss provision against this loan. After the loan loss provision, the amortized cost of the loan was $156.0 million as of March 31, 2019 and December 31, 2018. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using the direct capitalization method. The significant unobservable inputs used in determining the collateral value were in-place net operating income and capitalization rate which were $10.5 million and 6.8%, respectively. The loan is on accrual status and we continue to receive contractual interest due. As of March 31, 2019 and 2018, this loan was assigned a risk rating of 5.

We recorded a $10.0 million loan loss provision and impairment against a commercial mortgage loan secured by a fully-built, for-sale residential condominium units located in Bethesda, MD. This was comprised of (i) $5.0 million loan loss recorded during the second quarter of 2018, and (ii) $2.0 million loan loss provision and $3.0 million of impairment recorded during the second quarter of 2017. The impairment was recorded on an investment previously recorded under other assets on our condensed consolidated balance sheet. After the loan loss provisions and related impairment, the amortized cost balance of the loan was $24.2 million and $27.2 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision and impairment were based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision and related impairment). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were sales price per square foot and discount rate which were an average of $662 per square foot across properties and 15%, respectively. Effective April 1, 2017, we ceased accruing all interest associated with the loan and account for the loan on a cost-recovery basis (all proceeds are applied towards the loan balance). As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During 2016, we recorded a loan loss provision of $10.0 million on a commercial mortgage loan and $5.0 million on a contiguous subordinate loan secured by a multifamily property located in Williston, ND. After the loan loss provisions, the amortized cost of the loan was $32.1 million and $32.4 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were terminal capitalization rate and discount rate which were 11% and 10%, respectively. The entity in which we own an interest and which owns the underlying property was deemed to be a VIE and it was determined that we are not the primary beneficiary of the VIE. We ceased accruing interest associated with the loan and only recognize interest income upon receipt of cash. As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During the year ended December 31, 2018, we sold a $75.0 million ($17.7 million funded) subordinate position of our $265.0 million loans for the construction of an office campus in Renton, Washington. As of March 31, 2019, our exposure to the property is limited to a $190.0 million ($96.1 million funded) mortgage loan. This transaction was evaluated under ASC 860 - Transfers and Servicing and we determined that it qualifies as a sale and accounted for as such.

As of March 31, 2019 and December 31, 2018, the aggregate loan loss provision was $37.0 million for commercial mortgage loans and subordinate loans.

We recognized payment-in-kind ("PIK") interest of $14.5 million and $10.6 million for the three months endedMarch 31, 2019 and 2018, respectively.

We recognized pre-payment penalties and accelerated fees of $3.7 million for the three months endedMarch 31, 2019. There were no pre-payment penalties and accelerated fees for the three months ended March 31, 2018.

Loan Proceeds Held by Servicer

Loan proceeds held by servicer represents principal payments held by our third-party loan servicer as of the balance sheet date which were remitted to us subsequent to the balance sheet date. Loan proceeds held by servicer was$1.0 millionas of December 31, 2018. There were no loan proceeds held by servicer as of March 31, 2019.

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Loan Proceeds Held by Servicer

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Loan Proceeds Held by Servicer

Commercial Mortgage and Subordinate Loans, Net

Our loan portfolio was comprised of the following at March 31, 2019 and December 31, 2018 ($ in thousands):

Loan Type	March 31, 2019		December 31, 2018
Commercial mortgage loans, net	$	4,003,089	$	3,878,981
Subordinate loans, net	1,183,910		1,048,612
Total loans, net	$	5,186,999	$	4,927,593

Our loan portfolio consisted of 93% and 91% floating rate loans, based on amortized cost, as of March 31, 2019 and December 31, 2018, respectively.

Activity relating to our loan investment portfolio, for the three months endedMarch 31, 2019, was as follows ($ in thousands):

	Principal Balance			Deferred Fees/Other Items (1)			Provision for Loan Loss (2)			Carrying Value
December 31, 2018	$	4,982,514		$	(17,940	)	$	(36,981	)	$	4,927,593
New loan fundings	441,844			—			—			441,844
Add-on loan fundings (3)	110,331			—			—			110,331
Loan repayments	(322,354		)	—			—			(322,354		)
Gain (loss) on foreign currency translation	15,033			(136		)	—			14,897
Deferred fees	—			(6,069		)	—			(6,069		)
PIK interest and amortization of fees	14,321			6,436			—			20,757
March 31, 2019	$	5,241,689		$	(17,709	)	$	(36,981	)	$	5,186,999

———————

(1)Other items primarily consist of purchase discounts or premiums, exit fees and deferred origination expenses.

(2)In addition to the $37.0 million provision for loan loss, we recorded an impairment of $3.0 million against an investment previously recorded under other assets on our condensed consolidated balance sheet.

(3) Represents fundings for loans closed prior to 2019.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	March 31, 2019			December 31, 2018
Number of loans	69			69
Principal balance	$	5,241,689		$	4,982,514
Carrying value	$	5,186,999		$	4,927,593
Unfunded loan commitments (1)	$	1,039,089		$	1,095,598
Weighted-average cash coupon (2)	8.4		%	8.4		%
Weighted-average remaining term (3)	2.9 years			2.8 years

———————

(1) Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2) For floating rate loans, based on applicable benchmark rates as of the specified dates.

(3) Assumes all extension options are exercised.

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Property Type	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Hotel	$	1,330,842	25.7	%	$	1,286,590	26.1	%
Residential-for-sale: construction	631,501		12.1	%	528,510		10.7	%
Residential-for-sale: inventory	421,815		8.1	%	577,053		11.7	%
Office	956,989		18.5	%	832,620		16.9	%
Urban Predevelopment	610,888		11.8	%	683,886		13.9	%
Multifamily	521,087		10.0	%	448,899		9.1	%
Industrial	227,206		4.4	%	32,000		0.6	%
Retail Center	156,008		3.0	%	156,067		3.2	%
Healthcare	144,310		2.8	%	156,814		3.2	%
Mixed Use	114,284		2.2	%	73,957		1.5	%
Other	72,069		1.4	%	151,197		3.1	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Geographic Location	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Manhattan, NY	$	1,825,136	35.2	%	$	1,669,145	33.9	%
Brooklyn, NY	547,139		10.5	%	346,056		7.0	%
Northeast	18,751		0.4	%	23,479		0.5	%
West	635,733		12.3	%	614,160		12.5	%
Midwest	617,599		11.9	%	631,710		12.8	%
Southeast	567,794		10.9	%	559,043		11.3	%
Southwest	120,127		2.3	%	96,345		2.0	%
Mid Atlantic	110,754		2.1	%	211,775		4.3	%
United Kingdom	668,507		12.9	%	700,460		14.2	%
Other International	75,459		1.5	%	75,420		1.5	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

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

1.    Very low risk

2.    Low risk

3. Moderate/average risk

4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or has been impaired

The following table allocates the carrying value of our loan portfolio based on our internal risk ratings at the dates indicated ($ in thousands):

	March 31, 2019					December 31, 2018
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio		Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—	%	—	$	—	—	%
2	2	58,847		1	%	3	138,040		3	%
3	64	4,915,843		95	%	63	4,573,930		93	%
4	—	—		—	%	—	—		—	%
5	3	212,309		4	%	3	215,623		4	%
	69	$	5,186,999	100	%	69	$	4,927,593	100	%
Weighted-average risk rating				3.1					3.1

We evaluate our loans for possible impairment on a quarterly basis. We regularly evaluate the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the property’s liquidation value. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such loan loss analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. An allowance for loan loss is established when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan.

We evaluate modifications to our loan portfolio to determine if the modifications constitute a troubled debt restructuring ("TDR") and/or substantial modification, under ASC Topic 310, "Receivables." During the second quarter of 2018, we determined that a modification of one commercial mortgage loan, secured by a retail center in Cincinnati, OH, with a principal balance of $169.0 million constituted a TDR as the interest rate spread was reduced from 5.5% over LIBOR to 3.0% over LIBOR. The entity in which we own an interest and which owns the underlying property was deemed to be a variable interest entity ("VIE") and it was determined that we are not the primary beneficiary of that VIE. During the fourth quarter of 2018, we recorded a $15.0 million loan loss provision against this loan. After the loan loss provision, the amortized cost of the loan was $156.0 million as of March 31, 2019 and December 31, 2018. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using the direct capitalization method. The significant unobservable inputs used in determining the collateral value were in-place net operating income and capitalization rate which were $10.5 million and 6.8%, respectively. The loan is on accrual status and we continue to receive contractual interest due. As of March 31, 2019 and 2018, this loan was assigned a risk rating of 5.

We recorded a $10.0 million loan loss provision and impairment against a commercial mortgage loan secured by a fully-built, for-sale residential condominium units located in Bethesda, MD. This was comprised of (i) $5.0 million loan loss recorded during the second quarter of 2018, and (ii) $2.0 million loan loss provision and $3.0 million of impairment recorded during the second quarter of 2017. The impairment was recorded on an investment previously recorded under other assets on our condensed consolidated balance sheet. After the loan loss provisions and related impairment, the amortized cost balance of the loan was $24.2 million and $27.2 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision and impairment were based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision and related impairment). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were sales price per square foot and discount rate which were an average of $662 per square foot across properties and 15%, respectively. Effective April 1, 2017, we ceased accruing all interest associated with the loan and account for the loan on a cost-recovery basis (all proceeds are applied towards the loan balance). As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During 2016, we recorded a loan loss provision of $10.0 million on a commercial mortgage loan and $5.0 million on a contiguous subordinate loan secured by a multifamily property located in Williston, ND. After the loan loss provisions, the amortized cost of the loan was $32.1 million and $32.4 million as of March 31, 2019 and December 31, 2018, respectively. The loan loss provision was based on the difference between fair value of the underlying collateral, and the carrying value of the loan (prior to the loan loss provision). Fair value of the collateral was determined using a discounted cash flow analysis. The significant unobservable inputs used in determining the collateral value were terminal capitalization rate and discount rate which were 11% and 10%, respectively. The entity in which we own an interest and which owns the underlying property was deemed to be a VIE and it was determined that we are not the primary beneficiary of the VIE. We ceased accruing interest associated with the loan and only recognize interest income upon receipt of cash. As of March 31, 2019 and December 31, 2018, this loan was assigned a risk rating of 5.

During the year ended December 31, 2018, we sold a $75.0 million ($17.7 million funded) subordinate position of our $265.0 million loans for the construction of an office campus in Renton, Washington. As of March 31, 2019, our exposure to the property is limited to a $190.0 million ($96.1 million funded) mortgage loan. This transaction was evaluated under ASC 860 - Transfers and Servicing and we determined that it qualifies as a sale and accounted for as such.

As of March 31, 2019 and December 31, 2018, the aggregate loan loss provision was $37.0 million for commercial mortgage loans and subordinate loans.

We recognized payment-in-kind ("PIK") interest of $14.5 million and $10.6 million for the three months endedMarch 31, 2019 and 2018, respectively.

We recognized pre-payment penalties and accelerated fees of $3.7 million for the three months endedMarch 31, 2019. There were no pre-payment penalties and accelerated fees for the three months ended March 31, 2018.

Loan Proceeds Held by Servicer

Loan proceeds held by servicer represents principal payments held by our third-party loan servicer as of the balance sheet date which were remitted to us subsequent to the balance sheet date. Loan proceeds held by servicer was$1.0 millionas of December 31, 2018. There were no loan proceeds held by servicer as of March 31, 2019.

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Other Assets

3 Months Ended

Mar. 31, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	March 31, 2019		December 31, 2018
Interest receivable	$	36,085	$	33,399
Other	455		321
Total	$	36,540	$	33,720

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Secured Debt Arrangements, Net

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Secured Debt Arrangements, Net

Secured Debt Arrangements, Net

At March 31, 2019 and December 31, 2018, our borrowings had the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	March 31, 2019 (2)						December 31, 2018 (2)
	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)
JPMorgan Facility (USD)	$	1,305,435	$	873,771		June 2021	$	1,333,503	$	680,141		June 2021
JPMorgan Facility (GBP)	49,565		49,565			June 2021	48,497		48,497			June 2021
DB Repurchase Facility (USD)	858,919		475,871			March 2021	904,181		419,823			March 2021
DB Repurchase Facility (GBP)	141,081		141,081			March 2021	150,819		150,819			March 2021
Goldman Facility	500,000		233,312			November 2021	300,000		210,072			November 2020
CS Facility (USD)	188,037		188,037			September 2019	187,117		187,117			June 2019
CS Facility (GBP)	148,219		148,219			September 2019	151,773		151,773			June 2019
HSBC Facility (GBP)	49,911		49,911			December 2019	48,835		48,835			December 2019
Sub-total	3,241,167		2,159,767				3,124,725		1,897,077
less: deferred financing costs	N/A		(17,828		)		N/A		(17,555		)
Total / Weighted-Average	$	3,241,167	$	2,141,939			$	3,124,725	$	1,879,522

———————

(1) Maturity date assumes extensions at our option are exercised.

(2) Weighted-average rates as of March 31, 2019 and December 31, 2018 were USD L + 2.19% / GBP L + 2.30% and USD L + 2.17% / GBP L + 2.28%, respectively.

JPMorgan Facility

In May 2017, through two indirect wholly-owned subsidiaries, we entered into a Fifth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association (as amended, the "JPMorgan Facility"). The JPMorgan Facility provides for maximum total borrowing capacity of $1.4 billion, comprised of a $1.25 billion repurchase facility and a $105.0 million asset specific financing and enables us to elect to receive advances in either U.S. dollars, British pounds ("GBP"), or Euros ("EUR"). The repurchase facility matures in June 2020, plus a one-year extension available at our option, subject to certain conditions. The asset specific financing matures in May 2019. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under the JPMorgan Facility.

As of March 31, 2019, we had $923.3 million (including £38.0 million assuming conversion into U.S. dollars) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Repurchase Facility

In April 2018, through an indirect wholly-owned subsidiary, we entered into a Second Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch and Deutsche Bank AG, London Branch (as amended, the "DB Repurchase Facility"), which was upsized in September 2018, and provides for advances of up to $1.0 billion for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in either U.S. dollars, British pounds, or Euros. The repurchase facility matures in March 2020, plus a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $617.0 million (including £108.2 million assuming conversion into U.S. dollars) of borrowings outstanding under the DB Repurchase Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA (the "Goldman Facility"), which was upsized in March 2019 from $300.0 million to $500.0 million and matures in November 2019, plus twoone-year extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified margin deficit thresholds. We have agreed to provide a limited guarantee of the obligations of the seller under the Goldman Facility.

As of March 31, 2019, we had $233.3 million of borrowings outstanding under the Goldman Facility.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility - USD"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - USD matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $188.0 million of borrowings outstanding under the CS Facility - USD secured by certain of our commercial mortgage loans.

CS Facility - GBP

In June 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility - GBP"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility - GBP matures six months after either party notifies the other party of intention to terminate. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $148.2 million (£113.7 million assuming conversion into U.S. dollars) of borrowings outstanding under the CS Facility - GBP secured by one of our commercial mortgage loans.

HSBC Facility

In September 2018, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc (the "HSBC Facility"), which provides for a single asset financing. The facility matures in December 2019 and unless terminated by either party, automatically extends for further periods prior to maturity. Margin calls may occur any time at specified aggregate margin deficit thresholds. We have agreed to provide a guarantee of the obligations of our indirect wholly-owned subsidiaries under this facility.

As of March 31, 2019, we had $49.9 million (£38.3 million assuming conversion into U.S. dollars) of borrowings outstanding under the HSBC Facility secured by one of our commercial mortgage loans.

At March 31, 2019, our borrowings had the following remaining maturities ($ in thousands):

	Less than 1 year (1)		1 to 3 years (1)		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	159,854	$	763,482	$	—	$	—	$	923,336
DB Repurchase Facility	109,142		507,810		—		—		616,952
Goldman Facility	—		233,312		—		—		233,312
CS Facility - USD	188,037		—		—		—		188,037
CS Facility - GBP	148,219		—		—		—		148,219
HSBC Facility	49,911		—		—		—		49,911
Total	$	655,163	$	1,504,604	$	—	$	—	$	2,159,767

———————

(1)Assumes underlying assets are financed through the fully extended maturity date of the facility.

The table below summarizes the outstanding balances at March 31, 2019, as well as the maximum and average month-end balances for the three months endedMarch 31, 2019 for our borrowings under secured debt arrangements ($ in thousands).

	As of March 31, 2019				For the three months ended March 31, 2019
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	923,336	$	1,612,510	$	929,496	$	925,679
DB Repurchase Facility	616,952		1,013,662		672,477		636,283
Goldman Facility	233,312		517,122		259,167		250,286
CS Facility - USD	188,037		254,090		188,037		187,424
CS Facility - GBP	148,219		211,468		150,811		145,814
HSBC Facility	49,911		71,141		50,784		50,296
Total	$	2,159,767	$	3,679,993

We were in compliance with the covenants under each of our secured debt arrangements at March 31, 2019 and December 31, 2018.

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Convertible Senior Notes, Net

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Convertible Senior Notes, Net

Convertible Senior Notes, Net

In two separate offerings during 2014, we issued an aggregate principal amount of $254.8 million of 5.50% Convertible Senior Notes due 2019 (the "2019 Notes"), for which we received $248.6 million, after deducting the underwriting discount and offering expenses. The 2019 Notes were exchanged or converted for shares of our common stock and cash as follows:

(i) On August 2, 2018, we entered into privately negotiated exchange agreements with a limited number of holders of the 2019 Notes pursuant to which we exchanged $206.2 million of the 2019 Notes for an aggregate of (a) 10,020,328 newly issued shares of our common stock, and (b) $39.3 million in cash. We recorded $166.0 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions,

(ii) Certain holders elected to convert $47.9 million of the 2019 Notes, which were settled for an aggregate of (a) 2,775,509 newly issued shares of our common stock, and (b) $0.2 million in cash. We recorded $13.9 million of additional paid-in-capital in the condensed consolidated statement of changes in stockholders' equity in connection with these transactions. These conversions occurred from August 2018 through maturity.

The remaining $0.7 million in principal amount of the 2019 Notes were repaid at maturity on March 15, 2019.

During the year ended December 31, 2018, we recorded a loss on early extinguishment of debt of $2.6 million, in connection with the exchanges and conversions of the 2019 Notes. This includes fees and accelerated amortization of capitalized costs. There was no such loss related to the 2019 Notes during the three months ended March 31, 2019.

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022 (the "2022 Notes"), for which we received $337.5 million, after deducting the underwriting discount and offering expenses.At March 31, 2019, the 2022 Notes had a carrying value of $335.9 million and an unamortized discount of $9.1 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023 ("2023 Notes," and together with the 2019 Notes and 2022 Notes, the "Notes"), for which we received $223.7 million after deducting the underwriting discount and offering expenses. At March 31, 2019, the 2023 Notes had a carrying value of $222.8 million and an unamortized discount of $7.2 million.

The following table summarizes the terms of the Notes ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.226	8/23/2022	3.4
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	4.55
Total	$	575,000

———————

(1) Effective rate includes the effect of the adjustment for the conversion option (See endnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2) We have the option to settle any conversions in cash, shares of common stock or a combination thereof.  The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

In accordance with ASC 470 - Debt, the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) is to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by us at such time. We measured the fair value of the debt components of the Notes as of their issuance date based on effective interest rates.  As a result, we attributed approximately $15.4 million of the proceeds to the equity component of the Notes ($11.0 million to the 2022 Notes and $4.4 million to the 2023 Notes), which represents the excess proceeds received over the fair value of the liability component of the Notes at the date of issuance. The equity component of the Notes has been reflected within additional paid-in capital in the condensed consolidated balance sheet as of March 31, 2019. The resulting debt discount is being amortized over the period during which the Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Notes will increase in subsequent reporting periods through the maturity date as the Notes accrete to their par value over the same period.

The aggregate contractual interest expense was approximately $7.6 million and $7.6 million for the three months endedMarch 31, 2019 and 2018, respectively. With respect to the amortization of the discount on the liability component of the Notes as well as the amortization of deferred financing costs, we reported additional non-cash interest expense of approximately $1.7 million and $1.8 million for the three months endedMarch 31, 2019 and 2018, respectively.

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Derivatives, Net

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives, Net

Derivatives, Net

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than U.S. dollars.

We have entered into a series of forward contracts to sell an amount of foreign currency (British pound and Euro) for an agreed upon amount of U.S. dollars at various dates through December 2021. These forward contracts were executed to economically fix the U.S. dollar amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

The following table summarizes our non-designated foreign exchange ("Fx") forwards as of March 31, 2019:

	March 31, 2019
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	78	259,604	GBP	April 2019- December 2021	1.07

The following table summarizes our non-designated Fx forwards as of December 31, 2018:

	December 31, 2018
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	43	270,161	GBP	January 2019 - November 2020	0.69

We have not designated any of our derivative instruments as hedges as defined in ASC 815 "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on the condensed consolidated statements of operations related to our derivatives for the three months endedMarch 31, 2019 and 2018 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three months ended March 31,
	Location of Gain (Loss) Recognized in Income	2019			2018
Forward currency contracts	Loss on derivative instruments - unrealized	$	(14,985	)	$	(8,859	)
Forward currency contracts	Gain (loss) on derivative instruments - realized	8,265			(2,177		)
Interest rate caps(1)	Gain on derivative instruments - unrealized	—			4
Total		$	(6,720	)	$	(11,032	)

———————

(1) With a notional amount of $33.6 million and $38.9 million at March 31, 2019, and 2018, respectively.

The following table summarizes the gross asset and liability amounts related to our derivatives at March 31, 2019 and December 31, 2018 ($ in thousands).

	March 31, 2019							December 31, 2018
	Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet		Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet
Forward currency contracts	9,852		(1,137		)	8,715		23,753		(53		)	23,700
Total derivative instruments	$	9,852	$	(1,137	)	$	8,715	$	23,753	$	(53	)	$	23,700

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Accounts Payable, Accrued Expenses and Other Liabilities

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	March 31, 2019		December 31, 2018
Accrued dividends payable	$	69,799	$	69,033
Collateral deposited under derivative agreements	1,820		20,000
Accrued interest payable	13,488		14,208
Accounts payable and other liabilities	6,450		1,505
Total	$	91,557	$	104,746

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Related Party Transactions

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Management Agreement

In connection with our initial public offering in September 2009, we entered into a management agreement (the "Management Agreement") with the Manager, which describes the services to be provided by the Manager and its compensation for those services. The Manager is responsible for managing our day-to-day operations, subject to the direction and oversight of our board of directors.

Pursuant to the terms of the Management Agreement, the Manager is paid a base management fee equal to 1.5% per annum of our stockholders’ equity (as defined in the Management Agreement), calculated and payable (in cash) quarterly in arrears.

The current term of the Management Agreement was renewed during the period and expires on September 29, 2019 and is automatically renewed for successive one-year terms on each anniversary thereafter. The Management Agreement may be terminated upon expiration of the one-year extension term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to ARI or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Following a meeting by our independent directors in February 2019, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to seek termination of the Management Agreement.

We incurred approximately $9.6 million in base management fees under the Management Agreement for the three months ended March 31, 2019 as compared to approximately $8.1 million for the three months ended March 31, 2018.

In addition to the base management fee, we are also responsible for reimbursing the Manager for certain expenses paid by the Manager on our behalf or for certain services provided by the Manager to us.

For the three months endedMarch 31, 2019 and 2018, we paid expenses totaling $0.7 million and $0.6 million, respectively, related to reimbursements for certain expenses paid by the Manager on our behalf under the Management Agreement. Expenses incurred by the Manager and reimbursed by us are reflected in the respective condensed consolidated statement of operations expense category or the condensed consolidated balance sheet based on the nature of the item.

Included in payable to related party on the condensed consolidated balance sheet at March 31, 2019 and December 31, 2018 are approximately $9.6 million and $9.8 million, respectively, for base management fees incurred but not yet paid under the Management Agreement.

Loans receivable

In June 2017, we increased our outstanding loan commitment through the acquisition of an additional $25.0 million of interests in an existing subordinate loan from a fund managed by an affiliate of the Manager, increasing our total outstanding loan commitment to $100.0 million. Furthermore, in September 2017 we funded an additional $25.0 million to acquire a portion of the same pre-development subordinate loan from a fund managed by an affiliate of the Manager, increasing our total outstanding loan commitment to $125.0 million. In May 2018, we increased our outstanding principal balance through the acquisition of an additional $28.2 million interest in the same subordinate loan from a fund managed by an affiliate of the Manager. The pre-development subordinate loan is for the construction of a residential condominium building in New York, New York and is part of a $300.0 million subordinate loan.

In June 2018, we increased our outstanding loan commitment through the acquisition of £4.8 million ($6.4 million assuming conversion into U.S. dollars) pari-passu interest in an existing subordinate loan from a fund managed by an affiliate of the Manager. The subordinate loan is secured by a healthcare portfolio located in the United Kingdom.

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Share-Based Payments

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

Share-Based Payments

On September 23, 2009, our board of directors approved the Apollo Commercial Real Estate Finance, Inc., 2009 Equity Incentive Plan (as amended from time to time, the "LTIP"). The LTIP provides for grants of restricted common stock, restricted stock units ("RSUs") and other equity-based awards up to an aggregate of 7.5% of the issued and outstanding shares of our common stock (on a fully diluted basis). The LTIP is administered by the compensation committee of our board of directors (the "Compensation Committee") and all grants under the LTIP must be approved by the Compensation Committee.

We recognized stock-based compensation expense of $3.9 million and $3.3 million for the three months endedMarch 31, 2019 and 2018, respectively, related to restricted stock and RSU vesting. We adopted ASU 2018-07 on January 1, 2019 and the stock-based compensation expense for grants before the adoption of ASU 2018-07 is based on the closing price of our common stock of $16.66 on December 31, 2018, which was the last business day before we adopted ASU 2018-07. Refer to "Note 2 - Summary of Significant Accounting Policies" for further discussion on our adoption of ASU 2018-07.

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the three months endedMarch 31, 2019:

	Type	Restricted Stock		RSUs		Grant Date Fair Value ($ in thousands)
Outstanding at December 31, 2018		65,697		1,852,957
	Vested	(1,419	)	—		N/A
	Forfeiture	—		(4,174	)	N/A
Outstanding at March 31, 2019		64,278		1,848,783

Below is a summary of restricted stock and RSU vesting dates as of March 31, 2019: 

Vesting Year	Restricted Stock	RSU	Total Awards
2019	40,671	887,222	927,893
2020	14,251	626,738	640,989
2021	9,356	334,823	344,179
Total	64,278	1,848,783	1,913,061

At March 31, 2019, we had unrecognized compensation expense of approximately $0.6 million and $27.1 million, respectively, related to the vesting of restricted stock awards and RSUs noted in the table above.

RSU Deliveries

During the three months endedMarch 31, 2019 and 2018, we delivered 433,426 and 354,996 shares of common stock for 730,717 and 603,677 vested RSUs, respectively. We allow RSU participants to settle their tax liabilities with a reduction of their share delivery from the originally granted and vested RSUs. The amount, when agreed to by the participant, results in a cash payment to the Manager related to this tax liability and a corresponding adjustment to additional paid in capital on the condensed consolidated statement of changes in stockholders' equity. The adjustment was $5.0 million and $4.7 million for the three months endedMarch 31, 2019 and 2018, respectively. The adjustment is a reduction of capital related to our equity incentive plan and is presented net of increases of capital related to our equity incentive plan in the condensed consolidated statement of changes in stockholders' equity.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Our authorized capital stock consists of 450,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of March 31, 2019, 136,254,352 shares of common stock were issued and outstanding, 6,770,393 shares of 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock") were issued and outstanding and $6,900,000 shares of 8.00% Series C Cumulative Redeemable Perpetual Preferred Stock ("Series C Preferred Stock") were issued and outstanding.

Dividends. During 2019, we declared the following dividends:

	Three months ended
Dividend declared per share of:	March 31, 2019	March 31, 2018
Common Stock	$0.46	$0.46
Series B Preferred Stock	0.50	0.50
Series C Preferred Stock	0.50	0.50

Common Stock Offerings. During the first quarter of 2018, we completed a follow-on public offering of 15,525,000 shares of our common stock, at a price of $17.77 per share. The aggregate net proceeds from the offering, including proceeds from the sale of the additional shares, were $275.9 million after deducting offering expenses.

During the first quarter of 2019, we issued 1,967,361 shares of our common stock, at a per share conversion price of $17.17, related to conversions of the 2019 Notes, the remainder of which matured on March 15, 2019. We recorded a $33.8 million increase in additional paid in capital in the condensed consolidated statement of changes in stockholders' equity. Refer to "Note 8 - Convertible Senior Notes, Net" for a further discussion on the conversions of the 2019 Notes.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings. From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. On June 28, 2018, AmBase Corporation, 111 West 57th Street Manager Funding LLC and 111 West 57th Investment LLC commenced an action captioned AmBase Corporation et al v. ACREFI Mortgage Lending, LLC et al (No. 653251/2018) in New York Supreme Court.  The complaint names as defendants (i) ACREFI Mortgage Lending, LLC, a subsidiary of the Company, (ii) the Company, and (iii) certain funds managed by Apollo, who are co-lenders on a mezzanine loan against the development of a residential condominium building in Manhattan, New York. The plaintiffs allege that the defendants tortiously interfered with the contractual equity put right in the plaintiffs’ joint venture agreement with the developers of the project, and that the defendants aided and abetted breaches of fiduciary duty by the developers of the project.  The plaintiffs allege the loss of a $70.0 million investment as part of total damages of $700.0 million, which includes punitive damages. The defendants moved to dismiss the complaint on August 17, 2018, and the motion was fully briefed in October 2018. Oral argument took place on March 12, 2019, and the court’s decision is pending. We believe the claims are without merit and plan to vigorously defend the case. We do not believe this will have a material adverse effect on our condensed consolidated financial statements.

Loan Commitments. As described in "Note 4 - Commercial Mortgage and Subordinate Loans, Net," at March 31, 2019, we had $1,039.1 million of unfunded commitments related to our commercial mortgage and subordinate loan portfolios.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on the condensed consolidated balance sheet at March 31, 2019 and December 31, 2018 ($ in thousands):

	March 31, 2019						December 31, 2018
	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Cash and cash equivalents	$	109,343		$	109,343		$	109,806		$	109,806
Commercial first mortgage loans, net	4,003,089			4,025,760			3,878,981			3,894,947
Subordinate loans, net	1,183,910			1,187,128			1,048,612			1,047,854
Secured debt arrangements	(2,159,767		)	(2,159,767		)	(1,897,077		)	(1,897,077		)
2019 Notes	—			—			(34,278		)	(35,276		)
2022 Notes	(335,894		)	(337,762		)	(335,291		)	(326,025		)
2023 Notes	(222,770		)	(225,770		)	(222,431		)	(221,964		)

To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, are used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. Estimates of fair value for cash and convertible senior notes, net are measured using observable Level I inputs as defined in "Note 3 - Fair Value Disclosure." Estimates of fair value for all other financial instruments in the table above are measured using significant estimates, or unobservable Level III inputs as defined in "Note 3 - Fair Value Disclosure."

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Net Income per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Net Income per Share

Net Income per Share

ASC 260 "Earnings per share" requires the use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock.

The table below presents the computation of basic and diluted net income per share of common stock for the three months endedMarch 31, 2019 and 2018 ($ in thousands except per share data):

	For the three months ended March 31,
	2019			2018
Basic Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Less: Dividends on participating securities	(851		)	(751		)
Basic Earnings	$	60,072		$	41,847
Diluted Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Add: Interest expense on Notes	9,262			N/A
Diluted Earnings	$	70,185		$	42,598
Number of Shares:
Basic weighted-average shares of common stock outstanding	134,607,107			110,211,853
Diluted weighted-average shares of common stock outstanding	164,683,086			111,871,429
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45		$	0.38
Diluted	$	0.43		$	0.38

Prior to the three months ended September 30, 2018, we asserted our intent and ability to settle the principal amount of the Notes in cash and, as a result, the Notes did not have any impact on our diluted earnings per share. As of September 30, 2018, we no longer asserted our intent to fully settle the principal amount of the Notes in cash upon conversion. Accordingly, the dilutive effect to earnings per share for the current year periods is determined using the "if-converted" method whereby interest expense on the outstanding Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three months endedMarch 31, 2019, 30,093,312 weighted-average potentially issuable shares from the Notes were included in the dilutive earnings per share denominator. Refer to "Note 8 - Convertible Senior Notes, Net" for further discussion.

For the three months endedMarch 31, 2019 and 2018, 1,849,564 and 1,659,576 weighted-average unvested RSUs, respectively, were excluded from the calculation of diluted net income per share because the effect was anti-dilutive.

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Investment activity. Subsequent to the quarter ended March 31, 2019, we committed capital of $75.6 million (£58.0 million) to a first mortgage loan.

In addition, we funded approximately $41.3 million for loans closed prior to the quarter.

Loan Repayments. Subsequent to the end of the quarter, we received approximately $13.1 million from loan repayments.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss reserves and impairment. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year or any other future period.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployees Share-Based Payment Accounting" ("ASU 2018-07"). The intention of ASU 2018-07 is to expand the scope of Topic 718 to include share-based payment transactions in exchange for goods and services from nonemployees. These share-based payments will now be measured at grant-date fair value of the equity instrument issued. Upon adoption, only liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established should be remeasured through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 and is applied retrospectively. We adopted ASU 2018-07 in the first quarter of 2019 and it did not have any impact on our condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326)" ("ASU 2016-13"). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.  The guidance will replace the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The guidance is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our condensed consolidated financial statements, we expect that the adoption will result in higher provisions for potential loan losses.

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Fair Value Disclosure (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Summary of Levels in Fair Value Hierarchy of Financial Instruments

The following table summarizes the levels in the fair value hierarchy into which our financial instruments were categorized as of March 31, 2019 and December 31, 2018 ($ in thousands): 

	Fair Value as of March 31, 2019								Fair Value as of December 31, 2018
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Derivative assets, net	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700
Total	$	—	$	8,715	$	—	$	8,715	$	—	$	23,700	$	—	$	23,700

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Commercial Mortgage and Subordinate Loans, Net (Tables)

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Schedule of Loan Portfolio

Our loan portfolio was comprised of the following at March 31, 2019 and December 31, 2018 ($ in thousands):

Loan Type	March 31, 2019		December 31, 2018
Commercial mortgage loans, net	$	4,003,089	$	3,878,981
Subordinate loans, net	1,183,910		1,048,612
Total loans, net	$	5,186,999	$	4,927,593

Activity Related to Loan Investment Portfolio

Activity relating to our loan investment portfolio, for the three months endedMarch 31, 2019, was as follows ($ in thousands):

	Principal Balance			Deferred Fees/Other Items (1)			Provision for Loan Loss (2)			Carrying Value
December 31, 2018	$	4,982,514		$	(17,940	)	$	(36,981	)	$	4,927,593
New loan fundings	441,844			—			—			441,844
Add-on loan fundings (3)	110,331			—			—			110,331
Loan repayments	(322,354		)	—			—			(322,354		)
Gain (loss) on foreign currency translation	15,033			(136		)	—			14,897
Deferred fees	—			(6,069		)	—			(6,069		)
PIK interest and amortization of fees	14,321			6,436			—			20,757
March 31, 2019	$	5,241,689		$	(17,709	)	$	(36,981	)	$	5,186,999

———————

(1)Other items primarily consist of purchase discounts or premiums, exit fees and deferred origination expenses.

(2)In addition to the $37.0 million provision for loan loss, we recorded an impairment of $3.0 million against an investment previously recorded under other assets on our condensed consolidated balance sheet.

(3) Represents fundings for loans closed prior to 2019.

Schedule of Overall Statistics for the Loan Portfolio

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	March 31, 2019			December 31, 2018
Number of loans	69			69
Principal balance	$	5,241,689		$	4,982,514
Carrying value	$	5,186,999		$	4,927,593
Unfunded loan commitments (1)	$	1,039,089		$	1,095,598
Weighted-average cash coupon (2)	8.4		%	8.4		%
Weighted-average remaining term (3)	2.9 years			2.8 years

———————

(1) Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2) For floating rate loans, based on applicable benchmark rates as of the specified dates.

(3) Assumes all extension options are exercised.

Schedule of Mortgage Loans on Real Estate

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Property Type	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Hotel	$	1,330,842	25.7	%	$	1,286,590	26.1	%
Residential-for-sale: construction	631,501		12.1	%	528,510		10.7	%
Residential-for-sale: inventory	421,815		8.1	%	577,053		11.7	%
Office	956,989		18.5	%	832,620		16.9	%
Urban Predevelopment	610,888		11.8	%	683,886		13.9	%
Multifamily	521,087		10.0	%	448,899		9.1	%
Industrial	227,206		4.4	%	32,000		0.6	%
Retail Center	156,008		3.0	%	156,067		3.2	%
Healthcare	144,310		2.8	%	156,814		3.2	%
Mixed Use	114,284		2.2	%	73,957		1.5	%
Other	72,069		1.4	%	151,197		3.1	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2019				December 31, 2018
Geographic Location	Carrying Value		% of Portfolio		Carrying Value		% of Portfolio
Manhattan, NY	$	1,825,136	35.2	%	$	1,669,145	33.9	%
Brooklyn, NY	547,139		10.5	%	346,056		7.0	%
Northeast	18,751		0.4	%	23,479		0.5	%
West	635,733		12.3	%	614,160		12.5	%
Midwest	617,599		11.9	%	631,710		12.8	%
Southeast	567,794		10.9	%	559,043		11.3	%
Southwest	120,127		2.3	%	96,345		2.0	%
Mid Atlantic	110,754		2.1	%	211,775		4.3	%
United Kingdom	668,507		12.9	%	700,460		14.2	%
Other International	75,459		1.5	%	75,420		1.5	%
Total	$	5,186,999	100.0	%	$	4,927,593	100.0	%

Carrying Value of Loan Portfolio Based on Internal Risk Ratings

The following table allocates the carrying value of our loan portfolio based on our internal risk ratings at the dates indicated ($ in thousands):

	March 31, 2019					December 31, 2018
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio		Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—	%	—	$	—	—	%
2	2	58,847		1	%	3	138,040		3	%
3	64	4,915,843		95	%	63	4,573,930		93	%
4	—	—		—	%	—	—		—	%
5	3	212,309		4	%	3	215,623		4	%
	69	$	5,186,999	100	%	69	$	4,927,593	100	%
Weighted-average risk rating				3.1					3.1

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Other Assets (Tables)

3 Months Ended

Mar. 31, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Components of Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	March 31, 2019		December 31, 2018
Interest receivable	$	36,085	$	33,399
Other	455		321
Total	$	36,540	$	33,720

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Secured Debt Arrangements, Net (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Weighted Average Maturities and Interest Rates of Borrowings

At March 31, 2019 and December 31, 2018, our borrowings had the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	March 31, 2019 (2)						December 31, 2018 (2)
	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)	Maximum Amount of Borrowings		Borrowings Outstanding			Maturity (1)
JPMorgan Facility (USD)	$	1,305,435	$	873,771		June 2021	$	1,333,503	$	680,141		June 2021
JPMorgan Facility (GBP)	49,565		49,565			June 2021	48,497		48,497			June 2021
DB Repurchase Facility (USD)	858,919		475,871			March 2021	904,181		419,823			March 2021
DB Repurchase Facility (GBP)	141,081		141,081			March 2021	150,819		150,819			March 2021
Goldman Facility	500,000		233,312			November 2021	300,000		210,072			November 2020
CS Facility (USD)	188,037		188,037			September 2019	187,117		187,117			June 2019
CS Facility (GBP)	148,219		148,219			September 2019	151,773		151,773			June 2019
HSBC Facility (GBP)	49,911		49,911			December 2019	48,835		48,835			December 2019
Sub-total	3,241,167		2,159,767				3,124,725		1,897,077
less: deferred financing costs	N/A		(17,828		)		N/A		(17,555		)
Total / Weighted-Average	$	3,241,167	$	2,141,939			$	3,124,725	$	1,879,522

———————

(1) Maturity date assumes extensions at our option are exercised.

(2) Weighted-average rates as of March 31, 2019 and December 31, 2018 were USD L + 2.19% / GBP L + 2.30% and USD L + 2.17% / GBP L + 2.28%, respectively.

Remaining Maturities of Borrowings

At March 31, 2019, our borrowings had the following remaining maturities ($ in thousands):

	Less than 1 year (1)		1 to 3 years (1)		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	159,854	$	763,482	$	—	$	—	$	923,336
DB Repurchase Facility	109,142		507,810		—		—		616,952
Goldman Facility	—		233,312		—		—		233,312
CS Facility - USD	188,037		—		—		—		188,037
CS Facility - GBP	148,219		—		—		—		148,219
HSBC Facility	49,911		—		—		—		49,911
Total	$	655,163	$	1,504,604	$	—	$	—	$	2,159,767

———————

(1)Assumes underlying assets are financed through the fully extended maturity date of the facility.

Schedule of Outstanding, Maximum and Average Balances of Debt

The table below summarizes the outstanding balances at March 31, 2019, as well as the maximum and average month-end balances for the three months endedMarch 31, 2019 for our borrowings under secured debt arrangements ($ in thousands).

	As of March 31, 2019				For the three months ended March 31, 2019
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	923,336	$	1,612,510	$	929,496	$	925,679
DB Repurchase Facility	616,952		1,013,662		672,477		636,283
Goldman Facility	233,312		517,122		259,167		250,286
CS Facility - USD	188,037		254,090		188,037		187,424
CS Facility - GBP	148,219		211,468		150,811		145,814
HSBC Facility	49,911		71,141		50,784		50,296
Total	$	2,159,767	$	3,679,993

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Convertible Senior Notes, Net (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Convertible Senior Notes

The following table summarizes the terms of the Notes ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.226	8/23/2022	3.4
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	4.55
Total	$	575,000

———————

(1) Effective rate includes the effect of the adjustment for the conversion option (See endnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2) We have the option to settle any conversions in cash, shares of common stock or a combination thereof.  The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

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Derivatives, Net (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Non-Designated Foreign Exchange Forwards

The following table summarizes our non-designated foreign exchange ("Fx") forwards as of March 31, 2019:

	March 31, 2019
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	78	259,604	GBP	April 2019- December 2021	1.07

The following table summarizes our non-designated Fx forwards as of December 31, 2018:

	December 31, 2018
	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx Contracts - GBP	43	270,161	GBP	January 2019 - November 2020	0.69

Summary of Amounts Recognized on Consolidated Statements of Operations Related to Company's Derivatives

The following table summarizes the amounts recognized on the condensed consolidated statements of operations related to our derivatives for the three months endedMarch 31, 2019 and 2018 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three months ended March 31,
	Location of Gain (Loss) Recognized in Income	2019			2018
Forward currency contracts	Loss on derivative instruments - unrealized	$	(14,985	)	$	(8,859	)
Forward currency contracts	Gain (loss) on derivative instruments - realized	8,265			(2,177		)
Interest rate caps(1)	Gain on derivative instruments - unrealized	—			4
Total		$	(6,720	)	$	(11,032	)

———————

(1) With a notional amount of $33.6 million and $38.9 million at March 31, 2019, and 2018, respectively.

Summarizes Gross Asset and Liability Amounts Related to Derivatives

The following table summarizes the gross asset and liability amounts related to our derivatives at March 31, 2019 and December 31, 2018 ($ in thousands).

	March 31, 2019							December 31, 2018
	Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet		Gross Amount of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet
Forward currency contracts	9,852		(1,137		)	8,715		23,753		(53		)	23,700
Total derivative instruments	$	9,852	$	(1,137	)	$	8,715	$	23,753	$	(53	)	$	23,700

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Accounts Payable, Accrued Expenses and Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Schedule of Accounts Payable, Accrued Expense and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	March 31, 2019		December 31, 2018
Accrued dividends payable	$	69,799	$	69,033
Collateral deposited under derivative agreements	1,820		20,000
Accrued interest payable	13,488		14,208
Accounts payable and other liabilities	6,450		1,505
Total	$	91,557	$	104,746

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Share-Based Payments (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Grants, Exchanges and Forfeitures of Restricted Stock and RSUs

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the three months endedMarch 31, 2019:

	Type	Restricted Stock		RSUs		Grant Date Fair Value ($ in thousands)
Outstanding at December 31, 2018		65,697		1,852,957
	Vested	(1,419	)	—		N/A
	Forfeiture	—		(4,174	)	N/A
Outstanding at March 31, 2019		64,278		1,848,783

Below is a summary of restricted stock and RSU vesting dates as of March 31, 2019: 

Vesting Year	Restricted Stock	RSU	Total Awards
2019	40,671	887,222	927,893
2020	14,251	626,738	640,989
2021	9,356	334,823	344,179
Total	64,278	1,848,783	1,913,061

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Schedule of Dividends Declared

During 2019, we declared the following dividends:

	Three months ended
Dividend declared per share of:	March 31, 2019	March 31, 2018
Common Stock	$0.46	$0.46
Series B Preferred Stock	0.50	0.50
Series C Preferred Stock	0.50	0.50

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Carrying Value and Estimated Fair Value of Company's Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on the condensed consolidated balance sheet at March 31, 2019 and December 31, 2018 ($ in thousands):

	March 31, 2019						December 31, 2018
	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Cash and cash equivalents	$	109,343		$	109,343		$	109,806		$	109,806
Commercial first mortgage loans, net	4,003,089			4,025,760			3,878,981			3,894,947
Subordinate loans, net	1,183,910			1,187,128			1,048,612			1,047,854
Secured debt arrangements	(2,159,767		)	(2,159,767		)	(1,897,077		)	(1,897,077		)
2019 Notes	—			—			(34,278		)	(35,276		)
2022 Notes	(335,894		)	(337,762		)	(335,291		)	(326,025		)
2023 Notes	(222,770		)	(225,770		)	(222,431		)	(221,964		)

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Net Income per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Basic and Diluted Net Income per Share of Common Stock Using Two-Class Method

The table below presents the computation of basic and diluted net income per share of common stock for the three months endedMarch 31, 2019 and 2018 ($ in thousands except per share data):

	For the three months ended March 31,
	2019			2018
Basic Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Less: Dividends on participating securities	(851		)	(751		)
Basic Earnings	$	60,072		$	41,847
Diluted Earnings
Net Income	$	67,758		$	49,433
Less: Preferred dividends	(6,835		)	(6,835		)
Net income available to common stockholders	$	60,923		$	42,598
Add: Interest expense on Notes	9,262			N/A
Diluted Earnings	$	70,185		$	42,598
Number of Shares:
Basic weighted-average shares of common stock outstanding	134,607,107			110,211,853
Diluted weighted-average shares of common stock outstanding	164,683,086			111,871,429
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45		$	0.38
Diluted	$	0.43		$	0.38

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 Segment
Accounting Policies [Abstract]
Number of business segments	1

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Fair Value Disclosure - Summarizes Levels in Fair Value Hierarchy of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, net	$ 8,715	$ 23,700
Total	8,715		$ 23,700
Estimate of Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, net	8,715	23,700
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 1 [Member] | Estimate of Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, net	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	8,715		23,700
Level 2 [Member] | Estimate of Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, net	8,715	23,700
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0		$ 0
Level 3 [Member] | Estimate of Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, net	$ 0	$ 0

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Commercial Mortgage and Subordinate Loans, Net - Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value	$ 5,186,999	$ 4,927,593
Commercial Mortgage Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value	4,003,089	3,878,981
Subordinate Mortgage Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value	$ 1,183,910	$ 1,048,612

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Commercial Mortgage and Subordinate Loans, Net - Activity Relating to Loan Investment Portfolio (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Principal Balance
Loan repayments	$ (191,317)	$ (90,547)
Commercial Mortgage and Subordinated Portfolio Segment [Member]
Principal Balance
Principal balance, beginning	4,982,514
New loan fundings	441,844
Add-on loan fundings	110,331
Loan repayments	(322,354)
Gain (loss) on foreign currency translation	15,033
PIK interest and amortization of fees	14,321
Principal balance, ending	5,241,689
Deferred Fees/Other Items
Deferred fees/other items, beginning	(17,940)
Gain (loss) on foreign currency translation	(136)
Deferred fees	(6,069)
PIK interest and amortization of fees	6,436
Deferred fees/other items, ending	(17,709)
Provision for Loan Loss
Provision for loans, beginning	(36,981)
Provision for loans, ending	(36,981)
Carrying Value
Carrying value, beginning balance	4,927,593
Gain (loss) on foreign currency translation	14,897
Deferred fees	(6,069)
PIK interest and amortization of fees	20,757
Carrying value, ending balance	5,186,999
Other Assets [Member] | Commercial Mortgage and Subordinated Portfolio Segment [Member]
Carrying Value
Impairment	$ 3,000

XML

Commercial Mortgage and Subordinate Loans, Net - Additional Information (Details)	3 Months Ended					12 Months Ended
	Mar. 31, 2019 USD ($) $ / ft²	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2016 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Percentage of loan portfolio	100.00%					100.00%
Carrying value	$ 5,186,999,000	$ 4,927,593,000				$ 4,927,593,000
Payment in kind interest	14,500,000			$ 10,600,000
Proceeds from pre-payment penalties or accelerated fees	3,700,000			$ 0
Commercial Mortgage and Subordinated Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan loss provision and impairment	37,000,000					37,000,000
Amortized cost of the loan	5,186,999,000	4,927,593,000				4,927,593,000
Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Carrying value	4,003,089,000	3,878,981,000				3,878,981,000
Subordinate Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Carrying value	1,183,910,000	1,048,612,000				1,048,612,000
Retail Center - Cincinnati, OH [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Provision for loan losses and impairment		15,000,000
Amortized cost of the loan	156,000,000	156,000,000				156,000,000
Residential Condominium - Bethesda, MD [Member] | Commercial Mortgage and Subordinated Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan loss provision and impairment	10,000,000
Provision for loan losses and impairment			$ 5,000,000		$ 2,000,000
Amortized cost of the loan	24,200,000	27,200,000				27,200,000
Impairment					$ 3,000,000
Multifamily - Williston, ND [Member] | Commercial Mortgage and Subordinated Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Amortized cost of the loan	32,100,000	32,400,000				$ 32,400,000
Multifamily - Williston, ND [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Provision for loan losses and impairment							$ 10,000,000
Multifamily - Williston, ND [Member] | Subordinate Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Provision for loan losses and impairment							$ 5,000,000
Office Campus - Renton, WA [Member] | Subordinate Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Proceeds from sale of loan	75,000,000
Proceeds from sale of loan, amount funded	17,700,000
Carrying value	265,000,000
Exposure to mortgage loan	190,000,000
Exposure to mortgage loan, amount funded	$ 96,100,000
Floating Rate Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Percentage of loan portfolio	93.00%					91.00%
Net operating income [Member] | Retail Center - Cincinnati, OH [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral		$ 10,500,000				$ 10,500,000
Capitalization rate [Member] | Retail Center - Cincinnati, OH [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral, measurement input			0.068
Dollars per square foot [Member] | Residential Condominium - Bethesda, MD [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral, measurement input | $ / ft²	662
Discount rate [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral, measurement input							0.10
Discount rate [Member] | Residential Condominium - Bethesda, MD [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral, measurement input	0.15
Terminal capitalization rate [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan collateral, measurement input							0.11
Contractual Interest Rate Reduction [Member] | Retail Center - Cincinnati, OH [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance of loan restructured			$ 169,000,000
Contractual Interest Rate Reduction [Member] | London Interbank Offered Rate (LIBOR) [Member] | Retail Center - Cincinnati, OH [Member] | Commercial Mortgage Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Basis spread on variable rate			3.00%	5.50%

XML

Commercial Mortgage and Subordinate Loans, Net - Statistics for Loan Portfolio (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) loan
Receivables [Abstract]
Number of loans | loan	69	69
Principal balance	$ 5,241,689	$ 4,982,514
Carrying value	5,186,999	4,927,593
Unfunded loan commitments	$ 1,039,089	$ 1,095,598
Weighted-average cash coupon	8.40%	8.40%
Weighted-average remaining term	2 years 10 months 24 days	2 years 9 months 18 days

XML

Commercial Mortgage and Subordinate Loans, Net - Schedule of Mortgage Loans by Property Type and Geographic Distribution (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 5,186,999	$ 4,927,593
% of Portfolio	100.00%	100.00%
Hotel [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 1,330,842	$ 1,286,590
% of Portfolio	25.70%	26.10%
Residential-for-sale: construction [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 631,501	$ 528,510
% of Portfolio	12.10%	10.70%
Residential-for-sale: inventory [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 421,815	$ 577,053
% of Portfolio	8.10%	11.70%
Office [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 956,989	$ 832,620
% of Portfolio	18.50%	16.90%
Urban Predevelopment [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 610,888	$ 683,886
% of Portfolio	11.80%	13.90%
Multifamily [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 521,087	$ 448,899
% of Portfolio	10.00%	9.10%
Industrial [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 227,206	$ 32,000
% of Portfolio	4.40%	0.60%
Retail Center [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 156,008	$ 156,067
% of Portfolio	3.00%	3.20%
Healthcare [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 144,310	$ 156,814
% of Portfolio	2.80%	3.20%
Mixed Use [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 114,284	$ 73,957
% of Portfolio	2.20%	1.50%
Other [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 72,069	$ 151,197
% of Portfolio	1.40%	3.10%
Manhattan, NY [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 1,825,136	$ 1,669,145
% of Portfolio	35.20%	33.90%
Brooklyn, NY [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 547,139	$ 346,056
% of Portfolio	10.50%	7.00%
Northeast [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 18,751	$ 23,479
% of Portfolio	0.40%	0.50%
West [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 635,733	$ 614,160
% of Portfolio	12.30%	12.50%
Midwest [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 617,599	$ 631,710
% of Portfolio	11.90%	12.80%
Southeast [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 567,794	$ 559,043
% of Portfolio	10.90%	11.30%
Southwest [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 120,127	$ 96,345
% of Portfolio	2.30%	2.00%
Mid Atlantic [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 110,754	$ 211,775
% of Portfolio	2.10%	4.30%
UNITED KINGDOM
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 668,507	$ 700,460
% of Portfolio	12.90%	14.20%
Other International [Member]
Loans and Leases Receivable Disclosure [Line Items]
Carrying value	$ 75,459	$ 75,420
% of Portfolio	1.50%	1.50%

XML

Commercial Mortgage and Subordinate Loans, Net - Allocation of Carrying Value of Loan Portfolio Based on Internal Risk Ratings (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) loan
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	69	69
Carrying value | $	$ 5,186,999	$ 4,927,593
% of Portfolio	100.00%	100.00%
Weighted-average risk rating	3.1	3.1
1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	0	0
Carrying value | $	$ 0	$ 0
% of Portfolio	0.00%	0.00%
2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	2	3
Carrying value | $	$ 58,847	$ 138,040
% of Portfolio	1.00%	3.00%
3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	64	63
Carrying value | $	$ 4,915,843	$ 4,573,930
% of Portfolio	95.00%	93.00%
4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	0	0
Carrying value | $	$ 0	$ 0
% of Portfolio	0.00%	0.00%
5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of Loans | loan	3	3
Carrying value | $	$ 212,309	$ 215,623
% of Portfolio	4.00%	4.00%

XML

Loan Proceeds Held by Servicer (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Loan proceeds held by servicer	$ 0	$ 1,000,000

XML

Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Interest receivable	$ 36,085	$ 33,399
Other	455	321
Other Assets	$ 36,540	$ 33,720

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Secured Debt Arrangements, Net - Weighted Average Maturities and Interest Rates of Borrowings (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 31, 2019 GBP (£)	Dec. 31, 2018 GBP (£)	Sep. 30, 2018 USD ($)	Nov. 30, 2017 USD ($)
Debt Instrument [Line Items]
Borrowings outstanding	$ 2,141,939,000	$ 1,879,522,000
less: deferred financing costs	(17,828,000)	(17,555,000)
Line of Credit [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	3,241,167,000	3,124,725,000
Borrowings outstanding	2,141,939,000	1,879,522,000
less: deferred financing costs	$ (17,828,000)	$ (17,555,000)
Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | Weighted Average [Member]
Debt Instrument [Line Items]
Weighted Average Rate	2.19%	2.17%
Line of Credit [Member] | GBP London Interbank Offered Rate (LIBOR) [Member] | Weighted Average [Member]
Debt Instrument [Line Items]
Weighted Average Rate	2.30%	2.28%
Line of Credit [Member] | JP Morgan Chase, DB Repurchase Facility, Goldman Sachs, Credit Suisse and HSBC Facilities [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 3,241,167,000	$ 3,124,725,000
Borrowings outstanding	2,159,767,000	1,897,077,000
Line of Credit [Member] | Deutsche Bank Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings					$ 1,000,000,000
Borrowings outstanding	617,000,000		£ 108,200,000
Line of Credit [Member] | Goldman Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	500,000,000	300,000,000				$ 300,000,000.0
Borrowings outstanding	233,312,000	210,072,000
USD | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	1,305,435,000	1,333,503,000
Borrowings outstanding	873,771,000	680,141,000
USD | Line of Credit [Member] | Deutsche Bank Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	858,918,936	904,181,000
Borrowings outstanding	475,871,000	419,823,000
USD | Line of Credit [Member] | Credit Suisse Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	188,037,000	187,117,000
Borrowings outstanding	188,037,000	187,117,000
GBP | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	49,565,000	48,497,000
Borrowings outstanding	49,565,000	48,497,000
GBP | Line of Credit [Member] | Deutsche Bank Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings | £			141,081,064	£ 150,819,000
Borrowings outstanding | £			141,081,000	£ 150,819,000
GBP | Line of Credit [Member] | Credit Suisse Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	148,219,000	151,773,000
Borrowings outstanding	148,200,000	151,773,000	£ 113,700,000
GBP | Line of Credit [Member] | HSBC Facility [Member]
Debt Instrument [Line Items]
Maximum Amount of Borrowings	49,911,000	48,835,000
Borrowings outstanding	$ 49,911,000	$ 48,835,000

XML

Secured Debt Arrangements, Net - Additional Information (Details)	1 Months Ended				3 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Nov. 30, 2017 USD ($) extension	May 31, 2017 USD ($) subsidiary	Mar. 31, 2019 USD ($)	Mar. 31, 2019 GBP (£)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 GBP (£)	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Borrowings outstanding					$ 2,141,939,000		$ 1,879,522,000
Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					3,241,167,000		3,124,725,000
Securities sold under agreements to repurchase, gross					2,159,767,000
Borrowings outstanding					2,141,939,000		1,879,522,000
Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Securities sold under agreements to repurchase, gross					$ 923,336,000
Line of Credit [Member] | DB Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility									$ 1,000,000,000
Extension option					1 year
Securities sold under agreements to repurchase, gross					$ 616,952,000
Borrowings outstanding					617,000,000	£ 108,200,000
Line of Credit [Member] | Goldman Sachs Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility			$ 300,000,000.0		500,000,000		300,000,000
Number of extensions available | extension			2
Extension option			1 year
Securities sold under agreements to repurchase, gross					233,312,000
Borrowings outstanding					233,312,000		210,072,000
Line of Credit [Member] | Credit Suisse Facility [Member]
Debt Instrument [Line Items]
Term after either party notifies the other party of intention to terminate		6 months
Line of Credit [Member] | HSBC Facility [Member]
Debt Instrument [Line Items]
Securities sold under agreements to repurchase, gross					49,911,000
Line of credit, amount outstanding					49,900,000	38,300,000
JP Morgan Facility [Member] | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Number of subsidiaries | subsidiary				2
Amended and Restated JPMorgan Facility [Member] | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility				$ 1,355,000,000
Extension option				1 year
Securities sold under agreements to repurchase, gross					923,300,000	38,000,000
Repurchase Facility [Member] | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility				$ 1,250,000,000
Asset Specific Financing [Member] | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility				$ 105,000,000
USD | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					1,305,435,000		1,333,503,000
Borrowings outstanding					873,771,000		680,141,000
USD | Line of Credit [Member] | DB Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					858,918,936		904,181,000
Borrowings outstanding					475,871,000		419,823,000
USD | Line of Credit [Member] | Credit Suisse Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					188,037,000		187,117,000
Securities sold under agreements to repurchase, gross					188,037,000
Borrowings outstanding					188,037,000		187,117,000
Term after either party notifies the other party of intention to terminate	6 months
GBP | Line of Credit [Member] | JP Morgan Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					49,565,000		48,497,000
Borrowings outstanding					49,565,000		48,497,000
GBP | Line of Credit [Member] | DB Repurchase Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility | £						141,081,064		£ 150,819,000
Borrowings outstanding | £						141,081,000		£ 150,819,000
GBP | Line of Credit [Member] | Credit Suisse Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					148,219,000		151,773,000
Securities sold under agreements to repurchase, gross					148,219,000
Borrowings outstanding					148,200,000	£ 113,700,000	151,773,000
GBP | Line of Credit [Member] | HSBC Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing under facility					49,911,000		48,835,000
Borrowings outstanding					$ 49,911,000		$ 48,835,000

XML

Secured Debt Arrangements, Net - Remaining Maturities of Borrowings (Details) - Line of Credit [Member] $ in Thousands	Mar. 31, 2019 USD ($)
Line of Credit Facility [Line Items]
Less than 1 year	$ 655,163
1 to 3 years	1,504,604
3 to 5 years	0
More than 5 years	0
Total	2,159,767
JP Morgan Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	159,854
1 to 3 years	763,482
3 to 5 years	0
More than 5 years	0
Total	923,336
DB Repurchase Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	109,142
1 to 3 years	507,810
3 to 5 years	0
More than 5 years	0
Total	616,952
Goldman Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	0
1 to 3 years	233,312
3 to 5 years	0
More than 5 years	0
Total	233,312
HSBC Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	49,911
1 to 3 years	0
3 to 5 years	0
More than 5 years	0
Total	49,911
USD | CS Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	188,037
1 to 3 years	0
3 to 5 years	0
More than 5 years	0
Total	188,037
GBP | CS Facility [Member]
Line of Credit Facility [Line Items]
Less than 1 year	148,219
1 to 3 years	0
3 to 5 years	0
More than 5 years	0
Total	$ 148,219

XML

Secured Debt Arrangements, Net - Summary of Outstanding Balances, Maximum and Average Balances of Borrowings (Details) - Line of Credit [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	$ 2,159,767
Amortized Cost of Collateral	3,679,993
JP Morgan Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	923,336
Amortized Cost of Collateral	1,612,510
Maximum Month-End Balance	929,496
Average Month-End Balance	925,679
DB Repurchase Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	616,952
Amortized Cost of Collateral	1,013,662
Maximum Month-End Balance	672,477
Average Month-End Balance	636,283
Goldman Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	233,312
Amortized Cost of Collateral	517,122
Maximum Month-End Balance	259,167
Average Month-End Balance	250,286
HSBC Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	49,911
Amortized Cost of Collateral	71,141
Maximum Month-End Balance	50,784
Average Month-End Balance	50,296
USD | CS Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	188,037
Amortized Cost of Collateral	254,090
Maximum Month-End Balance	188,037
Average Month-End Balance	187,424
GBP | CS Facility [Member]
Line of Credit Facility [Line Items]
Securities sold under agreements to repurchase, gross	148,219
Amortized Cost of Collateral	211,468
Maximum Month-End Balance	150,811
Average Month-End Balance	$ 145,814

XML

Convertible Senior Notes, Net (Details)			2 Months Ended	3 Months Ended			12 Months Ended
	Mar. 15, 2019 USD ($)	Aug. 02, 2018 USD ($) shares	Sep. 30, 2018 USD ($) shares	Mar. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) offering	Dec. 31, 2017 USD ($)	Dec. 31, 2014 USD ($) offering	Oct. 05, 2018 USD ($)
Debt Instrument [Line Items]
Cash payment for debt redemption				$ 704,000		$ 0
Conversions of convertible senior notes for common stock				33,778,000
Convertible senior notes, net				558,664,000	$ 592,000,000		$ 592,000,000
2019 Notes [Member]
Debt Instrument [Line Items]
Loss on early extinguishment of debt				0			$ 2,600,000
Convertible Debt [Member]
Debt Instrument [Line Items]
Principal Amount				575,000,000
Interest expense				7,600,000		7,600,000
Non-cash interest expense				1,700,000		$ 1,800,000
Convertible Debt [Member] | 2019 Notes [Member]
Debt Instrument [Line Items]
Number of debt offerings issued | offering									2
Principal Amount									$ 254,800,000.0
Coupon Rate									5.50%
Proceeds from issuance of convertible senior notes									$ 248,600,000
Principal amount redeemed		$ 206,200,000	$ 47,900,000
Cash payment for debt redemption	$ 700,000	$ 39,300,000	$ 200,000
Convertible Debt [Member] | 2022 Notes [Member]
Debt Instrument [Line Items]
Number of debt offerings issued | offering							2
Principal Amount								$ 345,000,000
Coupon Rate								4.75%
Proceeds from issuance of convertible senior notes								$ 337,500,000
Convertible senior notes, net				335,900,000
Unamortized discount				9,100,000
Convertible Debt [Member] | 2023 Notes [Member]
Debt Instrument [Line Items]
Principal Amount										$ 230,000,000
Coupon Rate										5.375%
Proceeds from issuance of convertible senior notes					$ 223,700,000
Convertible senior notes, net				222,800,000
Unamortized discount				$ 7,200,000
Common Stock [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock (in shares) | shares				1,967,361
Conversions of convertible senior notes for common stock				$ 20,000
Common Stock [Member] | Convertible Debt [Member] | 2019 Notes [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock (in shares) | shares		10,020,328	2,775,509	1,967,361
Conversions of convertible senior notes for common stock				$ 33,800,000
Additional Paid In Capital [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock				33,758,000
Additional Paid In Capital [Member] | Convertible Debt [Member] | 2019 and 2022 Notes [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock				15,400,000
Additional Paid In Capital [Member] | Convertible Debt [Member] | 2019 Notes [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock		$ 166,000,000	$ 13,900,000
Additional Paid In Capital [Member] | Convertible Debt [Member] | 2022 Notes [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock				11,000,000
Additional Paid In Capital [Member] | Convertible Debt [Member] | 2023 Notes [Member]
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock				$ 4,400,000

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Convertible Senior Notes, Net - Summary of Note Terms (Details) - Convertible Debt [Member]		3 Months Ended	12 Months Ended
	Oct. 05, 2018 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Principal Amount		$ 575,000,000
Conversion rate basis, principal amount		$ 1,000
2022 Notes [Member]
Debt Instrument [Line Items]
Principal Amount			$ 345,000,000
Coupon Rate			4.75%
Effective Rate			5.60%
Conversion Rate		0.0502260
Remaining Period of Amortization			3 years 4 months 24 days
2023 Notes [Member]
Debt Instrument [Line Items]
Principal Amount	$ 230,000,000
Coupon Rate	5.375%
Effective Rate	6.16%
Conversion Rate		0.0487187
Remaining Period of Amortization	4 years 6 months 18 days

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Derivatives, Net - Summary of Non-Designated Foreign Exchange Forwards (Details) - GBP - Not Designated as Hedging Instrument [Member] - Forward Currency Contract [Member] $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) contract	Dec. 31, 2018 USD ($) contract
Derivative [Line Items]
Number of Contracts | contract	78	43
Aggregate Notional Amount (in thousands) | $	$ 259,604	$ 270,161
Weighted-Average Years to Maturity	1 year 26 days	8 months 9 days

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Derivatives, Net - Summary of Amounts Recognized on Consolidated Statements of Operations Related to Company's Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on derivative instruments - unrealized	$ (14,985)	$ (8,855)
Gain (loss) on derivative instruments	(6,720)	(11,032)
Forward Currency Contract [Member] | Gain (Loss) on Derivative Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on derivative instruments - realized	8,265	(2,177)
Interest Rate Cap [Member] | Gain (Loss) on Derivative Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on derivative instruments - unrealized	0	4
Notional amount	$ 33,600	$ 38,900

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Derivatives, Net - Summarizes Gross Asset and Liability Amounts Related to Derivatives (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Gross Amount of Recognized Assets	$ 9,852	$ 23,753
Gross Amounts Offset in the Condensed Consolidated Balance Sheet	(1,137)	(53)
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet	8,715	23,700
Forward Currency Contract [Member]
Derivative [Line Items]
Gross Amount of Recognized Assets	9,852	23,753
Gross Amounts Offset in the Condensed Consolidated Balance Sheet	(1,137)	(53)
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheet	$ 8,715	$ 23,700

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Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued dividends payable	$ 69,799	$ 69,033
Collateral deposited under derivative agreements	1,820	20,000
Accrued interest payable	13,488	14,208
Accounts payable and other liabilities	6,450	1,505
Total	$ 91,557	$ 104,746

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Related Party Transactions (Details) $ in Thousands, £ in Millions	1 Months Ended					3 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	May 31, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Related Party Transaction [Line Items]
Related party expenses						$ 9,613	$ 8,092
Base management fees incurred but not yet paid						9,613		$ 9,804
Commercial mortgage loans and subordinate loans, net						$ 5,186,999		4,927,593
Limited Liability Company [Member]
Related Party Transaction [Line Items]
Rate of management fees						1.50%
Extension period						1 year
Period of termination						180 days
Termination fee calculation period						24 months
Limited Liability Company [Member] | Management Fees [Member]
Related Party Transaction [Line Items]
Base management fees incurred but not yet paid						$ 9,600		9,800
Affiliated Entity [Member] | Management Fees [Member]
Related Party Transaction [Line Items]
Related party expenses						9,600	8,100
Affiliated Entity [Member] | Reimbursements [Member]
Related Party Transaction [Line Items]
Related party expenses						700	600
Commercial Mortgage Portfolio Segment [Member]
Related Party Transaction [Line Items]
Commercial mortgage loans and subordinate loans, net						$ 4,003,089		$ 3,878,981
Commercial Mortgage Portfolio Segment [Member] | Affiliated Entity [Member]
Related Party Transaction [Line Items]
Payments to acquire loans receivable	$ 6,400	£ 4.8	$ 28,200	$ 25,000	$ 25,000
Commercial mortgage loans and subordinate loans, net			$ 300,000		$ 100,000		$ 125,000

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Share-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Sep. 23, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized stock-based compensation expense	$ 3,901	$ 3,342
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	600
RSU [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	$ 27,100
LTIP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of issued and outstanding shares of common stock provides for grants of restricted common stock, restricted stock units and other equity-based awards				7.50%
Common stock, shares delivered	433,426	354,996
LTIP [Member] | RSU [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units vested	730,717	603,677
Adjustments to additional paid in capital, income tax deficiency from share-based compensation	$ 5,000	$ 4,700
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price (in dollars per share)			$ 16.66
Common stock, shares delivered	433,426	345,996

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Share-Based Payments - Summary of Grants, Exchanges and Forfeitures of Restricted Stock and RSUs (Details) - LTIP [Member]	3 Months Ended
	Mar. 31, 2019 shares
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	65,697
Vested (in shares)	(1,419)
Forfeitures (in shares)	0
Outstanding, ending balance (in shares)	64,278
RSU [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	1,852,957
Vested (in shares)	0
Forfeitures (in shares)	(4,174)
Outstanding, ending balance (in shares)	1,848,783

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Share-Based Payments - Summary of Restricted Stock and RSU Vesting Dates (Details) - LTIP [Member]	Mar. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	1,913,061
2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	927,893
2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	640,989
2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	344,179
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	64,278
Restricted Stock [Member] | 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	40,671
Restricted Stock [Member] | 2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	14,251
Restricted Stock [Member] | 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	9,356
RSU [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	1,848,783
RSU [Member] | 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	887,222
RSU [Member] | 2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	626,738
RSU [Member] | 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	334,823

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Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		2 Months Ended	3 Months Ended
	Aug. 02, 2018	Sep. 30, 2018	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			450,000,000		450,000,000
Common stock, par value (in dollars per share)			$ 0.01		$ 0.01
Preferred stock, shares authorized (in shares)			50,000,000		50,000,000
Preferred stock, par value (in dollars per share)			$ 0.01		$ 0.01
Common stock, shares issued (in shares)			136,254,352		133,853,565
Common shares outstanding (in shares)			136,254,352		133,853,565
Proceeds from issuance of common stock net of offering costs				$ 275,900
Increase to additional paid in capital as a result of conversion of 2019 Notes			$ 33,778
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares issued (in shares)			6,770,393		6,770,393
Preferred stock, shares outstanding (in shares)			6,770,393		6,770,393
Preferred stock dividend percentage			8.00%
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares issued (in shares)			6,900,000		6,900,000
Preferred stock, shares outstanding (in shares)			6,900,000		6,900,000
Preferred stock dividend percentage			8.00%
Common Stock [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares)				15,525,000
Conversions of convertible senior notes for common stock (in shares)			1,967,361
Increase to additional paid in capital as a result of conversion of 2019 Notes			$ 20
2019 Notes [Member] | Convertible Debt [Member] | Common Stock [Member]
Class of Stock [Line Items]
Shares issued, price per share (in dollars per share)			$ 17.17
Conversions of convertible senior notes for common stock (in shares)	10,020,328	2,775,509	1,967,361
Increase to additional paid in capital as a result of conversion of 2019 Notes			$ 33,800
Follow On Public Offering [Member] | Common Stock [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares)				15,525,000
Shares issued, price per share (in dollars per share)				$ 17.77

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Stockholders' Equity - Dividends Declared (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Dividends declared (in dollars per share)	$ 0.46	$ 0.46
Common stock [Member]
Class of Stock [Line Items]
Dividends declared (in dollars per share)	0.46	0.46
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared (in dollars per share)	0.5	0.5
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared (in dollars per share)	$ 0.5	$ 0.5

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Total damages including punitive	$ 70,000
Damages sought by plaintiff	700,000
Unfunded loan commitments	1,039,089	$ 1,095,598
Commercial Mortgage and Subordinated Portfolio Segment [Member]
Schedule of Equity Method Investments [Line Items]
Unfunded loan commitments	$ 1,039,100

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Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value of Company's Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Carrying Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cash and cash equivalents	$ 109,343	$ 109,806
Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Secured debt arrangements	(2,159,767)	(1,897,077)
Estimate of Fair Value Measurement [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cash and cash equivalents	109,343	109,806
Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Secured debt arrangements	(2,159,767)	(1,897,077)
Commercial Mortgage Portfolio Segment [Member] | Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	4,003,089	3,878,981
Commercial Mortgage Portfolio Segment [Member] | Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	4,025,760	3,894,947
Subordinate Mortgage Portfolio Segment [Member] | Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,183,910	1,048,612
Subordinate Mortgage Portfolio Segment [Member] | Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,187,128	1,047,854
2019 Notes [Member] | Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	0	(34,278)
2019 Notes [Member] | Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	0	(35,276)
2022 Notes [Member] | Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(335,894)	(335,291)
2022 Notes [Member] | Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(337,762)	(326,025)
2023 Notes [Member] | Carrying Value [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(222,770)	(222,431)
2023 Notes [Member] | Estimate of Fair Value Measurement [Member] | Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	$ (225,770)	$ (221,964)

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Net Income per Share - Basic and Diluted Net Income per Share of Common Stock Using Two-Class Method (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Basic Earnings
Net income	$ 67,758	$ 49,433
Preferred dividends	(6,835)	(6,835)
Net income available to common stockholders	60,923	42,598
Less: Dividends on participating securities	(851)	(751)
Basic Earnings	60,072	41,847
Diluted Earnings
Basic weighted-average shares of common stock outstanding	60,923	42,598
Add: Interest expense on Notes	9,262
Diluted Earnings	$ 70,185	$ 42,598
Number of Shares:
Basic weighted average shares of common stock outstanding (in shares)	134,607,107	110,211,853
Diluted weighted-average shares of common stock outstanding (in shares)	164,683,086	111,871,429
Earnings Per Share Attributable to Common Stockholders
Basic (in dollars per share)	$ 0.45	$ 0.38
Diluted (in dollars per share)	$ 0.43	$ 0.38

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Net Income per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities - Convertible Notes (in shares)	30,093,312
RSU [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Unvested RSUs (in shares)	1,849,564	1,659,576

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Subsequent Events (Details) - 1 months ended Apr. 24, 2019 - Subsequent Event [Member] £ in Millions, $ in Millions	USD ($)	GBP (£)
Subsequent Event [Line Items]
Funded amount of mortgages	$ 41.3
Proceeds from loan repayments	$ 13.1
Commercial Mortgage Portfolio Segment [Member]
Subsequent Event [Line Items]
Committed capital | £		£ 58.0