LOANS HELD-FOR-INVESTMENT (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of loans held for investment portfolio

The following table details overall statistics for the Company’s CRE loans held-for-investment as of March 31, 2020 and December 31, 2019 (dollar amounts in thousands):



	As of March 31,			As of December 31,
	2020			2019
Number of loans	11			11
Principal balance ⁽¹⁾	$	291,909		$	297,357
Net book value	$	278,581		$	298,880
Weighted-average interest rate⁽¹⁾	9.2		%	8.9		%
Weighted-average maximum years to maturity⁽²⁾	2.7			2.9

____________________________________


(1)	As of March 31, 2020, 100% of the Company’s loans by principal balance earned a floating rate of interest, primarily indexed to U.S. dollar LIBOR.


(2)	Maximum maturity date assumes all extension options are exercised by the borrower; however, the Company’s loans may be repaid prior to such date.

Activity relating to the Company’s loans held-for-investment portfolio was as follows (dollar amounts in thousands):



	Principal Balance			Deferred Fees / Other Items ⁽¹⁾			Loan Fees Receivable			Net Book Value
Balance, December 31, 2019	$	300,135		$	(6,047	)	$	7,542		$	301,630
Loan originations and acquisitions	332,497			(2		)	2			332,497
Principal repayments received	(6,853		)	—			—			(6,853		)
Capitalized interest ⁽²⁾	539			—			—			539
Deferred fees and other items	—			(941		)	(73		)	(1,014		)
Accretion and amortization of fees and other items	—			581			—			581
Allowance for credit losses	—			(19,779		)	—			(19,779		)
Balance, March 31, 2020	$	626,318		$	(26,188	)	$	7,471		$	607,601

____________________________________


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


(2)	Represents accrued interest on loans whose terms do not require a current cash payment of interest.

Allowance for Credit Losses

The allowance for credit losses reflects the Company’s current estimate of potential credit losses related to the loans held-for-investment included in our condensed consolidated balance sheets. Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s allowance for credit losses.

The following table presents the activity in our allowance for credit losses by loan type for the three months ended March 31, 2020 (dollar amounts in thousands):



	Mezzanine Loans		Senior Loans		Broadly Syndicated Loans		Total
Allowance for credit losses as of December 31, 2019	$	—	$	—	$	—	$	—
Transition adjustment on January 1, 2020	1,494		468		40		2,002
Provision for credit losses	13,047		341		4,389		17,777
Allowance for credit losses as of March 31, 2020	$	14,541	$	809	$	4,429	$	19,779

The Company’s initial allowance for credit losses against the loans held-for-investment of $2.0 million recorded on January 1, 2020 is reflected as a direct charge to retained earnings on the Company’s condensed consolidated statements of stockholders’ equity; however subsequent changes to the allowance for credit losses are recognized through net income on the Company’s condensed consolidated statements of operations. During the three months ended March 31, 2020, the Company recorded a $17.8 million increase in allowance for credit losses related to its loans held-for-investment, bringing the total allowance for credit losses to $19.8 million as of March 31, 2020.

The Company’s loans held-for-investment consisted of the following as of March 31, 2020 and December 31, 2019 (dollar amounts in thousands):



	As of March 31,			As of December 31,
	2020			2019
Mezzanine loans	$	140,061		$	146,060
Senior loans	153,870			152,820
Total CRE loans-held-for-investment and related receivables, net	293,931			298,880
Broadly syndicated loans	333,449			2,750
Loans-held-for-investment and related receivables, net	627,380			301,630

Less: Allowance for credit losses	(19,779		)	—
Total loans-held-for-investment and related receivables, net	$	607,601		$	301,630

Schedule of allowance for financing receivable

The following table presents the activity in our allowance for credit losses by loan type for the three months ended March 31, 2020 (dollar amounts in thousands):



	Mezzanine Loans		Senior Loans		Broadly Syndicated Loans		Total
Allowance for credit losses as of December 31, 2019	$	—	$	—	$	—	$	—
Transition adjustment on January 1, 2020	1,494		468		40		2,002
Provision for credit losses	13,047		341		4,389		17,777
Allowance for credit losses as of March 31, 2020	$	14,541	$	809	$	4,429	$	19,779