The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2023 and December 31, 2022:


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon(1)		Term (Years)(2)
March 31, 2023
Loans held-for-investment
Senior secured loans(3)	$	1,020,479,107	$	1,019,821,199	67	100.0	%	8.1	%	3.2
Allowance for credit losses	N/A		(3,357,527)
	1,020,479,107		1,016,463,672		67	100.0	%	8.1	%	3.2


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon(1)		Term (Years)(2)
December 31, 2022
Loans held-for-investment
Senior secured loans(3)	$	1,076,865,099	$	1,076,148,186	71	100.0	%	7.6	%	3.5
Allowance for credit losses	NA		(4,258,668)
	1,076,865,099		1,071,889,518		71	100.0	%	7.6	%	3.5

(1) Weighted average coupon assumes applicable one-month LIBOR of 4.70% and 4.18% and 30-day Term Secured Overnight Financing Rate ("SOFR") of 4.70% and 4.19% as of March 31, 2023 and December 31, 2022, respectively, inclusive of weighted average interest rate floors of 0.27% and 0.27%, respectively. As of March 31, 2023, 76.3% of the investments by total investment exposure earned a floating rate indexed to one-month LIBOR and 23.7% of the investments by total investment exposure earned a floating rate indexed to 30-day Term SOFR. As of December 31, 2022, 77.4% of the investments by total investment exposure earned a floating rate indexed to one-month LIBOR and 22.6% of the investments by total investment exposure earned a floating rate indexed to 30-day Term SOFR.

(2) Weighted average remaining term assumes all extension options are exercised by the borrower, provided, however, that our loans may be repaid prior to such date.

(3) As of March 31, 2023, $994,280,018 of the outstanding senior secured loans were held in VIEs and $22,183,654 of the outstanding senior secured loans were held outside of VIEs. As of December 31, 2022, $996,511,403 of the outstanding senior secured loans were held in VIEs and $75,378,115 of the outstanding senior secured loans were held outside VIEs.

Activity: For the three months ended March 31, 2023, the loan portfolio activity was as follows:


	Commercial Mortgage Loans Held-for-Investment



Balance at December 31, 2022	$	1,071,889,518

Principal payments	(52,114,321)

Amortization of purchase premium	(5,287)
Accretion of deferred loan fees	64,293
Cumulative-effect adjustment upon adoption of ASU 2016-13	(3,549,501)
Reversal of credit losses, net	178,970
Balance at March 31, 2023	$	1,016,463,672

Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2023 and December 31, 2022:


	March 31, 2023
				Amortized Cost by Year of Origination
Risk Rating	Number of Loans	Outstanding Principal		2022	2021	2019	2018	2017
1	—	$	—	—	—	—	—	—
2	5	76,325,000		75,233,321	—	—	—	—
3	49	774,200,050		59,470,781	671,105,519	4,804,061	16,669,520	19,648,386
4	12	157,279,802		66,191,572	53,937,713	36,728,544	—	—
5	1	12,674,255		—	12,674,255	—	—	—
	67	$	1,020,479,107	200,895,674	737,717,487	41,532,605	16,669,520	19,648,386


	December 31, 2022
				Amortized Cost by Year of Origination
Risk Rating	Number of Loans	Outstanding Principal		2022	2021	2019	2018	2017
1	—	$	—	—	—	—	—	—
2	11	153,933,750		85,198,084	67,999,500	—	—	—
3	55	852,474,681		101,654,140	672,421,907	42,077,193	16,672,623	19,688,071
4	3	47,448,000		15,000,000	32,448,000	—	—	—
5	2	23,008,668		—	12,750,000	—	6,000,000	—
	71	$	1,076,865,099	201,852,224	785,619,407	42,077,193	22,672,623	19,688,071

As of March 31, 2023, the average risk rating of the commercial mortgage loan portfolio was 3.2 (Moderate Risk), weighted by investment carrying value, with 83.3% of the net carrying value of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

As of December 31, 2022, the average risk rating of the commercial mortgage loan portfolio was 3.0 (Moderate Risk), weighted by investment carrying value, with 93.8% of the net carrying value of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

The average risk rating of the portfolio has increased during the three months ended March 31, 2023. The change in underlying risk rating consisted of loans that paid off with a risk rating of "2" of $46.1 million and a risk rating of "5" of $10.3 million during the three months ended March 31, 2023. Additionally, $77.6 million of loans with a risk rating of "2" transitioned to a risk rating of "3," $133.2 million of loans with a risk rating of "3" transitioned to a risk rating of "4," and $23.3 million of loans transitioned from a risk rating of "4" to a risk rating of "3".

Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2023 and December 31, 2022:

Loans Held-for-Investment


	March 31, 2023		December 31, 2022
Geography
South	45.3	%	46.6	%
Southwest	28.1		26.7
Mid-Atlantic	12.2		12.4
Midwest	7.8		8.0
West	6.6		6.3
Total	100.0	%	100.0	%


	March 31, 2023		December 31, 2022
Collateral Property Type
Multifamily	89.7	%	89.6	%
Seniors Housing and Healthcare	6.8		6.4
Self-Storage	1.9		1.8
Retail	1.6		1.6
Office	—		0.6
Total	100.0	%	100.0	%

The following table presents the changes for the three months ended March 31, 2023 and March 31, 2022 in the allowance for credit losses on the outstanding balances of the Company's loans held-for-investment:


	Three months ended
	March 31, 2023	March 31, 2022
Allowance for credit losses at beginning of period	4,258,668	—
Cumulative-effect adjustment upon adoption of ASU 2016-13	3,549,501	—
(Reversal of) credit losses	(178,970)	—
Charge offs	(4,271,672)	—
Allowance for credit losses at end of period	3,357,527	—

The following table presents the changes for the three months ended March 31, 2023 and March 31, 2022 in the provision for (release of) credit losses on the unfunded commitments of the Company's loans held-for-investment:


	Three months ended
	March 31, 2023	March 31, 2022
Allowance for credit losses at beginning of period	—	—
Cumulative-effect adjustment upon adoption of ASU 2016-13	41,939	—
(Reversal of) credit losses	(714)	—
Charge offs	—	—
Allowance for credit losses at end of period	41,225	—

We did not have any impaired loans, non-accrual loans, or loans in maturity default other than the loans discussed below as of March 31, 2023 or December 31, 2022.

In February 2023, in connection with the sale of the office building collateralizing an impaired loan by the borrower to an unaffiliated third-party, the Company accepted a discounted payoff of approximately $6.0 million on the impaired loan, which had an unpaid principal balance of $10.3 million. An allowance for credit loss of $4.3 million was recorded for this impaired loan in the year ended December 31, 2022. Upon the discounted payoff, a $4.3 million charge off against the allowance for credit losses was recorded, with de minimis impact to income in the three months ended March 31, 2023.