DRS

As submitted confidentially to the Securities and Exchange Commission on June 27, 2013

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

LADDER CAPITAL CORP

(Exact Name of Each Registrant as Specified in Its Charter)

Delaware	6500	80-0925494
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. employer identification number)

345 Park Avenue, 8th Floor

New York, New York 10154

(212) 715-3170

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Marc Fox

Chief Financial Officer

Ladder Capital Corp

345 Park Avenue, 8th Floor

New York, New York 10154

(212) 715-3170

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Joshua N. Korff, Esq. Michael Kim, Esq. Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 (212) 446-4800 (212) 446-4900 (facsimile) David J. Goldschmidt, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036 (212) 735-3000 (212) 735-2000 (facsimile)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as reasonably practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ¨

If this Form is filed to registered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):  ¨

Large accelerated filer   ¨ Accelerated filer  ¨ Non-accelerated filer  x Smaller reporting company  ¨

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Class A Common Stock, $0.001 par value per share(2)	$	$

(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

(2) Includes shares that the underwriters have the option to purchase.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell and does not seek an offer to buy these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale thereof is not permitted.

Subject to Completion, dated June 27, 2013

Preliminary Prospectus

             Shares

Ladder Capital Corp

Class A Common Stock

This is an initial public offering of shares of Class A common stock of Ladder Capital Corp, par value $0.001 per share.

Ladder Capital Corp is offering              shares of Class A common stock to be sold in the offering.

Prior to this offering, there has been no public market for our Class A common stock. It is currently estimated that the initial public offering price per share will be between $         and $        . We intend to apply to list our Class A common stock on the New York Stock Exchange (“NYSE”) under the symbol “LADR.”

We have two authorized classes of common stock: Class A and Class B. Holders of our Class A common stock and holders of our Class B common stock are each entitled to one vote per share of the applicable class of common stock all such holders will vote together as a single class. However, holders of our Class B common stock do not have any right to receive dividends or distributions upon our liquidation or winding up. Each share of Class B common stock is, from time to time, exchangeable, when paired together with one LP Unit (as defined herein) of our operating partnership, for one share of Class A common stock, subject to equitable adjustment for stock splits, stock dividends and reclassifications.

Immediately following this offering, the holders of our Class A common stock will collectively own 100% of the economic interests in Ladder Capital Corp and have     % of the voting power of Ladder Capital Corp. The holders of our Class B common stock will have the remaining     % of the voting power of Ladder Capital Corp.

We are an “emerging growth company,” as that term is defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements.

See “Risk Factors” on page 17 to read about factors you should consider before buying shares of our Class A common stock.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to us	$	$

The underwriters have the option to purchase up to an              additional shares from us at the initial public offering price, less the underwriting discount, within 30 days from the date of this prospectus.

The underwriters expect to deliver the shares of Class A common stock against payment therefore in New York, New York on or about                     , 2013.

Joint Book-Running Managers

Deutsche Bank Securities Citigroup Wells Fargo Securities BofA Merrill Lynch J.P. Morgan

Prospectus dated                     , 2013.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	17
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	69
ORGANIZATIONAL STRUCTURE	71
USE OF PROCEEDS	76
DIVIDEND POLICY	77
CAPITALIZATION	78
DILUTION	79
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION	81
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION	83
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	89
BUSINESS	124
MANAGEMENT	147
EXECUTIVE COMPENSATION	152
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	163
PRINCIPAL STOCKHOLDERS	169
DESCRIPTION OF CAPITAL STOCK	171
SHARES ELIGIBLE FOR FUTURE SALE	176
U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS	179
UNDERWRITING	183
MARKET, INDUSTRY AND OTHER DATA	191
LEGAL MATTERS	191
EXPERTS	191
WHERE YOU CAN FIND ADDITIONAL INFORMATION	191
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

Through and including                     , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to any unsold allotment or subscription.

Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor the underwriters take any responsibility for, nor can we or they provide any assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. Our business, prospects, financial condition and results of operations may have changed since that date.

i

PROSPECTUS SUMMARY

This summary highlights material information about our business and the offering of our Class A common stock. This is a summary of material information contained elsewhere in this prospectus and is not complete and does not contain all of the information that may be important to you. For a more complete understanding of our business and the offering, you should read this entire prospectus, including the section entitled “Risk Factors,” as well as the consolidated financial statements and the related notes thereto.

Unless otherwise noted or indicated by the context, the terms “Ladder,” “Company,” “we,” “our,” and “us” refer (1) prior to the consummation of the Offering Transactions described under “Organizational Structure—Offering Transactions,” to Ladder Capital Finance Holdings LLLP (“LCFH”) and its consolidated subsidiaries, and (2) after the Offering Transactions described under “Organizational Structure—Offering Transactions,” to Ladder Capital Corp and its consolidated subsidiaries, including LCFH.

Our Company

We are a leading commercial real estate finance company with a proprietary loan origination platform and an established national footprint. As a non-bank operating company, we believe that we are well-positioned to benefit from the opportunities arising from the diminished supply of commercial real estate debt capital and the substantial demand for new financings in the sector. We believe our comprehensive, fully-integrated in-house infrastructure, access to a diverse array of committed financing sources and highly experienced management team of industry veterans will allow us to continue to prudently grow our business as we endeavor to capitalize on profitable opportunities in various market conditions.

We conduct our business through three major business lines: commercial mortgage lending, investments in securities secured by first mortgage loans, and investments in selected net leased and other commercial real estate assets. We have historically been able to generate attractive risk-adjusted returns by flexibly allocating capital among these well-established, complementary business lines. We believe that we have a competitive advantage through our ability to offer a wide range of products, providing complete solutions across the capital structure to our borrowers. We apply a comprehensive best practices underwriting approach to every loan and investment that we make, rooted in management’s deep understanding of fundamental real estate values and proven expertise in these complementary business lines through multiple economic and credit cycles.

Our primary business strategy is originating conduit first mortgage loans on stabilized, income producing commercial real estate properties that can be securitized. From our inception in October 2008 through March 31, 2013, we originated $5.8 billion of commercial real estate loans, $3.7 billion of which were sold into 13 securitizations, making us, by volume, the second largest non-bank contributor of loans to CMBS securitizations in the United States for that period according to Commercial Mortgage Alert. The securitization of conduit loans has been a consistently profitable business for us and enables us to reinvest our equity capital into new loan originations or allocate it to other investments. In addition to conduit loans, we originated $1.0 billion of balance sheet loans held for investment from inception through March 31, 2013. During that timeframe, we also acquired $4.6 billion of investment grade-rated securities secured by first mortgage loans on commercial real estate and $519.1 million of selected net leased and other commercial real estate assets. These balance sheet business lines provide for a

1

stable base of net interest and rental income and are complementary to our conduit lending activities. As of March 31, 2013, we had $2.5 billion in total assets and $1.2 billion in total book equity. We generated $213.8 million of net income for the twelve months ended March 31, 2013, resulting in a return on average equity of 19.7%, as further described in “Summary Financial and Other Data.”

We seek to operate an adaptable and sustainable business model by retaining and reinvesting earnings in complementary commercial real estate investments. We are structured as a C-Corp to allow us to reinvest our equity capital, which we believe enhances our overall growth prospects and return on equity and facilitates our securitization business.

We are led by a disciplined and highly aligned management team, the core of which has worked together for more than a decade. As of March 31, 2013, our management team and chairman held equity capital accounts in our company comprising $88.9 million of book equity, or 7.7% of our total book equity. On average, our management team members have 25 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer; Michael Mazzei, President; Greta Guggenheim, Chief Investment Officer; Pamela McCormack, General Counsel and Co-Head of Securitization; Marc Fox, Chief Financial Officer; Thomas Harney, Head of Merchant Banking & Capital Markets; and Robert Perelman, Head of Asset Management.

Ladder was founded in October 2008 and we are currently capitalized by our management team and a group of leading global institutional investors, including affiliates of Alberta Investment Management Corp., GI International Partners, L.P., Ontario Municipal Employees Retirement System and TowerBrook Capital Partners. We have built our operating business to include 58 full-time industry professionals by hiring experienced personnel known to us in the commercial mortgage industry. Doing so has allowed us to maintain consistency in our culture and operations and to focus on strong credit practices and disciplined growth.

We have a diversified and flexible financing strategy supporting our business operations, including significant committed term financing from leading financial institutions. As of March 31, 2013, we had $1.3 billion of debt financing outstanding, including $209.2 million of committed secured term financing (with an additional $1.5 billion of committed secured term financing available to us), $423.0 million of financing from the Federal Home Loan Bank (FHLB) (with an additional $577.0 million of committed term financing available to us from the FHLB), $154.0 million of third party, non-recourse mortgage debt, $203.0 million of other securities financing and $325.0 million of 7.375% senior notes due 2017 (the “Notes”). As of March 31, 2013 our debt-to-equity ratio was 1.1:1.0 as we employ leverage prudently to maximize financial flexibility.

Our Market Opportunity

Commercial real estate is a capital-intensive business that relies heavily on debt capital to develop, acquire, maintain and refinance commercial properties. We believe that demand for commercial real estate debt financing, together with a reduction in the supply of traditional bank financing, presents compelling opportunities to generate attractive returns for an established, well-financed, non-bank lender like our firm.

There were $3.1 trillion of commercial mortgage loans outstanding in the United States as of March 31, 2013. The commercial real estate market faces significant near-term debt maturities,

2

with $1.7 trillion of commercial and multifamily real estate debt scheduled to mature from 2013 through 2017. The following chart shows commercial real estate debt maturities as of December 31, 2012:

Source: Trepp LLC

Improving commercial property values as well as a growing CMBS market have contributed to a more positive environment for commercial real estate assets over the last several years and created a substantial opportunity for new loan origination. New issuances in the CMBS market expanded from $11.6 billion in 2010 to $48.4 billion in 2012. In the first quarter of 2013, this growth trend showed signs of accelerating as $22.9 billion of new CMBS were issued, but is still a fraction of historical issuance levels. The following chart shows historical CMBS issuance from 1995 through the first quarter of 2013:

Source: Commercial Mortgage Alert

Additionally, many traditional commercial real estate lenders that have historically competed for loans within our target market are facing tighter capital constraints due to changes in banking regulations. Given this confluence of market dynamics, we believe that we are well positioned to capitalize and profit from these industry trends.

3

Our Business and Growth Strategies

We have steadily built our business to capitalize on opportunities in the commercial real estate finance market, generating profitable growth while creating the diversified, national lending and investment platform we have today. We intend to utilize the net proceeds of this offering and the earnings we retain to expand our business by focusing on the following strategies:

• Increasing the volume and frequency of our conduit loan securitizations.    Our primary business strategy is to originate conduit loans for sale into CMBS securitizations. We expect to be able to increase the volume and frequency of our conduit loan securitizations as a result of the growth in new CMBS issuance driven by favorable supply and demand dynamics. We believe we are well-positioned to continue to increase our market share of new U.S. CMBS issuance, which grew from 2.8% in 2010 to 3.1% in 2011, 3.3% in 2012, and 3.5% in the first quarter of 2013, while maintaining our high credit standards and pricing discipline.

• Originating more loans and increasing the average size of the loans we originate.    We expect our lending business to continue to grow as we build larger and more diverse portfolios of conduit loans for securitization, originate selected large loans for single-asset securitizations and originate additional, larger balance sheet loans held for investment. Our origination of balance sheet loans held for investment will support the growth of our conduit lending business in the future as the properties that secure these loans become eligible for longer-term conduit financing from us upon maturity. We believe that we have a competitive advantage through our ability to offer this wide range of products.

• Expanding investments in selected net leased and other commercial real estate equity.    We expect to grow our net leased and other real estate investment business through direct investments as well as investments in real estate partnerships with experienced managers and co-investors. Our net leased strategy is generally to purchase real estate, originate a non-recourse conduit loan secured by that real estate and subsequently securitize that loan. This strategy has enabled us to realize an attractive levered return on our net leased real estate investments while garnering a control position in the underlying properties. In addition, as we grow our balance sheet loan portfolio, we expect to make loans with equity-linked participations to capture a portion of any appreciation in the value of such properties.

• Pursuing other attractive opportunities.    We expect to pursue other complementary growth opportunities as they arise. Such opportunities may include growing our third party asset management business as well as opportunistic acquisitions of third party commercial real estate finance-related businesses or assets that we view as synergistic with our current operations.

Our Competitive Strengths

Our competitive strengths include:

• Recognized national lending franchise.    Ladder is a recognized and well-regarded brand name in the U.S. commercial real estate lending market. From inception through March 31, 2013, we originated $5.8 billion of commercial real estate loans, $3.7 billion of which were sold into 13 CMBS securitizations, making us the second largest non-bank

4

contributor by volume to CMBS securitizations in the United States for that period, according to Commercial Mortgage Alert. We have partnered in CMBS securitizations as a loan seller and co-manager with prominent commercial real estate platforms, including affiliates of Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC. We believe our reputation as an established lender helps us access new borrowers in our origination business, and makes us an attractive partner to investors in the CMBS market as well as our lenders and securitization partners.

• Established, fully-integrated commercial real estate finance platform.    Since our inception, we have operated an internally managed and vertically integrated commercial mortgage origination platform. Our staff of 58 full-time industry professionals specializing in loan origination, underwriting, structuring, securitization, trading, financing and asset management allows us to manage and control the loan process from origination through closing and, when appropriate, sale or other disposition. In an industry characterized by high barriers to entry, including requisite relationships with borrowers, mortgage brokers, securitization partners, investors (including CMBS investors), and financing sources, we are a well-established operating business with a comprehensive in-house infrastructure.

• Complementary, diverse business lines.    We apply our knowledge of commercial real estate across the commercial real estate investing spectrum, including to whole loans, securities and real estate equity. We believe our ability to offer borrowers a diverse range of financing products, including interim balance sheet loans, gives us a competitive advantage compared to certain of our competitors who focus more exclusively on conduit loans. In addition, our robust and diversified investment platform provides us with the ability to capture relative value opportunities among the various products in different market environments. It affords us market presence and insight, as well as the ability to flexibly allocate our capital among our business lines to hedge risk and achieve attractive risk-adjusted returns.

• Strong credit culture, experienced management team and alignment of interests.    We conduct a comprehensive credit and underwriting review prior to closing any transaction and we have not had an event of default declared or credit loss on the loans and investments we have made since our inception. Our focus on strong credit practices is supported and monitored by our experienced management team, who together with our chairman, held equity capital accounts in our company comprising $88.9 million of book equity value, representing 7.7% of book equity capital, as of March 31, 2013. Our credit culture is further reinforced by the alignment of our loan origination team, whose members are compensated based on loan profitability and performance and not on volume.

• Operating flexibility resulting from our corporate structure and moderate leverage.    Our corporate structure facilitates our securitization business and allows us to retain and reinvest earnings. In addition, our access to diverse, long term and low-cost financing, particularly via our FHLB membership, is a mark of distinction compared to our non-bank competitors, allowing us to better match the characteristics of our funding liabilities with those of our investment assets at an attractive cost of funds. We also deploy leverage prudently. As of March 31, 2013, our debt-to-equity ratio was 1.1:1.0, and we had $1.5 billion of committed, undrawn funding capacity available to finance our business and $748.6 million in unencumbered assets.

5

Our Business Segments

We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets. Our mix of business segments is designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following table summarizes the value of our investment portfolio as reported in our consolidated financial statements as of the dates indicated below:

	As of March 31, 2013		As of December 31,
			2012		2011		2010
	($ in thousands)
Loans
Conduit first mortgage loans	$	610,898	$	623,333	$	258,842	$	353,946
Balance sheet first mortgage loans		196,801		229,926		229,378		149,104
Other commercial real estate-related loans		96,407		96,392		25,819		6,754
Total loans	$	904,106	$	949,651	$	514,039	$	509,804
Securities
CMBS investments		764,748		833,916		1,664,001		1,736,043
U.S. Agency Securities investments		292,595		291,646		281,069		189,467
Total securities	$	1,057,343	$	1,125,562	$	1,945,070	$	1,925,510
Real Estate
Total real estate, net		395,678		380,022		28,835		25,669
Total investments	$	2,357,127	$	2,455,235	$	2,487,944	$	2,460,983
Cash, cash equivalents and cash collateral held by broker		123,604		109,169		138,630		105,138
Other assets		60,763		64,626		27,815		21,667
Total assets	$	2,541,494	$	2,629,030	$	2,654,389	$	2,587,788

Loans

Conduit First Mortgage Loans.    We originate conduit first mortgage loans that are secured by income-producing commercial real estate. These first mortgage loans are typically structured with fixed interest rates and five- to ten-year terms. Our loans are directly originated by an internal team that has longstanding and strong relationships with borrowers and mortgage brokers throughout the United States. We follow a rigorous investment process, which begins with an initial due diligence review; continues through a comprehensive legal and underwriting process incorporating multiple internal and external checks and balances; and culminates in approval or disapproval of each prospective investment by our Investment Committee. Conduit first mortgage loans in excess of $50.0 million also require approval of our Board of Directors’ Risk and Underwriting Committee.

Although our primary intent is to sell our conduit first mortgage loans into CMBS securitization trusts, we generally seek to maintain the flexibility to keep them on our balance sheet, offer them for sale to CMBS trusts as part of a securitization process or otherwise sell them as whole loans to third-party institutional investors. From our inception in 2008 through March 31, 2013, we originated and funded $4.8 billion of conduit first mortgage loans, and

6

securitized $3.7 billion of such mortgage loans in 13 separate transactions, including two securitizations in 2010, three securitizations in 2011, six securitizations in 2012 and two securitizations in the three months ended March 31, 2013. We generally securitize our loans together with certain financial institutions, which to date have included affiliates of Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC, and we have also completed a single-asset securitization. During 2012 and the first quarter of 2013, conduit first mortgage loans have remained on our balance sheet for a weighted average of 78 and 51 days prior to securitization, respectively. As of March 31, 2013, we held 38 first mortgage loans that were substantially available to be offered for sale into a securitization with an aggregate book value of $610.9 million. Based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 63.7% at March 31, 2013.

Balance Sheet First Mortgage Loans.    We also originate and invest in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, renovation or repositioning. These mortgage loans are structured to fit the needs and business plans of the borrowers, and generally have floating rates and terms (including extension options) ranging from one to three years. Balance sheet first mortgage loans are originated, underwritten, approved and funded using the same comprehensive legal and underwriting approach, process and personnel used to originate our conduit first mortgage loans. Balance sheet first mortgage loans in excess of $20.0 million also require the approval of our Board of Directors’ Risk and Underwriting Committee.

We generally seek to hold our balance sheet first mortgage loans for investment, or offer them for sale to our institutional bridge loan partnership. From inception through March 31, 2013, we originated and funded $966.5 million of balance sheet first mortgage loans. These investments have been typically repaid at or prior to maturity (including by being refinanced by us into a new conduit first mortgage loan upon property stabilization) or sold to our institutional bridge loan partnership. As of March 31, 2013, we held a portfolio of eight balance sheet first mortgage loans with an aggregate book value of $196.8 million. Based on the loan balances and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 58.9% at March 31, 2013.

Other commercial real estate-related loans.    We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate. As of March 31, 2013, we held $96.4 million of other commercial real estate-related loans. Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 78.2%.

Securities

CMBS Investments.    We invest in CMBS secured by first mortgage loans on commercial real estate, and own predominantly short-duration, AAA-rated securities. These investments provide a stable and attractive base of net interest income and help us manage our liquidity. We have significant in-house expertise in the evaluation and trading of CMBS, due in part to our experience in originating and underwriting mortgage loans that comprise assets within CMBS trusts, as well as our experience in structuring CMBS transactions. CMBS investments in excess of $26 million require the approval of our Board of Directors’ Risk and Underwriting Committee. As of March 31, 2013, the estimated fair value of our portfolio of CMBS investments totaled $764.7 million in 85 CUSIPs ($9.0 million average investment per CUSIP). As of that date, the

7

portfolio was comprised of 62.2% AAA-rated securities, and 37.8% of other investment grade-rated securities, and had a weighted average duration of 2.0 years.

U.S. Agency Securities Investments.    Our U.S. Agency Securities portfolio consists of securities for which the principal and interest payments are guaranteed by a U.S. government agency, such as the Government National Mortgage Association (“Ginnie Mae”), or by a GSE, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). As of March 31, 2013, the estimated fair value of our portfolio of U.S. Agency Securities was $292.6 million in 61 CUSIPs ($4.8 million average investment per CUSIP), with a weighted average duration of 3.5 years.

Real estate

Commercial real estate properties.    As of March 31, 2013, we owned 34 single tenant retail properties with an aggregate book value of $263.8 million. These properties are leased on a net basis where the tenant is generally responsible for payment of real estate taxes, building insurance and maintenance expenses. Sixteen of our properties are leased to a national pharmacy chain, and the remaining properties are leased to a national discount retailer, a regional sporting goods store, and a regional membership warehouse club. As of March 31, 2013, our net leased properties comprised a total of 1.3 million square feet, had a 100% occupancy rate, had an average age since construction of 7 years and a weighted average remaining lease term of 19.5 years. In addition, as of March 31, 2013, we owned a 13 story office building with a book value of $18.0 million through a joint venture with an operating partner.

Residential real estate.    As of March 31, 2013, we owned 408 residential condominium units at Veer Towers in Las Vegas with a book value of $114.7 million through a joint venture with an operating partner. As of March 31, 2013, the units were 66% rented and occupied. We sold 19 units during the three months ended March 31, 2013, generating aggregate gains on sale of $3.4 million, and we intend to sell the remaining units over time.

Other Investments

Institutional bridge loan partnership.    In 2011, we established an institutional partnership with a major pension fund to invest in first mortgage bridge loans that meet pre-defined criteria. Our partner owns 90% of the equity and we own the remaining 10% on a pari passu basis. Our partner retains the discretion to accept or reject individual loans and following the expiration of an exclusivity period, we retain discretion on which loans to present to the partnership. As the general partner, we earn management fees and incentive fees from the partnership. In addition, we are entitled to retain origination fees of up to 1% on loans that we sell to the partnership. As of March 31, 2013, the partnership owned $237.5 million of first mortgage bridge loan assets that were financed by $113.6 million of term debt. Debt of the partnership is nonrecourse to the limited and general partners, except for customary nonrecourse carve-outs for certain actions and environmental liability. As of March 31, 2013, the book value of our investment in the institutional partnership was $13.4 million.

Other asset management activities.    As of March 31, 2013, we also managed three separate CMBS investment accounts for private investors with combined total assets of $9.1 million. Although, as of October 2012, we are no longer purchasing any new investments for these accounts, we will continue to manage the existing investments until their full prepayment or other disposition.

8

Our Current Financing Strategies

Our financing strategies are critical to the success and growth of our business. We manage our financing to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties.

We fund our investments in commercial real estate loans and securities through multiple sources, including the $611.6 million of gross cash proceeds we raised in our initial equity private placement beginning in October 2008, the $257.4 million of gross cash proceeds we raised in our follow-on equity private placement in the third quarter of 2011, current and future earnings and cash flow from operations, existing debt facilities, and other borrowing programs in which we participate, including as a member of the FHLB.

We finance our portfolio of first mortgage loans using committed term facilities provided by multiple financial institutions, with total commitments of $1.2 billion at March 31, 2013, and through our FHLB membership. As of March 31, 2013, $81.9 million of debt was outstanding under the term facilities. We finance our securities portfolio, including CMBS and U.S. Agency Securities, through our FHLB membership, a $600.0 million credit facility from a leading domestic financial institution and other financing arrangements with numerous counterparties. As of March 31, 2013, we had total outstanding balances of $330.3 million under these facilities excluding FHLB debt. We finance our real estate investments with nonrecourse first mortgage loans. As of March 31, 2013, we had outstanding balances of $154.0 million on these nonrecourse mortgage loans. In addition to the amounts outstanding on our other facilities, we had $423.0 million of borrowings from the FHLB outstanding at March 31, 2013. We also had $325.0 million of Notes issued and outstanding as of March 31, 2013. See Note 7 to our consolidated financial statements for the three months ended March 31, 2013 included elsewhere in this prospectus for more information about our financing arrangements.

The following table shows our sources of capital, including our financing arrangements, and our investment portfolio as of March 31, 2013:

Sources of Capital	($ in thousands)
Debt:
Repurchase agreements	$	382,161
Borrowings under credit agreement		30,000
Long term financing		153,989
Borrowings from the FHLB		423,000
Senior unsecured notes		325,000
Total debt	$	1,314,150
Other liabilities		68,312
Capital (equity)		1,159,032
Total sources of capital	$	2,541,494

Assets	($ in thousands)
Loans:
Conduit first mortgage loans	$	610,898
Balance sheet first mortgage loans		196,801
Other commercial real estate-related loans		96,407
Total loans	$	904,106
Securities:
CMBS investments		764,748
U.S. Agency Securities investments		292,595
Total securities	$	1,057,343
Real estate:
Total real estate, net		395,678
Total investments	$	2,357,127
Cash, cash equivalents and cash held by broker		123,604
Other assets		60,763
Total assets	$	2,541,494

We enter into interest rate and credit spread derivative contracts to mitigate our exposure to changes in interest rates and credit spreads. We generally seek to hedge assets that have a

9

duration longer than two years, including newly-originated conduit first mortgage loans, securities in our CMBS portfolio if long enough in duration, and most of our U.S. Agency Securities portfolio. We monitor our asset profile and our hedge positions to manage our interest rate and credit spread exposures, and seek to match fund our assets according to the liquidity characteristics and expected holding periods of our assets.

We seek to maintain a debt-to-equity ratio of 3.0:1.0 or below. We expect this ratio to fluctuate during the course of a fiscal year due to the normal course of business in our conduit lending operations, in which we generally securitize our inventory of loans at intervals, and also because of changes in our asset mix, due in part to such securitizations. As of March 31, 2013, our debt-to-equity ratio was 1.1:1.0. We believe that our predominantly senior secured assets and our moderate leverage provide financial flexibility to be able to capitalize on attractive market opportunities as they arise.

From time to time, we may add financing counterparties that we believe will complement our business, although the agreements governing our indebtedness may limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness. Our amended and restated charter and by-laws do not impose any threshold limits on our ability to use leverage.

Organizational Structure

Following this offering, Ladder Capital Corp will be a holding company and its sole material asset will be a controlling equity interest in LCFH. Through its ability to appoint the board of LCFH, Ladder Capital Corp will indirectly operate and control all of the business and affairs and consolidate the financial results of LCFH and its subsidiaries. Prior to the completion of this offering, the limited liability limited partnership agreement of LCFH will be amended and restated to, among other things, modify its capital structure by replacing the different classes of interests currently held by the existing owners of LCFH with a single new class of units that we refer to as “LP Units.” In addition, the existing owners of LCFH (other than any owner of LCFH that is Ladder Capital Corp or a wholly owned subsidiary of Ladder Capital Corp) will receive a number of shares of Ladder Capital Corp Class B common stock equal to the number of LP Units held by such owner. Our Class B common stock will entitle holders to one vote per share and will vote as a single class with our Class A common stock issued in this offering. The amended and restated limited liability limited partnership agreement of LCFH (the “LLLP Agreement”) will also provide that the holders of LP Units of LCFH (other than any owner of LCFH that is Ladder Capital Corp or a wholly owned subsidiary of Ladder Capital Corp) will have the right to exchange an equal number of LP Units and our shares of Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any of our shares of Class B common stock exchanged under the exchange provisions described above will be cancelled and any LP Units exchanged under the exchange provisions described above will thereafter be owned by Ladder Capital Corp. See “Organizational Structure.”

Corporate Information

Ladder Capital Corp was incorporated on May 21, 2013 in Delaware. Our principal executive offices are located at 345 Park Avenue, 8th Floor, New York, New York 10154 and our telephone number is (212) 715-3170. We maintain a website at www.laddercapital.com. The information on our website is not intended to form a part of or be incorporated by reference into this prospectus.

10

THE OFFERING

Class A common stock offered by us             shares of Class A common stock.

Underwriter option to purchase additional shares             shares of Class A common stock.

Common stock to be outstanding             shares of Class A common stock (or             shares if the underwriters’ option is exercised in full). If all outstanding LP Units and Class B common stock held by our existing owners were exchanged for newly-issued shares of Class A common stock on a one-for-one basis,             shares of Class A common stock (or shares if the underwriters’ option is exercised in full) would be outstanding.

            shares of Class B common stock equal to one share per LP Unit (other than any LP Units owned by Ladder Capital Corp or any of its wholly owned subsidiaries).

Voting One vote per share; Class A and Class B common stock voting together as a single class.

Use of proceeds We estimate that the net proceeds to us from this offering, after deducting underwriting discounts, will be approximately $         million (or $         million if the underwriters exercise in full their option to purchase additional shares of Class A common stock). We intend to use all of the net proceeds from this offering to purchase newly issued LP Units from LCFH, as described under “Organizational Structure—Offering Transactions.”

The proceeds received by LCFH in connection with the sale of newly issued LP Units will be used to grow our loan origination and related commercial real estate business lines and for general corporate purposes. See “Use of Proceeds.”

Dividend policy We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. The declaration and payment of all future dividends, if any, will be at the discretion of our board of directors and will depend upon our financial condition, earnings, contractual conditions, restrictions imposed by our credit facilities and the indenture governing our Notes or applicable laws and other factors that our board of directors may deem relevant. See “Dividend Policy.”

Listing We intend to apply to list our Class A common stock on the New York Stock Exchange.

11

Proposed symbol LADR

Risk factors Please read the section entitled “Risk Factors” for a discussion of some of the factors you should carefully consider before deciding to invest in our Class A common stock.

Voting power held by holders of Class A     % (or 100% if all outstanding LP Units and Class B common stock held by the existing owners of LCFH were exchanged for newly-issued shares of Class A common stock on a one-for-one basis).

Voting power held by holders of Class B     % (or 0% if all outstanding LP Units and Class B common stock held by the existing owners of LCFH were exchanged for newly-issued shares of Class A common stock on a one-for-one basis).

Exchange rights of the existing owners of LCFH Prior to this offering, we will amend and restate our limited liability limited partnership agreement to provide, among other things, that each existing owner of LCFH will have the right to cause us and LCFH to exchange an equal number of their LP Units and our shares of Class B common stock for shares of Class A common stock of Ladder Capital Corp on a one-for-one basis, subject to equitable adjustment for stock splits, stock dividends and reclassifications. Any Class B shares exchanged will be cancelled. See “Certain Relationships and Related Party Transactions—Amended and Restated Limited Liability Limited Partnership Agreement of LCFH”

Tax receivable agreement Future exchanges of LP Units for our Class A common stock pursuant to the exchange rights described above are expected to result in increases in Ladder Capital Corp’s allocable tax basis in the tangible and intangible assets of LCFH. These increases in tax basis will increase (for tax purposes) depreciation and amortization deductions allocable to Ladder Capital Corp and therefore reduce the amount of tax that Ladder Capital Corp otherwise would be required to pay in the future. This increase in tax basis may also decrease gain (or increase loss) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. We will enter into a tax receivable agreement with the existing owners of LCFH whereby Ladder Capital Corp will agree to pay to the existing owners of LCFH 85% of the amount of cash tax savings, if any, in U.S. federal, state and local taxes that it realizes as a result of these increases in tax basis, increases in basis

12

from such payments and deemed interest deductions arising from such payments. Ladder Capital Corp will have the right to terminate the tax receivable agreement by making payments to the existing owners of LCFH calculated by reference to the present value of all future payments that the existing owners of LCFH would have been entitled to receive under the tax receivable agreement using certain valuation assumptions, including assumptions that any LP Units that have not been exchanged are deemed exchanged for the market value of the Class A common stock at the time of termination and that LCFH will have sufficient taxable income in each future taxable year to fully realize all potential tax savings.

Unless otherwise indicated, the information presented in this prospectus:

• assumes an initial offering price of $         per share, the midpoint of the estimated price range set forth on the cover of this prospectus;

• assumes that the underwriters’ option to purchase             additional shares of Class A common stock from us to cover over-allotments, if any, is not exercised;

• reflects             shares (or             shares if the underwriters exercise in full their option to purchase additional Class A common stock) of Class A common stock issuable upon exchange of all vested and unvested LP Units and Class B common stock outstanding immediately following this offering; and

• excludes             shares of Class A common stock reserved for future issuance under our equity incentive plan (no shares will be issued thereunder in connection with this offering).

13

SUMMARY FINANCIAL AND OTHER DATA

The following tables set forth our summary historical consolidated financial information and other data at the dates and for the periods indicated. The historical financial information and other data is that of LCFH. LCFH will be considered our predecessor for accounting purposes, and its consolidated financial statements will be our historical consolidated financial statements following this offering. The statements of operating data for the years ended December 31, 2012, 2011 and 2010 and balance sheet data as of December 31, 2012 and 2011 are derived from the audited consolidated financial statements of LCFH and related notes included in this prospectus. The statements of operating data for the three months ended March 31, 2013 and 2012 and the balance sheet data as of March 31, 2013 are derived from the unaudited consolidated financial statements of LCFH and related notes included in this prospectus. The operating data for the twelve month period ended March 31, 2013 is derived by taking the December 31, 2012 information, subtracting the March 31, 2012 information and adding the March 31, 2013 information. The unaudited consolidated financial statements of LCFH have been prepared on substantially the same basis as the audited consolidated financial statements of LCFH and include all adjustments that we consider necessary for a fair presentation of LCFH’s consolidated financial position and results of operations for all periods presented. The balance sheet data as of December 31, 2010 are derived from the audited consolidated financial statements of LCFH and related notes that are not included in this prospectus. The balance sheet data as of March 31, 2012 have been derived from the unaudited consolidated financial statements of LCFH and related notes that are not included in this prospectus.

The summary unaudited pro forma consolidated statement of income data for the fiscal year ended December 31, 2012 and the three months ended March 31, 2013 present our consolidated results of operations after giving pro forma effect to the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds,” as if such transactions occurred on January 1, 2012. The summary unaudited pro forma consolidated balance sheet data as of March 31, 2013 presents our consolidated financial position giving pro forma effect to the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds,” as if such transaction occurred on March 31, 2013. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions on the historical financial information of LCFH. The summary unaudited pro forma consolidated financial information is included for informational purposes only and does not purport to reflect the results of operations or financial position of Ladder Capital Corp that would have occurred had we been in existence or operated as a public company or otherwise during the periods presented. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial position had the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds” occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date.

The following summary financial and other data are qualified in their entirety by reference to, and should be read in conjunction with, our audited consolidated financial statements and

14

related notes and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Historical Consolidated Financial Information,” “Unaudited Pro Forma Consolidated Financial Information” and other financial information included in this prospectus. Historical results included below and elsewhere in this prospectus are not necessarily indicative of our future performance and the results for any interim period are not necessarily indicative of the operating results to be expected for the full fiscal year.

	Historical																		Pro Forma(1)
	For the twelve months ended March 31,			For the three months ended March 31,						For the year ended December 31,									For the three months ended March 31,	For the year ended December 31,
	2013			2013			2012			2012			2011			2010			2013	2012
	(unaudited)			(unaudited)															(unaudited)
	($ in thousands)
Operating Data:
Net interest income	$	93,212		$	19,939		$	26,453		$	99,726		$	97,461		$	80,427
Other income		245,964			99,342			45,399			192,021			91,786			57,452
Total net interest income and other income		339,176			119,281			71,852			291,747			189,247			137,879
Total costs and expenses		122,392			27,272			17,244			112,364			117,944			48,781
Income before earnings from investment in equity method investee		216,784			92,009			54,608			179,383			71,303			89,098
Earnings from investment in equity method investee		1,362			394			288			1,256			347			—
Income before taxes		218,146			92,403			54,896			180,639			71,650			89,098
Tax expense		4,347			2,068			305			2,584			1,510			600
Net income		213,799			90,335			54,591			178,055			70,140			88,498
Net (income) loss attributable to noncontrolling interest		26			(27	)		(4	)		49			(15	)		—
Net income attributable to preferred and common unit holders	$	213,825		$	90,308		$	54,587		$	178,104		$	70,125		$	88,498
Net income attributable to Ladder Capital Corp		—			—			—			—			—			—
Other Financial Data (unaudited):
Adjusted net income(2)	$	216,713		$	92,098		$	50,328		$	174,943		$	102,940		$	91,387
Return on average equity (net income)(3)		19.7	%		(4	)		(4	)		17.0	%		8.9	%		12.7	%
Return on average equity (adjusted net income)(3)		20.0	%		(4	)		(4	)		16.7	%		13.1	%		13.1	%
Balance Sheet Data (at end of period) (unaudited):
Tangible equity to assets		45.6	%		45.6	%		38.8	%		41.9	%		37.3	%		27.8	%
Unrestricted cash and investment grade securities as % of assets		42.9	%		42.9	%		76.6	%		44.5	%		76.4	%		77.4	%
Amount of undrawn committed financings	$	1,520,834		$	1,520,834		$	861,200		$	1,195,612		$	952,616		$	738,241
Cash Flow Data:
Net cash provided by (used in):
Operating activities	$	(58,075	)	$	149,591		$	99,251		$	(108,415	)	$	340,302		$	(231,274	)
Investing activities		310,746			42,399			14,963			283,310			(320,699	)		(434,396	)
Financing activities		(359,178	)		(202,098	)		(57,370	)		(214,450	)		(12,564	)		568,717
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	33,688		$	33,688		$	140,194		$	43,796		$	83,350		$	76,311
Real estate securities		1,057,343			1,057,343			1,898,396			1,125,562			1,945,070			1,925,510
Mortgage loan receivables		904,016			904,106			486,668			949,651			514,038			509,804
Real estate, net		395,678			395,678			49,856			380,022			28,835			25,669
Total assets		2,541,494			2,541,494			2,661,540			2,629,030			2,654,389			2,587,788
Total debt outstanding		1,314,150			1,314,150			1,580,800			1,484,672			1,615,641			1,839,720
Total liabilities		1,382,462			1,382,462			1,628,042			1,527,840			1,665,326			1,869,282
Total capital (equity)		1,159,032			1,159,032			1,033,498			1,101,190			989,062			718,506

15

(1) See ”Unaudited Pro Forma Consolidated Financial Information.”

(2) We present adjusted net income, which is a non-GAAP measure, as a supplemental measure of our performance. We define adjusted net income as net income attributable to preferred and common unit holders of LCFH (or, on a pro forma basis, net income attributable to Ladder Capital Corp) adjusted to add back real estate depreciation and amortization, eliminate the impact of derivative gains and losses related to the hedging of assets on our balance sheet as of the end of the specified accounting period and add back non-cash stock-based compensation. As more fully discussed in Note 2 to the consolidated financial statements included elsewhere in this prospectus, we do not designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, our derivatives are recognized currently in our income statement. However, fluctuations in the fair value of the related assets are not included in our income statement. We believe that excluding these specifically identified gains and losses adjusts for timing differences between when we recognize changes in the fair values of our assets and derivatives which we use to hedge asset values.

Set forth below is a reconciliation of net income attributable to preferred and common unit holders in LCFH (or, on a pro forma basis, net income attributable to Ladder Capital Corp) to adjusted net income:

	Historical																Pro Forma
	For the twelve months ended March 31, 2013			For the three months ended March 31, 2013			For the three months ended March 31, 2012			For the Year Ended December 31,							For the three months ended March 31, 2013	For the year ended December 31, 2012
										2012			2011		2010
	($ in thousands)
Net income attributable to preferred and common unit holders	$	213,825		$	90,308		$	54,587		$	178,104		$	70,125	$	88,498
Real estate depreciation and amortization		5,866			2,987			214			3,093			703		263
Adjustments for unrecognized derivative results(a)		(5,823	)		(1,672	)		(4,511	)		(8,662	)		31,961		2,452
Non-cash stock-based compensation		2,845			475			38			2,408			151		174
Adjusted net income	$	216,713		$	92,098		$	50,328		$	174,943		$	102,940	$	91,387

(a) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of unrecognized derivative results to net results in our financial statements included herein.

We present adjusted net income because we believe it assists investors in comparing our performance across reporting periods on a consistent basis by excluding non-cash expenses as well as an item that makes such comparisons less relevant due to timing differences related to changes in the values of assets and derivatives. In addition, we use adjusted net income: (i) to evaluate our earnings from operations and (ii) because management believes that it may be a useful performance measure for us.

Adjusted net income has limitations as an analytical tool. Some of these limitations are:

• adjusted net income does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

• other companies in our industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted net income should not be considered in isolation or as a substitute for net income attributable to preferred and common unit holders of LCFH (or, on a pro forma basis, net income attributable to Ladder Capital Corp) or other performance measures calculated in accordance with GAAP.

(3) We present return on average equity as a supplemental measure for our performance. We define return on average equity as net income attributable to preferred and common unit holders divided by the average of our total partners’ capital at the end of the quarter and for the four preceding quarters. Return on average equity (adjusted net income) is calculated the same way except it uses adjusted net income as the numerator.

(4) Information is not included for the three month periods as it would not be meaningful over such a short period of time.

16

RISK FACTORS

Investing in our Class A common stock involves substantial risks. In addition to the other information in this prospectus, you should carefully consider the following risk factors before investing in our Class A common stock. If any of the risks we describe below occurs, our business, financial condition or results of operations could be materially and adversely affected. The market price of our Class A common stock could decline if one or more of these risks or uncertainties actually occur, causing you to lose all or part of your investment in our Class A common stock. While we believe these risks and uncertainties are most important for you to consider, we may face other risks or uncertainties which may adversely affect our business. Certain statements in “Risk Factors” are forward-looking statements. See “Information Regarding Forward-Looking Statements” included elsewhere in this prospectus.

Risks Related to Our Operations

Our business model may not be successful. We may change our investment strategy and financing policy in the future and any such changes may not be successful.

There can be no assurance that any business model or business plan of ours will prove accurate, that our management team will be able to implement such business model or business plan successfully in the future or that we will achieve our performance objectives. Any business model of ours, as well as any assumptions and predictions thereof, merely reflect our assessment of the short and long-term prospects of the business, finance and real estate markets in which we operate and should not be relied upon in determining whether to invest in our Class A common stock. We have discretion regarding the assets we originate or acquire, and our management team is authorized to follow very broad investment guidelines and has great latitude within those guidelines to determine which assets make proper investments for us, in each case subject to any restrictions set forth in any limited liability limited partnership agreements or other of our applicable agreements. You will not be able to evaluate the nature of and the terms on which we will originate, acquire, invest in, securitize, warehouse, hold or dispose of particular assets.

Our Board of Directors may change our investment, financing or other policies and this may harm our business.

Our Board of Directors generally determines our operational policies and may amend or revise our policies, including policies with respect to acquisitions, dispositions, joint ventures, growth, operations, capital structure, indebtedness, capitalization and dividends, or approve transactions that deviate from these policies. We may change our target asset guidelines and investment, leverage, financing and operating strategies at any time, which could result in our making investments that are different in type from, and possibly riskier than, the investments as described to, or expected by, any potential investor. Operational policy changes or changes in target asset guidelines and investment, leverage, financing and operating strategies may increase our exposure to interest rate risk, default risk, financing risk, business risk, legal risk, tax risk, real estate market fluctuations and other risks.

We hold certain of our investments through our subsidiary, Ladder Capital Realty Finance Trust (the “Ladder REIT”) and its subsidiaries. The Ladder REIT is a real estate investment trust (“REIT”). The board of the Ladder REIT may determine that such REIT should conduct its business through a taxable REIT subsidiary (“TRS”), should cease to maintain its REIT qualification or should wind down and liquidate if the commercial real estate market does not constitute an attractive investment strategy for a REIT.

17

We are dependent on our management team, and loss of any of these individuals could adversely affect our ability to operate profitably.

We depend to a significant extent upon the skills and experience of our management team. The loss of the services of one or more of such individuals could have an adverse effect on our operations, and in such case we will be subject to the risk that no suitable replacement could be found. Furthermore, any termination of a member of the management team may be difficult and costly for us and create obligations for us to the departing individual. In the future, if we are unable to staff our management team fully with individuals who possess the skills and experience necessary to excel in their positions on the management team, we may be adversely affected. Furthermore, if one or more members of our management team is no longer employed by us, financial institutions providing any financing arrangements to us may not provide future financing to us, which could materially and adversely affect our business.

We may not be able to hire and retain qualified loan originators or grow and maintain our relationships with key loan brokers, and if we are unable to do so, our ability to implement our business and growth strategies could be limited.

We depend on our loan originators to generate borrower clients by, among other things, developing relationships with commercial property owners, real estate agents and brokers, developers and others, which we believe leads to repeat and referral business. Accordingly, we must be able to attract, motivate and retain skilled loan originators. The market for loan originators is highly competitive and may lead to increased costs to hire and retain them. We cannot guarantee that we will be able to attract or retain qualified loan originators. If we cannot attract, motivate or retain a sufficient number of skilled loan originators, or even if we can motivate or retain them but at higher costs, we could be materially and adversely affected. We also depend on our network of loan brokers, who generate a significant portion of our loan originations. While we strive to cultivate long-standing relationships that generate repeat business for us, brokers are free to transact business with other lenders and have done so in the past and will do so in the future. Our competitors also have relationships with some of our brokers and actively compete with us in bidding on loans shopped by these brokers. We also cannot guarantee that we will be able to maintain or develop new relationships with additional brokers.

As an independent company, we may, in the future, have difficulty finding partners in distribution, securitization and financing, may struggle to generate new business, may face difficulties in obtaining required authorizations or licenses to do business and may face considerable competition from other firms in our line of business.

We often rely on other third-party companies for assistance in origination, warehousing, distribution, securitization and other finance-related and loan-related activities. Although our management team anticipates continuing to partner with other firms in order to conduct such activities, we may not be successful at developing or maintaining such partnerships, or the terms of such partnerships may become less favorable, and failure to properly develop such partnerships or maintain such partnerships on favorable terms may adversely affect our business.

In order to implement our business strategies, we may be required to obtain, maintain or renew certain licenses and authorizations (including “doing business” authorizations and licenses with respect to loan origination) from certain governmental entities. While we do not anticipate any delays or other complications relating to such licenses and authorizations, there is no assurance that any particular license or authorization will be obtained, maintained or renewed quickly or at all. Any failure of ours to obtain, maintain or renew such authorizations or licenses may adversely affect our business.

18

Competition in the commercial real estate finance sector may limit the availability of loan origination and investment opportunities, which could, in turn, negatively affect our business. Other companies may have business objectives that overlap with ours. That overlap may create competition for business opportunities. We face competition from finance companies, REITs, commercial banks and thrift institutions, investment banks, insurance companies, hedge funds and others. We cannot assure you that the competitive pressures we face will not have an adverse effect on our business.

We may not be able to maintain our joint ventures and strategic alliances.

Some of our business may be conducted through non wholly-owned subsidiaries, joint ventures in which we share control (in whole or in part) and strategic alliances formed by us with other strategic or business partners that we do not control. There can be no assurance that any of these strategic or business partners will continue their relationships with us in the future or that we will be able to pursue our stated strategies with respect to non wholly-owned subsidiaries, joint ventures, strategic alliances and the markets in which we operate. Our ability to influence our partners in joint ventures or strategic alliances may be limited, and non-alignment of interests on various strategic decisions in joint ventures or strategic alliances may adversely impact our business. Furthermore, joint venture or strategic alliance partners may (i) have economic or business interests or goals that are inconsistent with ours; (ii) take actions contrary to our policies or objectives; (iii) undergo a change of control; (iv) experience financial and other difficulties; or (v) be unable or unwilling to fulfill their obligations under a joint venture or strategic alliance, which may affect our financial conditions or results of operations.

Our business is highly leveraged, which could lead to greater losses than if we were not as leveraged.

We do and, in the future, intend to use financial leverage in executing our business plan. Such borrowings may take the form of “financing facilities” such as bank credit facilities, credit facilities from government agencies (including the FHLB), repurchase agreements and warehouse lines of credit, which are secured revolving lines of credit that we utilize to warehouse portfolios of real estate instruments until we exit them through securitization. We do and, in the future, intend to enter into securitization and other long-term financing transactions and to use the proceeds from such transactions to reduce the outstanding balances under these financing facilities. However, such agreements may include a recourse component. Further, any financing facilities that we currently have or may use in the future to finance our assets may require us to provide additional collateral or pay down debt if the market value of our assets pledged or sold to the provider of the credit facility or the repurchase agreement counterparty decline in value. In addition, our borrowings are generally based on floating interest rates, the fluctuation of which could adversely affect our business and results of operations. Our use of leverage in a market that moves adversely to our business interests could result in a substantial loss to us, which would be greater than if we were not leveraged.

We may issue more unsecured corporate bonds in the future depending on the financing requirements of our business and market conditions. Our failure to maintain the credit ratings on our debt securities could negatively affect our ability to access capital and could increase our interest expense. The credit rating agencies periodically review our capital structure and the quality and stability of our earnings. Deterioration in our capital structure or the quality and stability of our earnings could result in a downgrade of the credit ratings on our Notes or other debt securities. Any negative ratings action could constrain the capital available to us and could limit our access to funding for our operations. We are dependent upon our ability to access capital at rates and on terms we determine to be attractive. If our ability to access capital

19

becomes constrained, our interest costs could increase, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Our financial statements may be materially affected if our estimates, including loan loss reserves, prove to be inaccurate as a result of our limited experience in making critical accounting estimates.

Financial statements prepared in accordance with GAAP require the use of estimates, judgments and assumptions that affect the reported amounts. Different estimates, judgments and assumptions reasonably could be used that would have a material effect on the financial statements, and changes in these estimates, judgments and assumptions are likely to occur from period to period in the future. Significant areas of accounting requiring the application of management’s judgment include, but are not limited to (i) assessing the adequacy of the allowance for loan losses, (ii) determining the fair value of investment securities and (iii) assessing other than temporary impairments on real estate. These estimates, judgments and assumptions are inherently uncertain, especially in turbulent economic times, and, if they prove to be wrong, then we face the risk that charges to income will be required.

The timing of our securitization activities and other factors may greatly affect our quarterly financial results.

We expect to distribute the loans we originate through securitizations, and, upon completion of a securitization, we will recognize certain non-interest revenues and cease to earn net interest income on the securitized loans. Our quarterly revenue, operating results and profitability have varied substantially from quarter to quarter based on the frequency, volume and timing of our securitizations. For 2012, our total non-interest revenues represented approximately 65.8% of our net revenues, and approximately 80.5% of our total non-interest revenues were recognized in connection with the completion of our six securitizations. For the quarter ended March 31, 2013, our total non-interest revenues represented approximately 83.3% of our net revenues, and approximately 85.7% of our total non-interest revenues were recognized in connection with the completion of our two securitizations. Moreover, we completed one securitization in each of the second and third quarters of 2012 and two securitizations in the first quarter of 2013. Our securitization activities will be affected by a number of factors, including our loan origination volumes, changes in loan values, quality and performance during the period such loans are on our books and conditions in the securitization and credit markets generally and at the time we seek to launch and complete our securitizations. Additional factors that could cause our quarterly performance to fluctuate include, among others, the availability of loan origination and investment opportunities; declines in commercial real estate construction; our ability to raise additional capital; and general economic and political conditions. As a result of these quarterly variations, quarter-to-quarter comparisons of our operating results may not provide an accurate comparison of our current period results of operations. If securities analysts or investors focus on such comparative quarter-to-quarter performance, our stock price performance may be more volatile than if such persons compared a wider period of results of operations.

We are dependent on communications and information systems, the failure of which could negatively impact our operations and business activities.

Our business is highly dependent on our communications and information systems and those of our counterparties. Any failure or interruption of these systems, such as due to malware attacks or severe weather related damages, could cause delays or other problems in our securities trading activities and other operations and business activities.

20

If we fail to maintain an effective system of integrated internal controls, we may not be able to accurately report our financial results.

We depend on our ability to produce accurate and timely financial statements in order to run our business. If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis by the Company’s internal controls. A significant deficiency is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of a registrant’s financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected, on a timely basis by the Company’s internal controls.

Although we continuously monitor the design, implementation and operating effectiveness of our internal controls over financial reporting, there can be no assurance that significant deficiencies or material weaknesses will not occur in the future. If we fail to maintain effective internal controls in the future, it could result in a material misstatement of our financial statements that may not be prevented or detected on a timely basis, which could cause stakeholders to lose confidence in our reported financial information.

We may enter into and/or acquire similar businesses in the future, which may pose additional risks not currently faced by our existing business and investments.

We may enter into and/or acquire similar businesses in the future that are related, complementary or similar to those we engage in today. While we expect to continue to evaluate potential similar businesses that might augment our businesses and investments, we may be unable to successfully integrate businesses we enter into or acquire, and such similar businesses may fail to achieve the financial results we expected. Integrating completed acquisitions into our existing operations involves numerous short-term and long-term risks, including diversion of our management’s attention, failure to retain key personnel, and failure of the similar business to be financially successful. In addition, we cannot be certain of the extent of any unknown or contingent liabilities of any acquired business, including liabilities for failure to comply with applicable laws. We may incur material liabilities for past activities of acquired businesses. Also, depending on the location of the acquired business, we may be required to comply with laws and regulations that may differ from those of the jurisdictions in which our operations are currently conducted. Our inability to successfully integrate businesses we acquire, or if such businesses do not achieve the financial results we expect, may increase our costs and have a material adverse impact on our financial condition and results of operations.

We may be subject to “lender liability” litigation.

In recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or stockholders. We cannot assure you that such claims will not arise or that we will not be subject to significant liability if a claim of this type were to arise.

21

Litigation may adversely affect our business, financial condition and results of operations.

We are, from time to time, subject to legal and regulatory requirements applicable to our business and industry. We may be subject to various legal proceedings and these proceedings may range from actions involving a single plaintiff to class action lawsuits. Litigation can be lengthy, expensive and disruptive to our operations and results cannot be predicted with certainty. There may also be adverse publicity associated with litigation, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations.

There can be no assurance that our corporate insurance policies will mitigate all insurable losses, costs or damages to our business.

Based on our history and type of business, we believe that we maintain adequate insurance coverage to cover probable and reasonably estimable liabilities should they arise. However, there can be no assurance that these estimates will prove to be sufficient, nor can there be any assurance that the ultimate outcome of any claim or event will not have a material negative impact on our business prospects, financial position, results of operations or cash flows.

As an “emerging growth company” under the JOBS Act we are eligible to take advantage of certain exemptions from various reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We have not made a decision whether to take advantage of all of these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find our securities less attractive as a result. The result may be a less active trading market for our securities and our security prices may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

22

Market Risks Related to Real Estate Securities and Loans

We have a concentration of investments in the real estate sector, which may increase our exposure to the risks of certain economic downturns.

We operate largely in the commercial real estate area. Such concentration in one economic sector may increase the volatility of our returns and may also expose us to the risk of economic downturns in this sector to a greater extent than if our portfolio also included other sectors of the economy. As a result, economic downturns in this sector could have an adverse effect on our business. In addition, increases in long-term interest rates could decrease the demand for and, therefore, the value of our real properties.

We operate in a highly competitive market for lending and investment opportunities, which may limit our ability to originate or acquire desirable loans and investments in our target assets.

We operate in a highly competitive market for lending and investment opportunities. A number of entities compete with us to make the types of loans and investments that we seek to make. Our profitability depends, in large part, on our ability to originate or acquire target assets at attractive prices. In originating or acquiring target assets, we compete with a variety of institutional lenders and investors and many other market participants, including specialty finance companies, REITs, commercial banks and thrift institutions, investment banks, insurance companies, hedge funds and other financial institutions. Many competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do. Several other finance companies have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of funds and access to funding sources that may not be available to us. Many of our competitors are not subject to the operating constraints associated with REIT tax compliance, to which our REIT subsidiary is subject, or maintenance of an exemption from the Investment Company Act. Furthermore, competition for originations of, and investments in, our target assets may lead to the yield of such assets decreasing, which may further limit our ability to generate desired returns. Also, as a result of this competition, desirable loans and investments in specific types of target assets may be limited in the future and we may not be able to take advantage of attractive lending and investment opportunities from time to time. We can offer no assurance that we will be able to identify and originate loans or make any or all of the types of investments that are described in this prospectus.

Our investment guidelines and underwriting guidelines may restrict our ability to compete with others for desirable commercial mortgage loan origination and acquisition opportunities.

We have investment guidelines and underwriting guidelines with respect to commercial mortgage loan origination and acquisition opportunities. Additionally, under our credit facilities, the lenders have the right to review the assets which we are seeking to finance and approve the purchase and financing of such assets in their sole discretion. These investment and underwriting guidelines and lender approvals may restrict us from being able to compete with others for commercial mortgage loan origination and acquisition opportunities and these guidelines may be stricter than the guidelines employed by our competitors. As a result, we may not be able to compete with others for desirable commercial mortgage loan origination and acquisition opportunities. In addition, these investment and underwriting guidelines and approvals impose conditions and limitations on our ability to originate certain of our target assets, including, in particular, restrictions on our ability to originate junior mortgage loans, mezzanine loans and preferred equity investments.

23

Deterioration of the real estate markets may significantly increase the likelihood of payment delinquencies, foreclosures and losses on our loans, which would materially and adversely affect our business, financial condition and results of operations.

We believe the risks associated with our business will be more severe during periods of economic slowdown or recession if these periods are accompanied by declining real estate values. Declining real estate values may reduce the level of new mortgage and other real estate-related loan originations since borrowers often use appreciation in the value of their existing properties to support the purchase or investment in additional properties. Borrowers may also be less able to pay principal and interest on our loans if the value of real estate weakens. Further, declining real estate values significantly increase the likelihood that we will incur losses on our loans in the event of default because the value of our collateral may be insufficient to cover our cost on the loan. Any sustained period of increased payment delinquencies, foreclosures or losses could adversely affect both our net interest income from loans in our portfolio as well as our ability to originate/acquire/sell loans, which would materially and adversely affect our results of operations, financial condition, liquidity and business.

Our earnings may decrease because of changes in prevailing interest rates.

Our primary interest rate exposures relate to the yield on our assets and the financing cost of our debt, as well as the interest rate swaps that we utilize for hedging purposes. Interest rates are highly sensitive to many factors beyond our control, including but not limited to governmental monetary and tax policies, domestic and international economic and political considerations. Interest rate fluctuations present a variety of risks, including the risk of a mismatch between asset yields and borrowing rates, variances in the yield curve and fluctuating prepayment rates, and such fluctuations may adversely affect our income and may generate losses.

Prepayment rates on mortgage loans cannot be predicted with certainty and prepayments may result in losses to the value of our assets.

The frequency at which prepayments (including voluntary prepayments by the borrowers and liquidations due to defaults and foreclosures) occur on our investments can adversely impact our business, and prepayment rates cannot be predicted with certainty, making it impossible to completely insulate us from prepayment or other such risks. Any adverse effects of prepayments may impact our portfolio in that particular investments, which may experience outright losses in an environment of faster actual or anticipated prepayments or may underperform relative to hedges that the management team may have constructed for such investments (resulting in a loss to our overall portfolio). Additionally, borrowers are more likely to prepay when the prevailing level of interest rates falls, thereby exposing us to the risk that the prepayment proceeds may be reinvested only at a lower interest rate than that borne by the prepaid obligation.

Terrorist attacks and other acts of violence or war may affect the real estate industry generally and our business, financial condition and results of operations.

We cannot predict the severity of the effect that potential future terrorist attacks could have on us. Any future terrorist attacks, the anticipation of any such attacks, the consequences of any military or other response by the United States and its allies, and other armed conflicts could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. We may suffer losses as a result of the adverse impact of any future attacks and these losses may adversely impact our performance. A prolonged economic slowdown, a recession or declining real estate values could impair the performance of our assets and harm our financial condition and results of operations, increase

24

our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. The economic impact of such events could also adversely affect the credit quality of some of our loans and investments and the property underlying our securities. Losses resulting from these types of events may not be fully insurable.

The events of September 11, 2001 created significant uncertainty regarding the ability of real estate owners of high profile assets to obtain insurance coverage protecting against terrorist attacks at commercially reasonable rates, if at all. With the enactment of the Terrorism Risk Insurance Act of 2002 (the “TRIA”) and the subsequent enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2007, which extended the TRIA through the end of 2014, insurers must make terrorism insurance available under their property and casualty insurance policies, but this legislation does not regulate the pricing of such insurance. The absence of affordable insurance coverage may adversely affect the general real estate lending market, lending volume and the market’s overall liquidity and may reduce the number of suitable opportunities available to us and the pace at which we are able to acquire assets. If the properties underlying our interests are unable to obtain affordable insurance coverage, the value of our interests could decline, and in the event of an uninsured loss, we could lose all or a portion of our assets.

Risks Related to Our Portfolio

Income from, and the value of, our investments may be adversely affected by many factors that are beyond our control.

The yields available from investments in the real estate sector generally depend on the structure of the investment and the success of the property or properties which effectively serve as collateral for such investments as evidenced by the amount of net income earned and capital appreciation generated by such properties. Income from, and the value of, our investments may be adversely affected by many factors that are beyond our control, including:

• adverse changes in international, national and local economic and market conditions;

• changes in interest rates and in the availability, costs and terms of financing;

• changes in generally accepted accounting principles;

• changes in governmental laws and regulations, fiscal policies and zoning and other ordinances and costs of compliance with laws and regulations;

• the ongoing need for capital improvements, particularly in older structures;

• changes in operating expenses; and

• civil unrest, terrorism, acts of war, nuclear or radiological disasters and natural disasters, including earthquakes, hurricanes, tornados, tsunamis and floods, which may result in uninsured and underinsured losses.

In addition to other analytical tools, our management team utilizes financial models to evaluate loans and real estate assets, the accuracy and effectiveness of which cannot be guaranteed.

In all cases, financial models are only estimates of future results which are based upon assumptions made at the time that the projections are developed. There can be no assurance that management’s projected results will be obtained and actual results may vary significantly from the projections. General economic and industry-specific conditions, which are not predictable, can have an adverse impact on the reliability of projections.

25

The vast majority of the mortgage loans that we originate or purchase are nonrecourse loans and the assets securing the loans may not be sufficient to protect us from a partial or complete loss if the borrower defaults on the loan.

Payments under nonrecourse mortgage loans are not insured, and are generally either not guaranteed or should not be considered to be, by any person or entity. If a default occurs, our remedies generally are limited to foreclosing against the borrower and/or the specific mortgaged properties and other assets that have been pledged to secure the mortgage loan, subject to, in some cases, customary nonrecourse carveouts either to the borrower and/or its sponsor. Even if a mortgage loan is recourse to the borrower (or if a nonrecourse carveout to the borrower applies), in most cases, the borrower’s assets are limited primarily to its interest in the related mortgaged property. Such real property may not be sufficient to protect us from a partial or complete loss if the borrower defaults on the loan. Payment of amounts due under the mortgage loan prior to the maturity date is consequently dependent primarily on the sufficiency of the net operating income of the property. Even if the mortgage loan provides for limited recourse to a principal or affiliate of the related borrower, there is no assurance of any recovery from such principal or affiliate will be made or that such principal’s or affiliate’s assets would be sufficient to pay any otherwise recoverable claim.

The volatility of real property could have a material adverse effect on our business, financial position and results of operations.

While many of our loans will be secured by a mortgage on specified real property of the borrower, there is no assurance that the real property securing any particular loan will protect us from suffering a partial or complete loss if the loan becomes non-performing and we move to foreclose on the property. The real property securing our loans is subject to inherent risks that may limit our ability to recover the principal of a non-performing loan as lender and may affect our ability to repay as owner and borrower. Such risks include, without limitation:

• changes in general or local market conditions;

• changes in the occupancy or rental rates of the property or, for a property that requires new leasing activity, a failure to lease the property in accordance with the projected leasing schedule;

• limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of a property difficult;

• development projects that experience cost overruns or otherwise fail to perform as projected;

• unanticipated increases in real estate taxes and other operating expenses;

• challenges to the borrower’s claim of title to the real property;

• environmental considerations;

• zoning laws;

• other governmental rules and policies;

• unanticipated structural defects or costliness of maintaining the property;

• uninsured losses, such as possible acts of terrorism;

• a decline in the operational performance of a facility on the real property (such facilities may include multifamily rental facilities, office properties, retail facilities, hospitality facilities, healthcare-related facilities, industrial facilities, warehouse facilities, restaurants, mobile home facilities, recreational or resort facilities, arenas or stadiums, religious facilities, parking lot facilities or other facilities); and

• severe weather-related damage to the property and/or its operation.

26

In instances where the borrower is acting as a landlord on the underlying property as we do for our selected net leased and other commercial real estate assets, the ability of such borrower to satisfy the debt obligation we hold will depend on the performance and financial health of the underlying tenants, which may be difficult for us to assess or predict. In addition, as the number of tenants with respect to a commercial property decreases or as tenant spaces on a property must be relet, the nonperformance risk of the loan related to such commercial property may increase. Any one or more of the preceding factors could materially impair our ability to recover principal in a foreclosure on the related loan as lender and repay the principal as borrower.

A substantial portion of our portfolio may be committed to the origination or purchasing of commercial loans to small and medium-sized, privately owned businesses. Compared to larger, publicly owned firms, such companies generally have limited access to capital and higher funding costs, may be in a weaker financial position and may need more capital to expand or compete. The above financial challenges may make it difficult for such borrowers to make scheduled payments of interest or principal on their loans. Accordingly, advances made to such types of borrowers entail higher risks than advances made to companies who are able to access traditional credit sources.

A portion of our portfolio also may be committed to the origination or purchasing of commercial loans where the borrower is a business with a history of poor operating performance, based on our belief that we can realize value from a loan on the property despite such borrower’s performance history. However, if such borrower were to continue to perform poorly after the origination or purchase of such loan, including due to the above financial challenges, we could be adversely affected.

Further, interim loans may be relatively less liquid than loans against stabilized properties due to their short life, their potential unsuitability for securitization, any unstabilized nature of the underlying real estate and the difficulty of recovery in the event of a borrower’s default. This lack of liquidity may significantly impede our ability to respond to adverse changes in the performance of our portfolio and may adversely affect the value of the portfolio. Such “liquidity risk” may be difficult or impossible to hedge against and may also make it difficult to effect a sale of such assets as we may need or desire. As a result, if we are required to liquidate all or a portion of our interim loan portfolio quickly, we may realize significantly less than the value at which such investments were previously recorded, which may fail to maximize the value of the investments or result in a loss.

There can be no assurance that the U.S. or global financial systems will remain stable, and the occurrence of another significant credit market disruption may negatively impact our ability to dispose of the commercial mortgage loans that we originate or acquire. Significant adverse changes in financial market conditions may result in a significant contraction in liquidity for mortgage loans and mortgage-related assets, which may adversely affect the performance and market value of our assets.

Our results of operations will be materially affected by conditions in the markets for mortgage loans and mortgage-related assets as well as the broader financial markets and the economy generally. The global financial markets experienced significant disruptions from late 2007 through 2009, during which time the global credit markets collapsed, borrowers defaulted on their loans and banks and other lending institutions suffered heavy losses. As a result of these conditions, many traditional mortgage loan investors suffered severe losses in their mortgage loan portfolios and several major market participants failed or have been impaired, resulting in a significant contraction in market liquidity for mortgage-related assets. This illiquidity negatively affected both the terms and availability of financing for most mortgage-

27

related assets, and resulted in these assets trading at significantly lower prices compared to recent periods. More recently, during the second half of 2011 and throughout 2012, volatility in the financial markets resulting from the European sovereign debt crisis, U.S. debt ceiling crisis and U.S. government credit downgrade caused certain market participants to curtail their CMBS lending activities. Further increased volatility and deterioration in the markets for mortgage loans and mortgage-related assets as well as in the broader financial markets may adversely affect the performance and market value of our assets. Furthermore, as a result of these conditions, institutions from which we may seek financing may become insolvent or tighten their lending standards, which could make it more difficult for us to obtain financing on favorable terms or at all. Our profitability may be adversely affected if we are unable to obtain cost-effective financing for our assets.

We may at times have a concentration in certain property types, which could result in defaults on a number of our assets within a short time period.

We are not required to observe specific diversification criteria. Therefore, our portfolio may at times have concentrations in certain property types that are subject to higher risk of foreclosure, or secured by properties concentrated in a limited number of geographic locations, as well as borrower concentrations. To the extent that the portfolio is concentrated in any one region or type of asset, downturns relating generally to such region or type of asset may result in defaults on a number of our assets within a short time period. Additionally, borrower concentration, in which a particular borrower is or group of related borrowers are associated with multiple real properties securing mortgage loans or CMBS held by us, may reduce diversification. Diversification also may be limited if our various debt instruments are concentrated in a certain commercial or industrial sector, a certain tenant or geographic area or if certain of our loans have outstanding principal balances that are substantially larger than others. A limited degree of diversification increases risk because the aggregate return of our business may be substantially adversely affected by the unfavorable performance of a single market, single property type, single tenant or even a single investment.

The allocation of capital among our business lines may vary, which will affect our financial performance.

In executing our business plan, we regularly consider the allocation of capital to our various commercial real estate business lines. The allocation of capital among such business lines may vary due to market conditions, the expected relative return on equity of each activity, the judgment of our management team, the demand in the marketplace for commercial real estate loans and securities and the availability of specific investment opportunities. We also consider the availability and cost of our likely sources of capital. If we fail to appropriately allocate capital and resources across our business lines or fail to optimize our investment and capital raising opportunities, our financial performance may be adversely affected.

The commercial mortgage and other commercial real estate-related loans, and the commercial mortgage loans underlying the CMBS in which we may invest, are subject to the ability of the commercial property owner to generate net income from operating the property (and not the independent income or assets of the borrower). Any reductions in net operating income increases the risks of delinquency, foreclosure and default, which could result in losses to us of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage or other loan.

Commercial mortgage loans are secured by multifamily or commercial property and are subject to risks of delinquency and foreclosure, and risks of loss that are greater than similar risks

28

associated with loans made on the security of single-family residential property. The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income (“NOI”), of the property is reduced, the borrower’s ability to repay the loan may be impaired. NOI of an income-producing property can be affected by factors including the following: tenant mix, success of tenant businesses, property management decisions, property location and condition, competition from comparable types of properties, changes in laws that increase operating expense or limit rents that may be charged, any need to address environmental contamination at the property, the occurrence of any uninsured casualty at the property, changes in national, regional or local economic conditions and/or specific industry segments including the credit and securitization markets, declines in regional or local real estate values, declines in regional or local rental or occupancy rates, increases in interest rates, real estate tax rates and other operating expenses, costs of remediation and liability associated with environmental conditions, the potential for uninsured property losses, changes in governmental rules, regulations and fiscal policies, including environmental legislation and the related costs of compliance, acts of God, terrorism, social unrest and civil disturbances. Additional risks may be presented by the type and use of a particular commercial property. Special additional risks apply to special property types, such as, for example, hospitals, nursing homes, hospitality properties and other property types.

Most commercial mortgage loans underlying CMBS are effectively nonrecourse obligations of the sponsor, meaning that there is no recourse against the sponsor’s assets other than the underlying collateral. In the event of any default under a mortgage or other real-estate related loan held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage or other loan, which could have a material adverse effect on our cash flow from operations. In the event of the bankruptcy of a mortgagor or other real-estate related loan borrower, the loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a mortgage loan can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed mortgage loan.

Further, our portfolio may include first mortgage loan financings which are loans made to holders of commercial real estate first mortgage loans that are secured by commercial real estate. While we have certain rights with respect to the real estate collateral underlying a first mortgage loan, the holder of the commercial real estate first mortgage loans may fail to exercise its rights with respect to a default or other adverse action relating to the underlying real estate collateral or fail to promptly notify us of such an event which would adversely affect our ability to enforce our rights. In addition, in the event of the bankruptcy of the borrower under the first mortgage loan, we may not have full recourse to the assets of the holder of the commercial real estate mortgage loan, or the assets of the holder of the commercial real estate mortgage loan may not be sufficient to satisfy our first mortgage loan financing. Accordingly, we may face greater risks from our first mortgage loan financings than if we had made a first loan directly to a direct owner of real estate collateral.

Certain balance sheet loans may involve a greater risk of loss than long-term mortgage loans.

We originate and acquire balance sheet loans secured by first lien mortgage loans on commercial real estate that provide interim financing to borrowers seeking short-term capital for the acquisition or transition (for example, lease up and/or rehabilitation) of commercial real estate

29

generally having a maturity of three years or less. Such a borrower under an interim loan often has identified a transitional asset that has been under-managed and/or is located in a recovering market. If the market in which the asset is located fails to recover according to the borrower’s projections, or if the borrower fails to improve the quality of the asset’s management and/or the value of the asset, the borrower may not receive a sufficient return on the asset to satisfy the interim loan, and we bear the risk that we may not recover some or all of our initial expenditure.

In addition, borrowers usually use the proceeds of a long-term mortgage loan to repay an interim loan. We may therefore be dependent on a borrower’s ability to obtain permanent financing to repay our interim loan, which could depend on market conditions and other factors. Interim loans are also subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance. In the event of any default under interim loans that we hold, we bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount and unpaid interest of the interim loan.

We may originate or acquire construction loans, which may expose us to an increased risk of loss.

We may originate or acquire construction loans. If we fail to fund our entire commitment on a construction loan or if a borrower otherwise fails to complete the construction of a project, there could be adverse consequences associated with the loan, including: a loss of the value of the property securing the loan, especially if the borrower is unable to raise funds to complete construction from other sources; a borrower claim against us for failure to perform under the loan documents; increased costs to the borrower that the borrower is unable to pay; a bankruptcy filing by the borrower; and abandonment by the borrower of the collateral for the loan.

We are subject to additional risks associated with loan participations.

Some of our loans are participation interests or co-lender arrangements in which we share the rights, obligations and benefits of the loan with other lenders. We may need the consent of these parties to exercise our rights under such loans, including rights with respect to amendment of loan documentation, enforcement proceedings in the event of default and the institution of, and control over, foreclosure proceedings. Similarly, a majority of the participants may be able to take actions to which we object but to which we will be bound if our participation interest represents a minority interest. We may be adversely affected by this lack of full control.

We may originate or acquire B-Notes, a form of subordinated mortgage loan, and we may be subject to additional risks relating to the privately negotiated structure and terms of the transaction, which may result in losses to us.

We may originate or acquire B-Notes. A B-Note is a mortgage loan typically (i) secured by a first mortgage on a single large commercial property or group of related properties and (ii) subordinated to an A-Note secured by the same first mortgage on the same collateral. As a result, if a borrower defaults, there may not be sufficient funds remaining for B-Note owners after payment to the A-Note owners. B-Notes reflect similar credit risks to comparably rated CMBS. However, since each transaction is privately negotiated, B-Notes can vary in their structural characteristics and risks. For example, the rights of holders of B-Notes to control the process following a borrower default may be limited in certain investments and circumstances. Further, B-Notes typically are secured by a single property, and so reflect the increased risks associated with a single property compared to a pool of properties. B-Notes also are less liquid than CMBS, thus we may be unable to dispose of underperforming or non-performing investments.

30

Our investments in subordinate loans, subordinate participation interests in loans and subordinate CMBS rank junior to other senior debt and we may be unable to recover our investment in these loans.

We may originate or acquire subordinate loans (including mezzanine loans), subordinate participation interests in loans and subordinate CMBS. In the event a borrower defaults on a loan and lacks sufficient assets to satisfy our loan, we may suffer a loss of principal or interest. In the event a borrower declares bankruptcy, we may not have full recourse to the assets of the borrower, or the assets of the borrower may not be sufficient to satisfy the loan. In addition, certain of our loans may be subordinate to other debt of the borrower. If a borrower defaults on a loan to us or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt is paid in full. Where debt senior to our loan exists, the presence of intercreditor arrangements may limit our ability to amend loan documents, assign our loans, accept prepayments, exercise remedies and control decisions made in bankruptcy proceedings relating to borrowers.

If a borrower defaults on our mezzanine loan, subordinate loan or debt senior to any loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt is paid in full. As a result, we may not recover some or all of our initial expenditure. In addition, mezzanine and subordinate loans may have higher loan-to-value ratios than first mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal. Significant losses related to our mezzanine loans or subordinate loans would result in operating losses for us.

In general, losses on a mortgaged property securing a mortgage loan included in a securitization will be borne first by the equity holder of the property, then by a cash reserve fund or letter of credit, if any, then by the holder of a mezzanine loan or B-Note, if any, then by the “first loss” subordinated security holder (generally, the “B-Piece” buyer) and then by the holder of a higher-rated security. In the event of default and the exhaustion of any equity support, reserve fund, letter of credit, mezzanine loans or B-Notes, and any classes of securities junior to those in which we may invest, we may not be able to recover all of our investment in the securities we purchased. In addition, if the underlying mortgage portfolio has been overvalued by the originator, or if the values subsequently decline and, as a result, less collateral is available to satisfy interest and principal payments due on the related mortgage-backed securities, the securities in which we may invest may effectively become the “first loss” position behind the more senior securities, which may result in significant losses to us. The prices of lower credit quality securities are generally less sensitive to interest rate changes than more highly rated investments, but more sensitive to adverse economic downturns or individual issuer developments. A projection of an economic downturn, for example, could cause a decline in the price of lower credit quality securities because the ability of obligors of mortgage loans underlying the mortgage-backed securities to make principal and interest payments may be impaired. In such event, existing credit support in the securitization structure may be insufficient to protect us against loss of our principal in these securities.

Our investments in Structured Finance Securities are subject to the significant credit risks inherent in the underlying collateral and to the risk that the servicer fails to perform.

“Structured Finance Securities” are securities that entitle the holders thereof to receive payments that depend primarily on the cash flow from or sale proceeds of a specified pool of assets, either fixed or revolving, that by their terms convert into cash within a finite time period, together with rights or other assets designed to assure the servicing or timely distribution of proceeds to holders of such securities.

31

Holders of Structured Finance Securities bear various risks: credit risks, liquidity risks, interest rate risks, market risks, operations risks, structural risks and legal risks. Structured Finance Securities are subject to the significant credit risks inherent in the underlying collateral and to the risk that the servicer fails to perform. The performance of Structured Finance Securities is also dependent on the allocation of principal and interest payments as well as losses among the classes of such securities of any issue, whether underlying collateral assets are revolving or closed-end, whether proceeds from the underlying assets may be reinvested and the applicable redemption features. In addition, concentrations of Structured Finance Securities of a particular type, as well as concentrations of Structured Finance Securities issued or guaranteed by affiliated obligors, serviced by the same servicer, directed by the same subordinate certificate holder, backed by a single or limited number of underlying assets or backed by assets having concentrated exposure to a single industry or geographic region, may subject the Structured Finance Securities to additional risk. A portion of our business consists of investment in Structured Finance Securities that are subordinate in right of payment and rank junior to other securities that are secured by or represent an ownership interest in the same pool of assets. Certain of the transactions may have structural features that divert payments of interest and/or principal to more senior classes when the delinquency or loss experience of the pool exceeds certain levels, which would reduce or eliminate payments of interest on one or more classes of such securities for one or more payment dates. Additionally, as a result of cash flow being diverted to payments of principal on more senior classes, the average life of the more junior securities may lengthen.

The market value of our investments in CMBS could fluctuate materially as a result of various risks that are out of our control and may result in significant losses.

We currently invest in and may continue to invest in CMBS, a specific type of structured finance security. CMBS are, generally, investment grade and below investment grade securities backed by obligations (including certificates of participation in obligations) that are principally secured by commercial mortgage loans or interests therein having a multi-family or commercial use, such as shopping malls, other retail space, office buildings, industrial or warehouse properties, hotels, nursing homes and senior living centers. Accordingly, investments in CMBS are subject to the various risks described herein which relate to the pool of underlying assets in which the CMBS represents an interest. The exercise of remedies and successful realization of liquidation proceeds relating to commercial mortgage loans underlying CMBS may be highly dependent on the performance of the servicer or special servicer. There may be a limited number of special servicers available, particularly those which do not have conflicts of interest. We will bear the risk of loss on any CMBS we purchase. Further, the insurance coverage for various types of losses is limited in amount and we would bear losses in excess of the applicable limitations.

We may attempt to underwrite our investments on a “loss-adjusted” basis, which projects a certain level of performance. However, there can be no assurance that this underwriting will accurately predict the timing or magnitude of such losses. To the extent that this underwriting has incorrectly anticipated the timing or magnitude of losses, our business may be adversely affected. Some mortgage loans underlying CMBS may default. Under such circumstances, cash flows of CMBS investments held by us may be adversely affected as any reduction in the mortgage payments or principal losses on liquidation of any mortgage loan may be applied to the class of CMBS relating to such defaulted loans that we hold.

The market value of our CMBS investments could fluctuate materially over time as the result of changes in mortgage spreads, treasury bond interest rates, capital market supply and demand factors, and many other factors that affect high-yield fixed income products. These factors are out of our control, and could influence our ability to obtain short-term financing on the CMBS. The CMBS

32

in which we may invest may have no, or only a limited, trading market. The financial markets in the past have experienced and could in the future experience a period of volatility and reduced liquidity which may reoccur or continue and reduce the market value of CMBS. Some or all of the CMBS that we hold may be subject to restrictions on transfer and may be considered illiquid.

We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them, which may harm our business results.

We may acquire debt instruments in the secondary market for less than their face amount. The amount of such discount generally will be treated as “market discount” for U.S. federal income tax purposes. Accrued market discount is reported as income when, and to the extent that, any payment of principal of the debt instrument is made, unless we elect to include accrued market discount in income as it accrues. Principal payments on certain loans are made monthly, and consequently accrued market discount may have to be included in income each month as if the debt instrument were assured of ultimately being collected in full. If we collect less on the debt instrument than our purchase price plus the market discount we had previously reported as income, an offsetting loss deduction will become available, although we might be unable to benefit from it.

Similarly, some of the CMBS that we acquire may have been issued with original issue discount (“OID”) for U.S. federal income tax purposes. We will be required to report such OID based on a constant yield method and will be taxed based on the assumption that all future projected payments due on such CMBS will be made. If such CMBS turns out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectability is provable.

Finally, in the event that any debt instruments or CMBS acquired by us are delinquent as to mandatory principal and interest payments, or in the event payments with respect to a particular debt instrument are not made when due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income as it accrues, despite doubt as to its ultimate collectability. Similarly, we may be required to accrue interest income with respect to subordinate mortgage-backed securities at its stated rate regardless of whether corresponding cash payments are received or are ultimately collectible.

In each case, while we would in general ultimately have an offsetting loss deduction available to us when such interest was determined to be uncollectible, the utility of that deduction could depend on our having taxable income in that later year or thereafter.

We have acquired and, in the future, may acquire net leased real estate assets, or make loans to owners of net leased real estate assets (including ourselves), which carry particular risks of loss that may have a material impact on our financial condition, liquidity and results of operations.

A net lease requires the tenant to pay, in addition to the fixed rent, some or all of the property expenses that normally would be paid by the property owner. The value of our investments and the income from our investments in net leased properties, if any, will depend upon the ability of the applicable tenant to meet its obligations to maintain the property under the terms of the net lease. If a tenant fails or becomes unable to so maintain a property, the cash flow and/or the value of the property would be adversely affected. In addition, under many net leases the owner of the property retains certain obligations with respect to the property, including among other things, the responsibility for maintenance and repair of the property, to provide adequate parking, maintenance of common areas and compliance with other affirmative covenants in the lease. If we, as the owner, or the borrower, were to fail to meet

33

these obligations, the applicable tenant could abate rent or terminate the applicable lease, which may result in a loss of capital invested in, and anticipated profits from, the property. In addition, we, as the owner, or the borrower may find it difficult to lease certain property to new tenants if that property had been suited to the particular needs of a former tenant.

The expense of operating and owning real property may impact our cash flow from operations.

We have in the past and may in the future make equity investments in real property. Costs associated with real estate investment, such as real estate taxes, insurance and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to rent out properties on favorable terms. Under those circumstances, we might not be able to enforce our rights as landlord without delays and may incur substantial legal costs. Additionally, new properties that we may acquire or redevelop may not produce significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and principal and interest on debt associated with such properties until they are fully leased.

For example, in December 2012, we entered into a joint venture to purchase 427 residential condominium units in Veer Towers, which we believe presents an attractive option to potential buyers. However, there can be no assurance that this investment will generate positive cash flows, revenues or returns from the investment in the expected timeframe, or at all.

Our investments in securities and mortgages issued by agencies or instrumentalities of the U.S. government face risks of prepayments or defaults on U.S. Agency Securities that we own at a premium and of “negative convexity.”

We currently invest in and may continue to invest in securities and mortgages issued by agencies or instrumentalities of the U.S. government, including Ginnie Mae, Fannie Mae, the Federal Housing Administration (“FHA”), Freddie Mac and other government agency mortgages secured by single multifamily properties or skilled nursing facilities. Additionally, we invest in real estate mortgage investment conduit (“REMIC”) securities collateralized by these mortgages. We invest in U.S. Agency Securities, the principal of which is guaranteed implicitly or explicitly by the U.S. government. Therefore, the most significant risks present in U.S. Agency Securities owned by us are first, in prepayments or defaults on U.S. Agency Securities that we own at a premium and second, “negative convexity,” as defined below.

We are exposed to the risk of increased prepayments or defaults by any mortgage or security that we own at a premium, such as any interest-only securities, most single mortgage securities and all construction and permanent loans. Any principal paydown diminishes the amount outstanding in these securities and reduces the yield to us. Before purchasing a loan or security, we judge the likelihood of prepayment based on certain prepayment and default parameters and our own experience in the government agency security market. Different estimates, judgments and assumptions reasonably could be used that would have a material effect on our judgment and, accordingly, result in losses to our business.

“Negative convexity” is the inverse relationship between interest rates and the average expected life of a pool of mortgage loans; when interest rates rise, a mortgage may extend and when interest rates fall, a mortgage may prepay or default. As in any mortgage security, negative convexity is a concern as the yield on mortgage-backed securities is based on the average expected life of the underlying pool of mortgage loans. The actual prepayment experience of such pools may cause the yield we realize to differ from that calculated by us in making the investment,

34

resulting in losses or profits. To protect against prepayments in a falling interest rate environment, typically each newly originated multifamily loan owned by us has a combination of 10 years of call/prepayment protection. However, an unexpected default in a single large property may reduce yield. In each transaction, we attempt to understand the agencies’ underwriting processes in order to assess the risk of default associated with a particular U.S. Agency Security. We also endeavor to diversify our holdings and at periodic points in time, sell our older positions for newer product, which may have less likelihood of default. There is no guarantee that we will be successful in either of these activities. When interest rates are rising, the rate of prepayment tends to decrease, thereby lengthening the actual average life of such pools. We frequently update our extension risk analyses and, if necessary, our hedging to account for this risk. The same is true when interest rates fall and prepayments tend to increase.

Other risks associated with U.S. Agency Securities are illiquidity, re-investment and the risk that a construction loan may not roll into a permanent loan.

A change to the conservatorship of Fannie Mae and Freddie Mac and related actions, along with any changes in laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the U.S. federal government, could adversely affect our business.

There continues to be substantial uncertainty regarding the future of Fannie Mae and Freddie Mac, including the length of time for which they may continue to exist and in what form they may operate during that period. Due to increased market concerns about the ability of Fannie Mae and Freddie Mac to withstand future credit losses associated with securities on which they provide guarantees and loans held in their investment portfolios without the direct support of the U.S. federal government, in September 2008, the Federal Housing Finance Agency (the “FHFA”) placed Fannie Mae and Freddie Mac into conservatorship and, together with the Treasury, established a program designed to boost investor confidence in Fannie Mae and Freddie Mac by supporting the availability of mortgage financing and protecting taxpayers. The U.S. government program includes contracts between the Treasury and each of Fannie Mae and Freddie Mac that seek to ensure that each GSE maintains a positive net worth by providing for the provision of cash by the Treasury to Fannie Mae and Freddie Mac if FHFA determines that its liabilities exceed its assets. Although the U.S. government has described some specific steps that it intends to take as part of the conservatorship process, efforts to stabilize these entities may not be successful and the outcome and impact of these events remain highly uncertain. Under the statute providing the framework for the GSE’s conservatorship, either or both GSEs could also be placed into receivership under certain circumstances.

In August 2012, the Treasury announced its intention to restructure the preferred stock agreements with the GSEs. Under the new agreement, the GSEs will (a) pass on all profits to the Treasury when they make money and pay nothing when they have losses (as opposed to paying a flat 10% dividend), (b) wind down their mortgage portfolios by 15% per annum with the goal of reaching a total portfolio size of $150 billion by 2018 and (c) submit a plan to the Treasury to reduce mortgage risk for both the guaranteed book and retained portfolio by December 15, 2012. In March 2013, Fannie Mae and Freddie Mac announced that they will build a new entity as they wind down operations and may eventually be replaced by the new entity. Although these plans may be positive for us, there is no guarantee that they will take effect as stated or at all.

We may make equity and preferred equity investments which involve a greater risk of loss than traditional debt financing.

We may invest in equity and preferred equity interests in entities owning real estate. Such investments are subordinate to debt financing and are not secured. Should the issuer default on

35

our investment, in most instances we would only be able to proceed against the entity that issued the equity in accordance with the terms of the security, and not any property owned by the entity. Furthermore, in the event of bankruptcy or foreclosure, we would only be able to recoup our capital after any creditors to the entity are paid. As a result, we may not recover some or all of our capital, which could result in losses.

Recent dislocations, illiquidity and volatility in the markets for CMBS as well as the broader financial markets have and may continue to adversely affect the demand for CMBS and the profitability of our securitization business.

During the recent financial crisis, the real estate and securitization markets, including the market for CMBS, as well as global financial markets and the economy generally, have experienced significant dislocations, illiquidity and volatility. Declining real estate values, coupled with diminished availability of leverage and/or refinancings for commercial, multifamily and manufactured housing community real estate have resulted in increased delinquencies and defaults on commercial, multifamily and manufactured housing community mortgage loans. In addition, the downturn in the general economy has affected the financial strength of many commercial, multifamily and manufactured housing community real estate tenants and has resulted in increased rent delinquencies and decreased occupancy. Any further economic downturn may lead to further reductions in the occupancy, rents, income and value of, commercial, multifamily and manufactured housing community real estate, which would likely have an adverse effect on CMBS that are backed by loans secured by such commercial, multifamily and manufactured housing community real estate. We cannot assure you that dislocations in the CMBS market will not continue to occur or become more severe.

In addition to credit factors directly affecting CMBS, the continuing fallout from a downturn in the residential mortgage-backed securities market and markets for other asset-backed and structured products has also affected the CMBS market by contributing to a decline in the market value and liquidity of securitized investments such as CMBS. All of these factors may impact the demand for CMBS and the profitability of our securitization business.

Our participation in the market for nonrecourse long-term securitizations may expose us to risks that could result in losses to us.

Following the dislocation of credit markets that commenced in 2007, the market for nonrecourse long-term securitizations has resumed and we have generally participated in that market by contributing loans to securitizations led by various large financial institutions and by leading a single-asset securitization on a single mortgage loan we originated. We may, in the future, take a larger role in leading single-asset and multi-asset securitizations of mortgage loans. To date, when we have primarily acted as a co-manager and mortgage loan seller into securitizations, we have been obligated to assume substantially similar liabilities as were required of a mortgage loan seller prior to the credit market dislocation, including with respect to representations and warranties required to be made for the benefit of investors. In particular, in connection with any particular securitization, we: (i) make certain representations and warranties regarding ourselves and the characteristics of, and origination process for, the mortgage loans that we contribute to the securitization; (ii) undertake to cure, or to repurchase or replace any mortgage loan that we contribute to the securitization that is affected by a material breach of any such representation and warranty or a material loan document deficiency; and (iii) assume, either directly or through the indemnification of third-parties, potential securities law liabilities for disclosure to investors regarding ourselves and the mortgage loans that we contribute to the securitization. When we lead single-asset or multi-asset securitizations as issuer and/or lead manager, we assume, either directly or through indemnification agreements, additional potential

36

securities law liabilities and third-party liabilities beyond the liabilities we would assume when we act only as a mortgage loan seller into a securitization.

As a result of the dislocation of the credit markets, the securitization industry has crafted and continues to craft proposed changes to securitization practices, including proposed new standard representations and warranties, underwriting guidelines and disclosure guidelines. In addition, the securitization industry is becoming more regulated. For example, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), various federal agencies have promulgated, or are in the process of promulgating regulations with respect to various issues that affect securitizations, including (i) a requirement under the Dodd-Frank Act that issuers in securitizations retain 5% of the risk associated with securities they issue, (ii) requirements for additional disclosure, (iii) requirements for additional review and reporting, (iv) a possible requirement that a portion of potential profit that would be realized on the securitization must be deposited in a reserve account and used as additional credit support for the related commercial mortgage-backed securities until the loans are repaid and (v) certain restrictions designed to prevent conflicts of interest. The implementation of any regulations ultimately adopted will occur over a time period that could range from two months to as long as two years. Certain regulations have already been adopted and others remain under consideration by various governmental agencies, in some cases past the deadlines set in the Dodd-Frank Act for adoption. It is expected that the risk-retention regulations will be adopted in 2013 and that, pursuant to the Dodd-Frank Act as presently in effect, those regulations would take effect two years after adoption. Certain proposed regulations, if adopted, could alter the structure of securitizations in the future and could pose additional risks to our participation in future securitizations or could reduce or eliminate the economic benefits of participating in future securitizations.

Prior to any securitization, we generally finance mortgage loans with relatively short-term facilities until a sufficient portfolio is accumulated. We are subject to the risk that we will not be able to originate or acquire sufficient eligible assets to maximize the efficiency of a securitization. We also bear the risk that we might not be able to obtain new short-term facilities or would not be able to renew any short-term facilities after they expire should we need more time to seek and acquire sufficient eligible assets for a securitization. Our inability to refinance any short-term facilities would also increase our risk because borrowings thereunder would likely be recourse to us or one of our subsidiaries. If we are unable to obtain and renew short-term facilities or to consummate securitizations to finance our assets on a long-term basis, we may be required to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or price.

Any credit ratings assigned to our investments could be downgraded, which could have a material impact on our financial condition, liquidity and results of operations.

Some of our investments may be rated by one or more of Moody’s, Fitch, Standard & Poor’s, Realpoint, Dominion Bond Rating Service, Kroll Bond Ratings or other credit rating agencies. Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot be assured that any such ratings will not be changed or withdrawn by a credit rating agency in the future if, in its judgment, circumstances warrant. If credit rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value of these investments could significantly decline, which would adversely affect the value of our portfolio and could result in losses upon disposition or the failure of borrowers to satisfy their debt service obligations to us.

37

The credit ratings currently assigned to our investments may not accurately reflect the risks associated with those investments.

Credit rating agencies rate our investments based upon their assessment of the perceived safety of the receipt of principal and interest payments from the issuers of such debt securities. Credit ratings assigned by the credit rating agencies may not fully reflect the true risks of an investment in such securities. Also, credit rating agencies may fail to make timely adjustments to credit ratings based on recently available data or changes in economic outlook or may otherwise fail to make changes in credit ratings in response to subsequent events, so that our investments may in fact be better or worse than the ratings indicate. We try to reduce the impact of the risk that a credit rating may not accurately reflect the risks associated with a particular debt security by not relying solely on credit ratings as the indicator of the quality of an investment. We make our acquisition decisions after factoring in other information, such as the discounted value of a CMBS security’s projected future cash flows, and the value of the real estate collateral underlying the mortgage loans owned by the issuing REMIC trust. However, our assessment of the quality of a CMBS investment may also prove to be inaccurate and we may incur credit losses in excess of our initial expectations.

We could incur losses from investments in non-conforming and non-investment grade-rated loans or securities, which could have a material impact on our financial condition, liquidity and results of operations.

Our investments may not conform to conventional loan standards applied by traditional lenders and either will not be rated or will be rated as non-investment grade by the credit rating agencies. The non-investment grade ratings for these assets typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow or other factors. As a result, these investments will have a higher risk of default and loss than investment grade-rated assets. Any loss that we incur may be significant. There may be no limits on the percentage of unrated or non-investment grade rated assets that we may hold in our portfolio.

We may experience a decline in the fair value of our assets, which may have a material impact on our financial condition, liquidity and results of operations.

A decline in the fair market value of our assets may require us to recognize an “other-than-temporary” impairment (“OTTI”), against such assets under GAAP if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets to maturity or for a period of time sufficient to allow for recovery to the amortized cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write down the amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be other-than-temporarily impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of such assets at the time of sale.

Some of our portfolio investments will be recorded at fair value and, as a result, there will be uncertainty as to the value of these investments. Furthermore, our determinations of fair value may have a material impact on our financial condition, liquidity and results of operations.

We expect that the value of some of our investments may not be readily determinable. We will value these investments quarterly at fair value, as determined in accordance with Financial

38

Accounting Standards Board (“FASB”) Accounting Standards Codification (Topic 820): Fair Value Measurement, or ASC 820. Because such valuations are subjective, the fair value of certain of our assets may fluctuate over short periods of time and our determinations of fair value may differ materially from the values that would have been used if a ready market for these assets existed. Our determinations of fair value may have a material impact on our earnings, in the case of impaired loans and other assets, trading securities and available-for-sale securities that are subject to OTTI, or our accumulated other comprehensive income/(loss) in our stockholders’ equity, in the case of available-for-sale securities that are subject only to temporary impairments.

In many cases, our determination of the fair value of our investments will be based on valuations provided by third-party dealers and pricing services. Valuations of certain of our assets are often difficult to obtain or unreliable. In general, dealers and pricing services heavily disclaim their valuations. Dealers may claim to furnish valuations only as an accommodation and without special compensation, and so they may disclaim any and all liability for any direct, incidental or consequential damages arising out of any inaccuracy or incompleteness in valuations, including any act of negligence or breach of any warranty. Depending on the complexity and illiquidity of an asset, valuations of the same asset can vary substantially from one dealer or pricing service to another. Additionally, our results of operations for a given period could be adversely affected if our determinations regarding the fair value of these investments were materially higher than the values that we ultimately realize upon their disposal.

Our ability to realize upon the mortgage loans may be limited by the application of state laws.

Each of our mortgage loans permits us to accelerate the debt upon default by the borrower. The courts of all states will enforce acceleration clauses in the event of a material payment default, subject in some cases to a right of the court to revoke such acceleration and reinstate the mortgage loan if a payment default is cured. The equity courts of any state, however, may refuse to allow the foreclosure of a mortgage, deed of trust, or other security instrument or to permit the acceleration of the indebtedness if the exercise of those remedies would be inequitable or unjust or the circumstances would render the acceleration unconscionable. Thus, a court may refuse to permit foreclosure or acceleration if a default is deemed immaterial or the exercise of those remedies would be unjust or unconscionable or if a material default is cured.

Further, the ability to realize upon mortgage loans may be limited by the application of state and federal laws. Several states (including California) have laws that prohibit more than one “judicial action” to enforce a mortgage obligation. Some courts have construed the term “judicial action” broadly.

The borrowers under the loans underlying our investments may be unable to repay their remaining principal balances on their stated maturity dates, which could negatively impact our business results.

Our mortgage loans may be non-amortizing or partially amortizing balloon loans that provide for substantial payments of principal due at their stated maturities. Balloon loans involve a greater risk to the lender than amortizing loans because a borrower’s ability to repay a balloon mortgage loan on its stated maturity date typically will depend upon its ability either to refinance the mortgage loan (although some loans such as those on condominium projects, may be at least partially self-liquidating) or to sell the mortgaged property at a price sufficient to permit repayment. A borrower’s ability to effect a refinancing or sale will be affected by a number of factors. We are not obligated to refinance any of these mortgage loans.

39

Mortgaged properties underlying our investments may be currently undergoing, or are expected to undergo in the future, construction, development, redevelopment, renovation or repairs, the failure of which could negatively impact the repayment of the related mortgage loan or value of the property.

Any construction, redevelopment, renovation or repairs at the mortgaged properties underlying our investments may not be completed, may not be completed in the time frame contemplated, or, when and if redevelopment or renovation is completed, such redevelopment or renovation may not improve the operations at, or increase the value of, the subject property. Failure of any of the foregoing to occur could have a material negative impact on the related mortgage loan and/or the value of the related mortgaged property, which could affect the ability of the borrower to repay the related mortgage loan. Additionally, in the event that the related borrower or tenant fails to pay the costs for work completed or material delivered in connection with such ongoing construction, redevelopment, renovation or repairs, the related mortgaged property may be subject to mechanic’s or materialmen’s liens that may be senior to the lien of the related mortgage loan. Also, the existence of construction or renovation at a mortgaged property may make such mortgaged property less attractive to tenants or their customers or other users and, accordingly, could have a negative impact on net operating income.

Performance of mortgaged properties underlying our investments depends on the successful performance of the property manager.

The successful operation of a real estate project, including those underlying our investments, depends upon the property manager’s performance and viability. Management errors can, in some cases, impair short-term cash flow and the long-term viability of an income producing property. No representation or warranty can be made by us as to the skills or experience of any present or future property managers. Many of the property managers are affiliated with the borrower and, in some cases, such property managers may not manage any other properties. Additionally, there can be no assurance that the related property manager will be in a financial condition to fulfill its management responsibilities throughout the terms of its respective management agreement.

Third-party diligence reports on mortgaged properties are made as of a point in time and are therefore limited in scope.

Appraisals and engineering and environmental reports, as well as a variety of other third party reports, are generally obtained with respect to each of the mortgaged properties underlying our investments at or about the time of origination. Appraisals are not guarantees of present or future value. One appraiser may reach a different conclusion than the conclusion that would be reached if a different appraiser were appraising that property. Moreover, the values of the mortgaged properties may have fluctuated significantly since the appraisals were performed. In addition, any third party report, including any engineering report, environmental report, site inspection or appraisal represents only the analysis of the individual consultant, engineer or inspector preparing such report at the time of such report, and may not reveal all necessary or desirable repairs, maintenance, remediation and capital improvement items.

The owners of, and borrowers on, the properties which secure our investments may seek the protection afforded by bankruptcy, insolvency and other debtor relief laws, which may create potential for risk of loss to us.

Although commercial mortgage lenders typically seek to reduce the risk of borrower bankruptcy through such items as nonrecourse carveouts for bankruptcy and special purpose

40

entity/separateness covenants and/or non-consolidation opinions for borrowing entities, the owners of, and borrowers on, the properties which secure our investments may still seek the protection afforded by bankruptcy, insolvency and other debtor relief laws. One of the protections offered in such proceedings to borrowers or owners is a stay of legal proceedings against such borrowers or owners, and a stay of enforcement proceedings against collateral for such loans or underlying such securities (including the properties and cash collateral). A stay of foreclosure proceedings could adversely affect our ability to realize on its collateral, and could adversely affect the value of those assets. Other protections in such proceedings to borrowers and owners include forgiveness of debt, the ability to create super priority liens in favor of certain creditors of the debtor, the potential loss of cash collateral held by the lender if the lender is over-collateralized, and certain well defined claims procedures. Additionally, the numerous risks inherent in the bankruptcy process create a potential risk of loss of our entire investment in any particular investment.

Liability relating to environmental matters may impact the value of properties that we may acquire or the properties underlying our investments.

Liability relating to environmental matters may decrease the value of the underlying properties of our investments and may adversely affect the ability of a person to sell such property or real estate instrument related to the property or borrow using such property as collateral and may adversely affect the security afforded by a property for a mortgage loan. Under various federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on, about, under or in its property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. To the extent that an owner of an underlying property becomes liable for removal costs, testing, monitoring, remediation, bodily injury or property damage, the ability of the owner to make debt payments may be reduced, which in turn may adversely affect the value of the relevant mortgage asset related to such property. If we acquire any properties by foreclosure or otherwise, the presence of hazardous substances on a property may adversely affect our ability to sell the property and we may incur substantial remediation costs, thereby harming our financial conditions. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition. Moreover, some federal and state laws provide that, in certain situations, a secured lender, such as us, may be liable as an “owner” or “operator” of the real property, regardless of whether the borrower or previous owner caused the environmental damage. Therefore, the presence of hazardous materials on certain property could have an adverse effect on us in our capacity as the owner of such property, as the mortgage lender to the owner of such property, or as the holder of a real estate instrument related to such property.

Insurance on the real estate underlying our loans and investments may not cover all losses, and this shortfall could result in both loss of cash flow from and a decrease in the asset value of the affected property.

The borrower, or we as property owner and/or originating lender, as the case may be, might not purchase enough or the proper types of insurance coverage to cover all losses. Further, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war that may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations and other factors, including terrorism or acts of war, also might make the insurance proceeds insufficient to repair or replace a property if it is damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore our economic position with

41

respect to the affected real property. Any uninsured loss could result in both loss of cash flow from and a decrease in the asset value of the affected property.

Our entitlement to repayment on a loan may be impacted by the doctrine of equitable subordination, which would result in the subordination of our claim to the claims of other creditors of the borrower.

Courts have, in some cases, applied the doctrine of equitable subordination to subordinate the claim of a lending institution against a borrower to claims of other creditors of the borrower, when the lending institution is found to have engaged in unfair, inequitable or fraudulent conduct. The courts have also applied the doctrine of equitable subordination when a lending institution or its affiliates are found to have exerted inappropriate control over a borrower, including control resulting from the ownership of equity interests in a borrower. In certain instances where we own equity in a property, we also may make one or more loans to the owner of such property. Payments on one or more of our loans, particularly a loan to a borrower in which we also hold equity interests, may be subject to claims of equitable subordination that would place our entitlement to repayment of the loan on an equal basis with holders of the borrower’s common equity only after all of the borrower’s obligations relating to its other debt and preferred securities has been satisfied.

If we purchase or originate loans secured by liens on facilities that are subject to a ground lease and such ground lease is terminated unexpectedly, our interests could be adversely affected.

A ground lease is a lease of land, usually on a long-term basis, that does not include buildings or other improvements on the land. Normally any real property improvements made by the lessee during the term of the lease will revert to the owner at the end of the lease term. We may purchase or originate loans secured by liens on facilities that are subject to a ground lease, and, if the ground lease were to terminate unexpectedly, due to the borrower’s default on such ground lease, our business could be adversely affected.

State laws governing assignments of leases could adversely affect our interests.

Some loans originated or purchased by us may be secured by, among other things, an assignment of leases and rents. In some cases, state law may require that the lender take possession of the property and obtain a judicial appointment of a receiver before becoming entitled to collect such rents. Such a procedure could be time-consuming and costly to us or could be adversely affected by the commencement of a bankruptcy or similar proceeding. In such instances, our business could be adversely affected.

For certain of our loans, we may rely on loan agents and special servicers and such agents and servicers may not act in the manner that we expect.

With respect to some of our loans, we will be neither the agent of the lending group that receives payments under the loan nor the agent of the lending group that controls the collateral for purposes of administering the loan. When we are not the agent for a loan, we may not receive the same financial or operational information as we would receive for loans for which we are the agent and, in many instances, the information on which we must rely may be provided by the agent rather than directly by the borrower. As a result, it may be more difficult for us to track or rate such loans than it is for the loans for which we are the agent. Additionally, we may be prohibited or otherwise restricted from taking actions to enforce the loan or to foreclose upon the collateral securing the loan without the agreement of other lenders holding a specified minimum aggregate percentage, generally a majority or two-thirds of the outstanding

42

principal balance. It is possible that an agent or other lenders for one of such loans may choose not to take the same actions to enforce the loan or to foreclose upon the collateral securing the loan that we would have taken had we been agent for the loan.

We may not be able to control the party who services the mortgage loans included in the CMBS in which we may invest if those loans are in default and, in such cases, our interests could be adversely affected.

With respect to each series of the CMBS in which we may invest, overall control over the special servicing of the related underlying mortgage loans will be held by a “directing certificate-holder” or a “controlling class representative,” which is appointed by the holders of the most subordinate class of CMBS in such series. We may not have the right to appoint the directing certificate-holder or controlling class representative. In connection with the servicing of the specially serviced mortgage loans, the related special servicer may, at the direction of the directing certificate-holder or controlling class representative, take actions with respect to the specially serviced mortgage loans that could adversely affect our interests. However, the special servicer is not permitted to take actions that are prohibited by law or violate the applicable servicing standard or the terms of the mortgage loan documents.

We may be required to make determinations of a borrower’s creditworthiness based on incomplete information or information that we cannot verify, which may cause us to purchase or originate loans that we otherwise would not have purchased or originated and, as a result, may negatively impact our business.

The commercial real estate lending business depends on the creditworthiness of borrowers, which we must judge. In making such judgment, we will depend on information obtained from non-public sources in making many decisions related to our portfolio, and such information may be difficult to obtain. As a result, we may be required to make decisions based on incomplete information or information that is impossible or impracticable to verify. A determination as to the creditworthiness of a prospective borrower is based on a wide-range of information including, without limitation, information relating to the form of entity of the prospective borrower, which may indicate whether the borrower can limit the impact that its other activities have on its ability to pay obligations related to the mortgaged property. Even if we are provided with full and accurate disclosure of all material information concerning a borrower, members of the management team may misinterpret or incorrectly analyze this information, which may cause us to purchase or originate loans that we otherwise would not have purchased or originated and, as a result, may negatively impact our business. Additionally, we will maintain reserves for credit losses that are inherent in a commercial real estate portfolio, but we cannot be certain that our reserves will be adequate to cover credit losses. If our credit reserves are insufficient, we may be adversely affected.

Our reserves for loan losses may prove inadequate, which could have a material adverse effect on us.

We maintain and regularly evaluate financial reserves to protect against potential future losses. Our reserves reflect management’s judgment of the probability and severity of losses. We cannot be certain that our judgment will prove to be correct and that reserves will be adequate over time to protect against potential future losses because of unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. We must evaluate existing conditions on our debt investments to make determinations to record loan loss reserves on these specific investments. If our reserves for credit losses prove inadequate, we could suffer losses which would have a material adverse effect on our financial performance.

43

Fraud by potential borrowers could cause us to suffer losses.

A potential borrower could defraud us by, among other things: directing the proceeds of collections of its accounts receivable to bank accounts other than our established lockboxes; failing to accurately record accounts receivable aging; overstating or falsifying records showing accounts receivable; or providing inaccurate reporting of other financial information. The failure of a potential borrower to accurately report its financial position, compliance with loan covenants or eligibility for additional borrowings could result in the loss of some or the entire principal of a particular loan or loans.

If the loans that we originate or purchase do not comply with applicable laws, we may be subject to penalties.

Loans that we originate or purchase may be directly or indirectly subject to U.S. laws. Real estate lenders and borrowers may be responsible for compliance with a wide range of law intended to protect the public interest, including, without limitation, the Truth in Lending, Equal Credit Opportunity, Fair Housing and Americans with Disabilities Acts and local zoning laws (including, but not limited, to zoning laws that allow permitted non-conforming uses). If we or any other person fail to comply with such laws in relation to a loan that we have purchased or originated, legal penalties may be imposed, and our business may be adversely affected as a result. Additionally, jurisdictions with “one action,” “security first” and/or “antideficiency rules” may limit our ability or the ability of a special servicer of a CMBS issuance to foreclose on a real property or to realize on obligations secured by a real property. In the future, new laws may be enacted or imposed by federal, state or local governmental entities, and such laws may have an adverse effect on our business.

We are subject to various risks relating to non-U.S. securities and loans that may make them more risky than our investments in U.S.-based securities and loans.

Investments in securities or loans of non-U.S. issuers or borrowers or on non-U.S. properties and securities denominated or whose prices are quoted in non-U.S. currencies pose, to the extent not hedged, currency exchange risks (including blockage, devaluation and nonexchangeability), as well as a range of other potential risks which could include expropriation, confiscatory taxation, withholding or other taxes on interest, dividends, capital gain or other income, political or social instability, illiquidity, price volatility, market manipulation and the burdens of complying with international licensing and regulatory requirements and prohibitions that differ between jurisdictions. In addition, less information may be available regarding non-U.S. properties or securities of non-U.S. issuers or borrowers and non-U.S. issuers or borrowers may not be subject to accounting, auditing and financial reporting standards and requirements comparable to or as uniform as those of U.S. issuers. Transaction costs of investing in non-U.S. securities or loan markets are generally higher than in the United States, and there may be less government supervision and regulation of exchanges, brokers and issuers than there is in the United States. We might have greater difficulty taking appropriate legal action in non-U.S. courts and non-U.S. markets also have different clearance and settlement procedures which in some markets have at times failed to keep pace with the volume of transactions, thereby creating substantial delays and settlement failures that could adversely affect our performance.

44

Risks Related to Our Indebtedness

Our access to additional financing may be limited. There can be no assurance that we will be able to utilize financing facilities in the future on favorable terms, or at all.

There is no assurance that we will be able to obtain, maintain or renew our financing facilities on terms favorable to us or at all. Furthermore, any financing facility that we enter into will be subject to conditions and restrictive covenants relating to our operations, which may inhibit our ability to grow our business and increase revenues. To the extent we breach a covenant or cannot satisfy a condition, such facility may not be available to us, or may be required to be repaid in full or in part, which could limit our ability to pursue our business strategies. Further, such borrowings may limit the length of time during which any given asset may be used as eligible collateral.

Additionally, if we are unable to securitize our loans to replenish a warehouse line of credit, we may be required to seek other forms of potentially less attractive financing or otherwise to liquidate our assets. Furthermore, some of our warehouse lines of credit contain cross-default provisions. If a default occurs under one of these warehouse lines of credit and the lenders terminate one or more of these agreements, we may need to enter into replacement agreements with different lenders. There can be no assurance that we will be successful in entering into such replacement agreements on the same terms as the terminated warehouse line of credit.

The utilization of any of our repurchase and warehouse facilities and other financing arrangements is subject to the pre- approval of the lender, which we may be unable to obtain.

In order to borrow funds under a repurchase or warehouse agreement or other financing arrangement, the lender has the right to review the potential assets for which we are seeking financing and approve such asset in its sole discretion. Accordingly, we may be unable to obtain the consent of a lender to finance an investment and alternate sources of financing for such asset may not exist.

Our use of repurchase agreements to finance our securities and/or loans may give our lenders greater rights in the event that either we or a lender files for bankruptcy, including the right to repudiate our repurchase agreements, which could limit or delay our claims.

In the event of our insolvency or bankruptcy, certain repurchase agreements may qualify for special treatment under the U.S. Bankruptcy Code, the effect of which, among other things, would be to allow the lender under the applicable repurchase agreement to avoid the automatic stay provisions of the U.S. Bankruptcy Code and to foreclose on the collateral agreement without delay. In the event of the insolvency or bankruptcy of a lender during the term of a repurchase agreement, the lender may be permitted under applicable insolvency laws to repudiate the contract, and our claim against the lender for damages may be treated simply as an unsecured claim. In addition, if the lender is a broker or dealer subject to the Securities Investor Protection Act of 1970, or an insured depository institution subject to the Federal Deposit Insurance Act, our ability to exercise our rights to recover our securities under a repurchase agreement or to be compensated for any damages resulting from the lender’s insolvency may be further limited by those statutes. These claims would be subject to significant delay and, if and when received, may be substantially less than the damages we actually incur. Therefore, our use of repurchase agreements to finance our portfolio assets exposes our pledged assets to risk in the event of a bankruptcy filing by either a lender or ourselves.

45

If a counterparty to our repurchase transactions defaults on its obligation to resell the underlying security and/or loans to us at the end of the transaction term, or if the value of the underlying security and/or loans has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we will lose money on our repurchase transactions.

When we engage in repurchase transactions, we generally sell securities and/or loans to lenders (i.e., repurchase agreement counterparties) in return for cash from the lenders. The lenders then are obligated to resell the same securities and/or loans to us at the end of the term of the transaction. In a repurchase agreement, the cash we receive from a lender when we initially sell the securities and/or loans to such lender is less than the value of the securities and/or loans sold. If the lender defaults on its obligation to resell the same securities and/or loans to us under the terms of a repurchase agreement, we will incur a loss on the transaction equal to the difference between the value of the securities and/or loans sold and the cash we received from the lender (assuming there was no change in the value of the securities and/or loans). We also would lose money on a repurchase transaction if the value of the underlying securities and/or loans has declined as of the end of the transaction term, as we would have to repurchase the securities and/or loans for their initial value but would receive securities and/or loans worth less than that amount. Further, if we default on one of our obligations under a repurchase transaction, the lender will be able to terminate the transaction and cease entering into any other repurchase transactions with us. Our repurchase agreements generally contain cross-default provisions, so that if a default occurs under any one agreement, the lenders under our other agreements also could declare a default. If a default occurs under any of our repurchase agreements and the lenders terminate one or more of their repurchase agreements, we may need to enter into replacement repurchase agreements with different lenders. There can be no assurance that we will be successful in entering into such replacement repurchase agreements on the same terms as the repurchase agreements that were terminated or at all. Any losses that we incur on our repurchase transactions could adversely affect our earnings.

We may be subject to repurchases of loans or indemnification on loans and real estate that we have sold if certain representations or warranties in those sales are breached.

If loans that we sell or securitize do not comply with representations and warranties that we make about the loans, the borrowers, or the underlying properties, we may be required to repurchase such loans (including from a trust vehicle used to facilitate a structured financing of the assets through a securitization) or replace them with substitute loans. Additionally, in the case of loans and real estate that we have sold, we may be required to indemnify persons for losses or expenses incurred as a result of a breach of a representation or warranty. Repurchased loans typically will require a significant allocation of working capital to be carried on our books, and our ability to borrow against such assets may be limited. Any significant repurchases or indemnification payments could adversely affect our business.

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our Notes and other indebtedness, and could have a material adverse effect on the value of our common stock.

We have, and will continue to have, a significant amount of indebtedness. At March 31, 2013, we and our subsidiaries had approximately $1.3 billion of aggregate principal amount of indebtedness outstanding, of which $989.1 million was secured indebtedness. Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. Our substantial indebtedness could have other important consequences to you and significant effects on our business. For example, it could;

• make it more difficult for us to satisfy our obligations with respect to our Notes and other debt securities, and our other debt;

46

• increase our vulnerability to adverse changes in general economic, industry and competitive conditions;

• require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• restrict us from capitalizing on business opportunities;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit our ability to borrow additional funds for working capital, acquisitions, debt service requirements, execution of our business strategy or other general corporate purposes.

The occurrence of any one or more of these effects could have a material adverse effect on the value of our common stock.

In addition, the credit agreements governing our funding debt and the indenture governing our Notes contain, and the agreements governing future indebtedness and future debt securities may contain, restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default that, if not cured or waived, could result in the acceleration of all of our indebtedness, which could lead to a substantial loss and a material adverse effect on the value of our common stock.

We will depend on distributions from our subsidiaries to fulfill our obligations under our indebtedness.

Our ability to service debt obligations, including our ability to pay the interest on and principal of our credit facilities, Notes and other debt securities when due, will be dependent upon cash distributions or other transfers from our subsidiaries. Payments to us by our subsidiaries will be contingent upon their respective earnings and subject to any limitations on the ability of such entities to make payments or other distributions to us, including limitations imposed by individual debt arrangements at these subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to make any funds available to us.

Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage.

Subject to the debt to equity ratio covenants in our credit facilities and the terms of the indenture governing our Notes, both of which limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness, we and our subsidiaries may be able to incur significant additional indebtedness in the future. The terms of the indenture governing our Notes permit us to incur significant additional indebtedness. To the extent that we incur additional indebtedness or such other obligations, the risk associated with our substantial indebtedness described above, including our possible inability to service our debt, will increase. In addition, because certain of our outstanding indebtedness bears interest at variable rates of interest, we are exposed to risk from fluctuations in interest rates. We may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk, or may create additional risks.

47

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

Generally, the debt we have incurred to finance the mortgage loans we originate matures sooner than those mortgage loans. Our ability to make payments on and to refinance our indebtedness, including the Notes, and to fund working capital needs will depend on our ability to generate cash in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness, on or before the maturity thereof, sell assets or seek to raise additional capital, any of which could have a material adverse effect on our operations and the value of our common stock. In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness, will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future indebtedness may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest or principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations, as well as the value of our common stock.

Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our financial condition and results of operations.

If there were an event of default under any of the agreements relating to our outstanding indebtedness, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. Our assets or cash flow could be insufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. Further, if we are unable to repay, refinance or restructure our indebtedness under our secured debt, the holders of such debt could proceed against the collateral securing that indebtedness. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments. As a result, any default by us on our indebtedness could have a material adverse effect on our business and could have a material adverse effect on the value of our common stock.

The indenture governing our Notes and the credit agreements governing our funding debt will restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

The indenture governing our Notes and the credit agreements governing our funding debt will impose significant operating and financial restrictions and limit the ability of LCFH, Ladder Capital Finance Corporation and their restricted subsidiaries to, among other things:

• incur additional indebtedness and guarantee indebtedness;

48

• pay dividends or make other distributions in respect of, or repurchase or redeem, partnership interests or capital stock;

• prepay, redeem or repurchase certain debt;

• sell or otherwise dispose of assets;

• sell stock of our subsidiaries;

• incur liens;

• enter into transactions with affiliates;

• enter into agreements restricting our subsidiaries’ ability to pay dividends; and

• consolidate, merge or sell all or substantially all of our assets.

As a result of these covenants and restrictions, we are and will be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. In addition, we will be required to maintain specified financial ratios and satisfy other financial condition tests. The terms of any future indebtedness we may incur could include more restrictive covenants. We may be unable to maintain compliance with these covenants in the future and, if we fail to do so, we may be unable to obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above as well as others contained in our future debt instruments from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition, as well as the value of our common stock, could be adversely affected.

Risks Related to Regulatory and Compliance Matters

One of our subsidiaries is registered as a broker-dealer and is subject to various broker-dealer regulations. Violations of these regulations could result in revocation of broker-dealer licenses, fines or other disciplinary action.

We have a subsidiary that is registered as a broker-dealer with the SEC and in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and is a member of the Financial Industry Regulatory Authority (“FINRA”). This subsidiary is subject to regulations that cover all aspects of its business, including sales methods, trade practices, use and safekeeping of clients’ funds and securities, the capital structure of the subsidiary, recordkeeping, the financing of clients’ purchases and the conduct of directors, officers and employees. The SEC and FINRA have also imposed both conduct-based and disclosure-based requirements with respect to research reports. Violation of these regulations can result in the revocation of broker-dealer licenses (which could result in our having to hire new licensed investment professionals before continuing certain operations), the imposition of censure or fines and the suspension or expulsion of the subsidiary, its officers or employees from FINRA. In addition, our broker-dealer subsidiary is subject to routine periodic examination by the staff of FINRA.

As a registered broker-dealer and member of a self-regulatory organization, our broker-dealer subsidiary is subject to the SEC’s uniform net capital rule. Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. The SEC and FINRA impose rules that require

49

notification when net capital falls below certain predefined criteria, limit the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC’s uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.

The Dodd-Frank Act will result in additional regulation by the SEC, the U.S. Commodity Futures Trading Commission (“CFTC”) and other regulators of our broker-dealer subsidiary. The legislation calls for the imposition of expanded standards of care by market participants in dealing with clients and customers, including by providing the SEC with authority to adopt rules establishing fiduciary duties for broker-dealers and directing the SEC to examine and improve sales practices and disclosure by broker-dealers and investment advisers. Our broker-dealer subsidiary will also be affected by rules to be adopted by federal agencies pursuant to the Dodd-Frank Act that require any person who organizes or initiates an asset-backed security transaction to retain a portion (generally, at least five percent) of any credit risk that the person conveys to a third party. Securitizations will also be affected by rules proposed by the SEC in September 2011 to implement the Dodd-Frank Act’s prohibition against securitization participants’ engaging in any transaction that would involve or result in any material conflict of interest with an investor in a securitization transaction. The proposed rules would except bona fide market-making activities and risk-mitigating hedging activities in connection with securitization activities from the general prohibition.

If our subsidiaries that are regulated as registered investment advisers are unable to meet the requirements of the SEC or fail to comply with certain federal and state securities laws and regulations, they may face termination of their investment adviser registration, fines or other disciplinary action.

Two of our subsidiaries are regulated by the SEC as registered investment advisers. Registered investment advisers are subject to the requirements and regulations of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Such requirements relate to, among other things, fiduciary duties to advisory clients, maintaining an effective compliance program, solicitation agreements, conflicts of interest, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an advisor and advisory clients and general anti-fraud prohibitions. In addition, our investment adviser subsidiaries are subject to routine periodic examinations by the staff of the SEC. The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations. Non-compliance with the Advisers Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines and reputational damage.

If our subsidiaries that are regulated as registered investment advisers are unable to successfully negotiate the terms of their management fees, our results of operations could be negatively impacted.

Our asset management business depends in large part on our ability to raise capital from third-party investors. If we are unable to raise capital from third-party investors, we would be unable to collect management fees or deploy their capital into investments and potentially receive additional fees and compensation, which would materially reduce our revenue and cash flow and adversely affect our financial condition.

50

In connection with creating new investment products or securing additional investments in existing accounts and vehicles, we negotiate terms with existing and potential investors. The outcome of such negotiations could result in our agreement to terms that are materially less favorable to us than the terms of other accounts or vehicles one of our investment adviser subsidiaries has advised. Such terms could restrict our subsidiaries’ ability to advise accounts or vehicles with investment objectives or strategies that compete with existing accounts or vehicles, reduce fee revenues we earn, reduce the percentage of profits on third-party capital that we share in or add expenses and obligations for us in managing the accounts or vehicles or increase our potential liabilities, all of which could ultimately reduce our profitability. Moreover, certain institutional investors have publicly criticized certain fund fee and expense structures, including management fees. Any modification of the compensation structures for new investment funds could adversely affect our results of operations.

If our subsidiary that operates as a captive insurance company fails to comply with insurance laws or is no longer a member of the FHLB, our sources of financing may be limited, which may have an adverse financial impact on the captive and us.

We maintain a captive insurance company to provide coverage previously self-insured by us, including nuclear, biological or chemical coverage, excess property coverage and excess errors and omissions coverage. The captive is regulated by the State of Michigan and is subject to regulations that cover all aspects of its business, including a requirement to maintain a certain minimum net capital. Violation of these regulations can result in revocation of its authorization to do business as a captive insurer or result in censures or fines. The captive could also be found to be in violation of the insurance laws of states other than Michigan (i.e., states where insureds are located), in which case fines and penalties could apply from those states. Any limitation on the activities of the captive and regulatory proceeding, regulatory limitation or sanction, loss of license or change of laws or regulation affecting the captive could affect the ability of the captive to borrow from the FHLB and thereby limit a source of financing for our operations.

The captive is a member of the FHLB, and as such, is eligible to borrow funds, on a fully collateralized basis, in accordance with the terms and conditions of the FHLB’s Advances, Pledge and Security Agreement. As a member, the captive is required to purchase shares of the FHLB based on the amount of funds borrowed. The organization of the captive and its membership in the FHLB is viewed as a risk financing and investment vehicle of Ladder. Like any other investment, the captive’s participation in the FHLB involves some risk of loss, both with respect to the shares of the FHLB and the assets provided by the captive as collateral. Furthermore, if the captive’s membership in the FHLB is terminated, then it may have an adverse financial impact on the captive and us.

The FHFA may pass regulatory initiatives adverse to captive insurance companies which may lead to limited lending to captive insurance companies and possibly termination of our FHLB membership.

The FHFA is the regulator of the FHLB. The FHFA has issued two formal regulatory initiatives to address its concerns regarding captive insurance companies as members of the FHLB. These initiatives could (i) impact whether additional captive insurance companies may become members of an FHLB, (ii) limit lending by FHLB to captive insurance companies members, (iii) incentivize captive insurance companies to voluntarily withdraw from membership or (iv) dictate the involuntary termination of captive insurance companies and the associated repayment of their outstanding financing. Although we do not expect the FHFA to issue proposed rules in the near term, there can be no assurance that any such proposed rules will not adversely impact our captive insurance company and its access to lending by the FHLB.

51

Regulatory changes in the United States, regulatory compliance failures and the effects of negative publicity surrounding the financial industry in general could adversely affect our reputation, business and operations.

Potential regulatory action poses a significant risk to our reputation and our business. Certain of our subsidiaries’ businesses are subject to extensive regulation in the United States and may rely on exemptions from various requirements of the Securities Act, the Exchange Act, the Investment Company Act, and the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”). These exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third-parties who we do not control. If for any reason these exemptions were to be revoked or challenged or otherwise become unavailable to us, we could be subject to regulatory action or third-party claims, and our business could be materially and adversely affected.

We may become subject to additional regulatory and compliance burdens as our investment adviser subsidiaries expand their product offerings and investment platform. For example, if one of our investment adviser subsidiaries were to advise a registered investment company under the Investment Company Act, such registered investment company and our subsidiary that serves as its investment adviser would be subject to the Investment Company Act and the rules thereunder, which, among other things, regulate the relationship between a registered investment company and its investment adviser and prohibit or severely restrict principal transactions and joint transactions. This could increase our compliance costs and create the potential for additional liabilities and penalties.

Each of the regulatory bodies with jurisdiction over one or more of our subsidiaries has regulatory powers dealing with many aspects of financial services, including the authority to grant, and in specific circumstances to cancel, permissions to carry on particular activities. A failure to comply with the obligations imposed by the Advisers Act, including recordkeeping, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, could result in investigations, sanctions and reputational damage. We may be involved in trading activities which implicate a broad number of U.S. securities law regimes, including laws governing trading on inside information, market manipulation and a broad number of technical trading requirements that implicate fundamental market regulation policies. Violation of these laws could result in severe restrictions on our activities and damage to our reputation.

In addition, once we become a publicly traded company or otherwise have publicly traded securities such as the Notes, we may be subject to additional regulation, including the Sarbanes-Oxley Act of 2002 and other applicable securities rules and regulations. Compliance with these rules and regulations may increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.

Our failure to comply with applicable laws or regulations could result in fines, censure, suspensions of personnel or other sanctions, including revocation of the registration of our relevant subsidiary as an investment adviser or registered broker-dealer. Even if a sanction imposed against us, one of our subsidiaries or our personnel by a regulator is for a small monetary amount, the adverse publicity related to the sanction could harm our reputation, which in turn could materially adversely affect our business in a number of ways, such as causing investors to redeem their capital (to the degree they have that right), making it harder for us to create new investment products and discouraging others from doing business with us.

52

As a result of market disruption as well as highly publicized financial scandals, regulators and investors have exhibited concerns over the integrity of the U.S. financial markets, and the business in which we operate both in the United States and outside the United States is likely to be subject to further regulation. In recent years, there has been debate in the United States and abroad about new rules or regulations to be applicable to hedge funds or other alternative investment products and their managers. On July 21, 2010, President Obama signed into law the Dodd-Frank Act. The Dodd-Frank Act, among other things, imposes significant new regulations on nearly every aspect of the U.S. financial services industry, including oversight and regulation of systemic market risk (including the power to liquidate certain institutions); authorizing the Federal Reserve to regulate nonbank institutions; generally prohibiting insured depository institutions and their affiliates from conducting proprietary trading and investing in private equity funds and hedge funds; promulgating regulations that affect securitizations and imposing new registration, recordkeeping and reporting requirements on private fund investment advisers. Importantly, many key aspects of the changes imposed by the Dodd-Frank Act will be established by various regulatory bodies and other groups over the next several years. Several key terms in the Dodd-Frank Act have been left to regulators to define through rulemaking authority, including terms relating to various issues that affect securitizations. As discussed in “—Our participation in the market for nonrecourse long-term securitizations may expose us to risks that could result in losses to us” and “Business—Regulation,” various federal agencies have promulgated, or are in the process of creating, regulations which, if adopted, could alter the structure of securitizations, pose additional risks to our participation in future securitizations, or could reduce or eliminate the economic incentives of participating in future securitizations. Further, while we already have one of our subsidiaries registered as an investment adviser subject to SEC examinations and another subsidiary registered as a broker-dealer subject to FINRA examinations, the imposition of any additional legal or regulatory requirements could make compliance more difficult and expensive, affect the manner in which we conduct our business and adversely affect our profitability.

In addition, on February 8, 2012, the CFTC, adopted new rules eliminating certain exemptions from commodity pool operator (“CPO”), and commodity trading advisor (“CTA”), registration on which may have relied in operating any new investment funds. The repeal of these exemptions and the new rules are designed to enhance the CFTC’s oversight of market participants and to allow it to more effectively manage the risks that such participants may pose to the markets. If we were to become subject to CPO or CTA registration and compliance obligations, then we would likely incur increased administrative costs from the additional regulatory, reporting and compliance burdens imposed on our subsidiaries’ fund-related activities.

In June 2010, the SEC approved Rule 206(4)-5 under the Advisers Act regarding “pay to play” practices by investment advisers involving campaign contributions and other payments to government clients and elected officials able to exert influence on such clients. The rule prohibits investment advisers from providing advisory services for compensation to a government client for two years, subject to very limited exceptions, after the investment adviser, its senior executives or its personnel involved in soliciting investments from government entities make contributions to certain candidates and officials in position to influence the hiring of an investment adviser by such government client. Advisers are required to implement compliance policies designed, among other matters, to track contributions by certain of the adviser’s employees and engagement of third-parties that solicit government entities and to keep certain records in order to enable the SEC to determine compliance with the rule. Any failure on our part to comply with the rule could expose us to significant penalties and reputational damage. In addition, there have been similar rules on a state-level regarding “pay to play” practices by investment advisers.

53

It is impossible to determine the extent of the impact on us of the Dodd-Frank Act or any other new laws, regulations or initiatives that may be proposed or whether any of the proposals will become law. Any changes in the regulatory framework applicable to our business, including the changes described above, may impose additional costs on us, require the attention of our senior management or result in limitations on the manner in which we conduct our business. Moreover, as calls for additional regulation have increased, there may be a related increase in regulatory investigations of the investment activities of alternative asset management funds, including any funds advised by our investment adviser subsidiaries. In addition, we may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations. Compliance with any new laws or regulations could make compliance more difficult and expensive, affect the manner in which we conduct our business and adversely affect our profitability.

Employee misconduct could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.

There is a risk that our employees could engage in misconduct that adversely affects our business. We are subject to a number of obligations and standards arising from our regulated businesses and our authority over the assets managed by our asset management business. The violation of these obligations and standards by any of our employees would adversely affect our clients and us. If our employees were improperly to use or disclose confidential information obtained during discussions regarding a potential investment, we could suffer serious harm to our reputation, financial position and current and future business relationships. It is not always possible to detect or deter employee misconduct, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases. If one of our employees were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected.

One of our subsidiaries that advises private investment funds may provide investors the right to redeem their investments in these funds or to cause these funds to be dissolved. In addition, the investment management agreements related to our separately managed accounts may permit the investor to terminate our management of such account on short notice. Any of these events would lead to a decrease in our revenues, which could be substantial.

Investors in any private investment funds advised by one of our subsidiaries may have the right redeem their investments on an annual, semi-annual or quarterly basis following the expiration of a specified period of time when capital may not be withdrawn, subject to the applicable fund’s specific redemption provisions. In a declining market, the pace of redemptions and consequent reduction in our subsidiary’s assets under management could accelerate. The decrease in revenues that would result from significant redemptions in our subsidiary’s funds could have a material adverse effect on our business, revenues, net income and cash flows.

One of our subsidiaries currently manages certain separately managed accounts whereby it earns management and incentive fees. The investment management agreements our subsidiary enters into in connection with managing separately managed accounts on behalf of certain clients may be terminated by such clients on relatively short notice. In the case of any such terminations, the management and incentive fees our subsidiary earns in connection with managing such account would cease, which could result in an adverse impact on our revenues.

The governing agreements of any private investment funds advised by one of our subsidiaries may provide that, subject to certain conditions, third-party investors in those funds will have the right to remove the general partner of the fund or to accelerate the liquidation date

54

of the investment fund without cause by a simple majority vote, resulting in a reduction in the compensation we would earn from such investment funds. Finally, the applicable funds would cease to exist. In addition to having a negative impact on our revenue, net income and cash flow, the occurrence of such an event with respect to any of our investment funds could result in significant reputational damage to us.

We cannot be certain that consents required for assignments of our investment management agreements will be obtained if a change of control occurs at the Company, which may result in the termination of these agreements and a corresponding loss of revenue.

All of our separately managed accounts and private funds do and would have an adviser that is regulated as a registered investment adviser under the Advisers Act, which requires these investment management agreements to be terminated upon an “assignment” without investor consent. Such “assignment” may be deemed to occur in the event such adviser was to experience a direct or indirect change of control (at the Company level). Termination of these agreements would cause us to lose the fees we earn from such accounts or funds.

Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations or assumptions could impact our consolidated financial statements.

Accounting rules for transfers of financial assets, securitization transactions, consolidation of variable interest entities, or VIEs, and other aspects of our anticipated operations are highly complex and involve significant judgment and assumptions. These complexities could lead to a delay in preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions could impact our consolidated financial statements, result in a need to restate our financial results and affect our ability to timely prepare our consolidated financial statements. Our inability to timely prepare our consolidated financial statements in the future would likely adversely affect our security prices significantly.

Risks Related to our REIT Subsidiary

The federal income tax laws governing REITs are complex, and we may choose to discontinue our REIT operations. Therefore, there is no assurance that our subsidiary that is a REIT has qualified or will continue to qualify as a REIT.

We believe that the Ladder REIT qualifies as a REIT for U.S. federal income tax purposes and has qualified as a REIT under the federal income tax rules since its organization. The REIT rules and regulations under the U.S. Internal Revenue Code of 1986, as amended (the “Code”) are highly technical and complex and only limited judicial and administrative authorities exist interpreting these provisions. To qualify as a REIT for U.S. federal income tax purposes, the Ladder REIT must continually satisfy tests concerning, among other things, the sources of its income (“income tests”), the nature and diversification of its assets (“asset tests”), the amounts that it distributes to its stockholders and the ownership of its shares. Even a technical or inadvertent violation could jeopardize the Ladder REIT’s qualification as a REIT. Accordingly, there is no assurance that the Ladder REIT has qualified or will continue to qualify as a REIT. In addition, we may also choose to discontinue the Ladder REIT in the future and therefore, there is no assurance that we will continue to do business through our REIT subsidiary.

We could be adversely affected by legislative or regulatory tax changes governing REITs, which could have retroactive effect.

At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended, possibly with

55

retroactive effect. We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. We could be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation or administrative interpretation.

Failure to qualify as a REIT would subject the Ladder REIT to federal income tax, which may harm its financial performance and affect its ability to elect REIT status in the future.

If the Ladder REIT fails to qualify as a REIT in any taxable year for which the statute of limitations remains open, it would not be allowed a deduction for dividends paid to shareholders in computing taxable income and would be subject to U.S. federal and state income tax at regular corporate rates (including any applicable alternative minimum tax) for such taxable year. The Ladder REIT might need to borrow money or sell assets in order to obtain the funds necessary to pay any such tax. If the Ladder REIT failed to qualify as a REIT in a given year and were not entitled to relief under the Code, it could not re-elect REIT status until the fifth calendar year following the year in which it failed to qualify. These adverse circumstances could affect the Ladder REIT for five or more years because, unless entitled to relief under the Code, the Ladder REIT would be taxable as a corporation beginning in the year in which the failure occurs and it would not be allowed to re-elect REIT status for four years.

Due to the complexity of the REIT rules, the Ladder REIT may not satisfy its asset tests.

The Ladder REIT’s ability to satisfy the asset tests for REIT qualification depends upon its analysis of the characterization and fair market values of its assets, some of which are not susceptible to a precise determination, and for which the Ladder REIT will not obtain independent appraisals. While we intend to operate the Ladder REIT so that it will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, our Ladder REIT may not qualify for REIT status for any particular year and thus may be subject to significant taxes.

The Ladder REIT intends to enter into repurchase agreements under which it will nominally sell certain assets to a counterparty and simultaneously enter into an agreement to repurchase the sold assets. The Ladder REIT intends to treat such repurchase agreements as secured loans for U.S. federal income tax purposes. The U.S. Internal Revenue Service (“IRS”) could assert, however, that the Ladder REIT does not own the relevant assets during the term of such repurchase agreements, in which case the Ladder REIT could fail to qualify as a REIT. In addition, the Ladder REIT may fail to qualify for certain safe harbors relating to the IRS’s REIT asset tests, or the IRS could successfully challenge the REIT asset and income tests of the Ladder REIT.

Liquidation of the Ladder REIT’s assets may jeopardize its REIT qualification or subject it to significant taxes.

To qualify as a REIT, an entity must continually comply with requirements including, among other things, the assets and income tests. If the Ladder REIT is compelled to liquidate its assets to repay obligations to its lenders, it may be unable to comply with these requirements, thereby jeopardizing its qualification as a REIT, or it may be subject to a 100% tax on any resultant gain if it sells assets that are treated as inventory or property held primarily for sale to customers in the ordinary course of business.

56

Complying with REIT requirements may cause the Ladder REIT to forgo otherwise attractive investment opportunities or business combination opportunities.

To qualify as a REIT, the Ladder REIT must continually satisfy tests including the asset and income tests, and comply with tests concerning, among other things, the amounts it distributes to its members and the ownership of its stock. To meet its annual distribution requirements, the Ladder REIT may be required to distribute amounts that may otherwise be used for our operations, including amounts that may otherwise be invested in future acquisitions, or repayment of debt and it is possible that we might be required to borrow funds, sell assets or raise equity to fund these distributions, even if the then-prevailing market conditions are not favorable for these borrowings, or sales. The Ladder REIT may be required to make distributions to us at disadvantageous times or when it does not have funds readily available for distribution, and may be unable to pursue investments or business combinations that would be otherwise advantageous in order to satisfy the income or asset tests. Thus, compliance with the REIT requirements may hinder the ability of the Ladder REIT to make certain attractive investments, or engage in business combination transactions.

Complying with REIT requirements may force the Ladder REIT to liquidate otherwise attractive investments.

To qualify as a REIT, the Ladder REIT must ensure that at the end of each calendar quarter it satisfies certain asset tests. If the Ladder REIT fails to satisfy any of these requirements at the end of any calendar quarter, it must correct the failure within 30 days after the end of such calendar quarter or qualify for certain statutory relief provisions to avoid losing its REIT qualification and suffering adverse tax consequences. As a result, the Ladder REIT may be required to liquidate from its portfolio otherwise attractive investments. These actions could reduce its income and the amount available for distribution to us.

Complying with REIT requirements may limit the Ladder REIT’s ability to hedge effectively.

The REIT provisions of the Code may limit the Ladder REIT’s ability to hedge its assets and liabilities which are not incurred to acquire real estate. Under these provisions, any income that a REIT generates from transactions intended to hedge its interest rate risk will be excluded from gross income for purposes of the REIT gross income tests if the instrument hedges interest rate risk on liabilities used to carry or acquire real estate assets, and such instrument is properly identified for tax purposes under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements generally will constitute nonqualifying income for purposes of the REIT gross income tests. As a result of these rules, the Ladder REIT may have to limit its use of hedging techniques that might otherwise be advantageous, or implement those hedges through a TRS. This limitation could expose us to greater risks associated with changes in interest rates than we would otherwise want to bear, or increase the Ladder REIT’s cost of hedging activities, because a TRS would be subject to tax on income or gains resulting from hedges entered into by it. In addition, losses in such TRS generally will not provide any tax benefit, except for being carried forward against future taxable income in such TRS.

The tax on prohibited transactions will limit the Ladder REIT’s ability to engage in transactions, including certain methods of securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% excise tax. In general, prohibited transactions are sales or other dispositions of property (excluding foreclosure property, but including mortgage loans) held as inventory or primarily for sale to customers in

57

the ordinary course of business. A REIT might be subject to this tax if it were to sell or securitize loans in a manner that was treated as a sale of the loans as inventory for U.S. federal income tax purposes. Therefore, in order to avoid the prohibited transactions tax, the Ladder REIT may choose not to engage in certain sales of loans, other than through a TRS, and the Ladder REIT may be required to limit the structures it uses for its securitization transactions, even though such sales or structures might otherwise be beneficial for our business.

The Ladder REIT may be subject to U.S. federal, state and local taxes on its income and assets and this may decrease the cash available for distribution to us.

Even if the Ladder REIT qualifies for taxation as a REIT, it may be subject to certain U.S. federal, state and local taxes on its income and assets, including taxes on any undistributed income, taxes on income from some activities conducted as a result of a foreclosure, and state or local income, franchise, property and transfer taxes, including mortgage recording taxes. Further, the Ladder REIT could, in certain circumstances be required to pay an excise tax or penalty tax (which could be significant in amount) in order to utilize one or more of the relief provisions under the Code to maintain its qualification as a REIT. In addition, any TRSs owned by the Ladder REIT will be subject to U.S. federal, state and local corporate taxes. Any taxes paid by such TRSs would decrease the cash available for distribution to us. Furthermore, the Code imposes a 100% tax on certain transactions between a TRS and the Ladder REIT that are not conducted on an arm’s length basis. The Ladder REIT intends to structure any transaction with a TRS on terms that it believes are arm’s length to avoid incurring this 100% excise tax. There can be no assurances, however, that it will be able to avoid application of the 100% tax.

Risks Related to Our Investment Company Act Exemption

Maintenance of our exemption from registration under the Investment Company Act imposes significant limits on our operations. The value of our securities, including our Class A common stock may be adversely affected if we are required to register as an investment company under the Investment Company Act.

We intend to conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act. If we were unable to maintain an exemption from registration under the Investment Company Act, we could, among other things, be required either to (a) substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company under the Investment Company Act, any of which could have an adverse effect on us and the value of our securities.

If we or any of our subsidiaries were required to register as an investment company under the Investment Company Act, the registered entity would become subject to substantial regulation with respect to capital structure (including the ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration, compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations. For example, because affiliate transactions are generally prohibited under the Investment Company Act, we would not be able to enter into certain transactions with any of our affiliates if we are required to register as an investment company, which could have a material adverse effect on our ability to operate our business.

58

If we were required to register us as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

We believe we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we will not engage primarily, or hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. However, under Section 3(a)(1)(C) of the Investment Company Act, because we are a holding company that will conduct its businesses primarily through wholly-owned subsidiaries, the securities issued by these subsidiaries that are excepted from the definition of “investment company” under Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a combined value in excess of 40% of the value of our adjusted total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). This requirement limits the types of businesses in which we may engage through our subsidiaries. In addition, the assets we and our subsidiaries may originate or acquire are limited by the provisions of the Investment Company Act and the rules and regulations promulgated thereunder, which may adversely affect our business.

We expect that certain of our subsidiaries may rely on the exemption from registration as an investment company under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exemption generally requires that at least 55% of these subsidiaries’ assets must comprise qualifying real estate assets and at least 80% of each of their portfolios must comprise qualifying real estate assets and real estate-related assets under the Investment Company Act. We expect each of our subsidiaries relying on Section 3(c)(5)(C) to rely on guidance published by the SEC staff or on our analyses of such guidance to determine which assets are qualifying real estate assets and real estate-related assets. However, the SEC’s guidance was issued in accordance with factual situations that may be substantially different from the factual situations we may face, and much of the guidance was issued more than 20 years ago. We have not received, nor have we sought, a no-action letter from the SEC regarding how our investment strategy fits within the exclusions from regulation under the Investment Company Act that we and our subsidiaries are using. The SEC staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of qualifying for an exclusion from regulation under the Investment Company Act. If we are required to re-classify our assets, certain of our subsidiaries may no longer be in compliance with the exemption from the definition of an “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act. To the extent that the SEC staff publishes new or different guidance with respect to any assets we have determined to be qualifying real estate assets, we may be required to adjust our strategy accordingly. In addition, we may be limited in our ability to make certain investments and these limitations could result in a subsidiary holding assets we might wish to sell or selling assets we might wish to hold.

Any of the Company or our subsidiaries may rely on the exemption provided by Section 3(c)(6) of the Investment Company Act to the extent that they primarily engage, directly or through majority-owned subsidiaries, in the businesses described in Sections 3(c)(3), 3(c)(4) and 3(c)(5) of the Investment Company Act. The SEC staff has issued little interpretive guidance with respect to Section 3(c)(6) and any guidance published by the staff could require us to adjust our strategy accordingly.

We determine whether an entity is one of our majority-owned subsidiaries. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company

59

which is a majority-owned subsidiary of such person. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We treat companies in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested the SEC to approve our treatment of any company as a majority-owned subsidiary and the SEC has not done so. If the SEC were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any such adjustment in our strategy could have a material adverse effect on us.

In 2011, the SEC solicited public comment on a wide range of issues relating to Section 3(c)(5)(C) of the Investment Company Act, including the nature of the assets that qualify for purposes of the exemption and whether companies that are engaged in the business of acquiring mortgages and mortgage-related instruments should be regulated in a manner similar to investment companies. There can be no assurance that the laws and regulations governing the Investment Company Act status of such companies, including the SEC or its staff providing more specific or different guidance regarding Section 3(c)(5)(C), will not change in a manner that adversely affects our operations. If we or our subsidiaries fail to maintain an exemption from registration under the Investment Company Act, we could, among other things, be required either to (a) change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company, any of which could negatively affect our financial results, the sustainability of our business model or the value of our securities.

Risks Related to Conflicts of Interest

Our officers and directors may be involved in other businesses related to the commercial real estate industry and potential conflicts of interests may arise if we invest in commercial real estate instruments or properties affiliated with such businesses.

Our officers or directors may be involved in other businesses related to the commercial real estate industry, and we may wish to invest in commercial real estate instruments or properties affiliated with such persons. Potential conflicts of interest may exist in such situations, and as a result, the benefits to our business of such investments may be limited. We do not have a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary interest in any transaction in which we have an interest or engaging for their own account in business activities of the types that we conduct.

We may compete with our investors and our affiliated entities for certain investment opportunities.

TowerBrook Capital Partners L.P. (“TowerBrook”) and GI International L.P. (“GI Partners”), or one or more of their affiliates, may compete against us for investment opportunities in the future. The investment in the Company by the funds managed by TowerBrook and GI Partners did not result in any limitations on the types of investments and activities that may be made or pursued by any of the funds managed by TowerBrook and GI Partners and our amended and restated articles of incorporation provide that we shall not have any right or expectation in any corporate opportunities known to Towerbrook or GI Partners. In the future, TowerBrook or GI Partners (or one of any of their affiliates) or one or more of the funds managed by TowerBrook or GI Partners may invest in and/or control one or more other entities or businesses with investment and operating focuses that overlap with our investment and operating focus. Certain potential conflicts of interest may also arise with respect to the allocation of prospective investments between us

60

and one or more of the funds managed by TowerBrook and GI partners or other investment entities controlled or managed by TowerBrook and GI Partners and their affiliates. Where such allocations are appropriate, TowerBrook and GI Partners generally will act or choose not to act in a fashion that they deem reasonable and fair to each investment entity that is a party to the transaction. As a result, we may decide not to invest in otherwise desirable and beneficial investment opportunities.

Meridian Capital Group, LLC (“Meridian”), a strategic investor in us, expects, in its capacity as a commercial real estate mortgage loan broker, to present us with a geographically diverse volume of loan opportunities for our review. Meridian, however, will also provide our competitors with many, if not all, of the same loan opportunities and there can be no assurance that we will accept any of these opportunities for origination. Additionally, representatives of Meridian who may be appointed to our Board of Directors and our subsidiaries may also serve as directors of one or more other entities that compete with us.

Certain of our entities have in the past and may in the future make loans to other of our entities. Such loans may be made on other-than-arms’-length terms, and as a result, we could be deemed to be subject to an inherent conflict of interest in the event that the interest rates and related fees of such loans differ from those rates and fees then available in the marketplace. We expect that such loans will not give rise to a conflict of interest because such loans generally will be made at rates, and subject to fees, lower than those available in the marketplace; however, we will attempt to resolve any conflicts of interest that arise in a fair and equitable manner.

We hold CMBS and the master servicer, special servicer or sub-servicer or their affiliates may have relationships with borrowers under related mortgage loans and such relationships may impact the value of such CMBS.

In instances where we hold CMBS, the master servicer, special servicer or sub-servicer or any of their respective affiliates may have interests in, or other financial relationships with, borrowers under related mortgage loans. Such relationships may create conflicts of interest that negatively impact the value of such CMBS.

Risks Related to Hedging

We may enter into hedging transactions that could expose us to contingent liabilities in the future and adversely impact our financial condition.

Part of our strategy will involve entering into hedging transactions that could require us to fund cash payments in certain circumstances (such as the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument). These potential payments will be contingent liabilities and therefore may not appear in our financial statements. The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges. These economic losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition.

Hedging against interest rate exposure may adversely affect our earnings.

We intend to pursue various hedging strategies to seek to reduce our exposure to adverse changes in interest rates. Our hedging activity will vary in scope based on the level and volatility

61

of interest rates, the type of assets held and other changing market conditions. Interest rate hedging may fail to protect or could adversely affect our business because, among other things:

• interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates;

• available interest rate hedges may not correspond directly with the interest rate risk for which protection is sought;

• due to a credit loss or other factors, the duration of the hedge may not match the duration of the related liability;

• in the case of a Ladder REIT, the amount of income that a REIT may earn from hedging transactions to offset interest rate losses may be limited by U.S. federal tax provisions governing REITs;

• the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign its side of the hedging transaction; and

• the hedging counterparty owing money in the hedging transaction may default on its obligation to pay.

In addition, we may fail to recalculate, readjust and execute hedges in an efficient manner.

Any hedging activity in which we engage may materially and adversely affect our results of operations and cash flows. Therefore, while we may enter into such transactions seeking to reduce interest rate risks, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio positions or liabilities being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.

Hedging instruments often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities and therefore may involve risks and costs that could result in material losses.

The enforceability of agreements underlying hedging transactions may depend on compliance with applicable statutory and commodity and other regulatory requirements and, depending on the identity of the counterparty, applicable international requirements. The business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in its default, resulting in the loss of unrealized profits and force us to cover our commitments, if any, at the then current market price. A liquid secondary market may not exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in significant losses.

The Dodd-Frank Act regulates derivative transactions, which include certain hedging instruments we may use in our risk management activities. Under the Dodd-Frank Act and related CFTC regulations, many classes of interest rate swaps that could be used as hedging transactions are subject to mandatory clearing through a registered clearing facility or will be subject to mandatory clearing after September 9, 2013. The Dodd-Frank Act further contemplates that most swaps will be required to be cleared through a registered clearing

62

facility and traded on a designated exchange or swap execution facility. Although the Dodd-Frank Act and related CFTC regulations that have been adopted to date include significant new provisions regarding the regulation of derivatives, the full impact of those requirements will not be known definitively until additional regulations have been adopted by the SEC and the CFTC. The legislation and new regulations could increase the operational and transactional cost of derivatives contracts and affect the number and/or creditworthiness of available hedge counterparties to us.

Risks related to margin calls for cleared swaps.

Part of our strategy will involve entering into hedging transactions that may be subject to mandatory clearing under the Dodd-Frank Act and therefore subject to mandatory margin requirements. The margin we may be required to post may be subject to clearinghouse rules which provide the relevant clearinghouse with the ability to increase margin requirements at its discretion. In addition, clearing intermediaries who clear our trades may have contractual rights to increase margin requirements. Our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition. In addition, the failure to satisfy a margin call may result in the liquidation of all or a portion of the relevant hedge transactions.

We may enter into derivative contracts that could expose us to contingent liabilities in the future.

We may enter into derivative contracts that could require us to fund cash payments in the future under certain circumstances (e.g., the early termination of the derivative agreement caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the derivative contract). The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges. These economic losses may materially and adversely affect our results of operations and cash flows.

Increased regulatory oversight of derivatives could adversely affect our hedging activities.

The Obama administration recently proposed a significant restructuring of the U.S. financial regulatory system. Among other things, the proposed reforms would increase regulatory oversight of financial derivatives. We expect to use derivative arrangements to hedge against changes in interest rates and to manage credit risk. Increased regulation of financial derivatives may make our hedging strategy more expensive to execute and reduce its effectiveness.

Risks Related To This Offering and Our Class A Common Stock

An active market for our Class A common stock may not develop or be sustained.

We intend to apply to list our Class A common stock on the New York Stock Exchange under the symbol “LADR.” However, we cannot assure you that a regular trading market of our Class A common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our Class A common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your Class A common stock when desired, or at all, or the prices that you may obtain for your Class A common stock.

63

The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our stockholders.

Even if an active trading market develops, the market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class A common stock may fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, you may be unable to sell your Class A common stock at or above your purchase price, if at all. We cannot assure you that the market price of our Class A common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: variations in our quarterly operating results; failure to meet our earnings estimates; publication of research reports about us or the investment management industry or the failure of securities analysts to cover our Class A common stock after this offering; additions or departures of our executive officers and other key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; changes in market valuations of similar companies; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; adverse publicity about the financial advisory industry generally or individual scandals, specifically; and general market and economic conditions.

Our Class A common stock price may decline due to the large number of shares eligible for future sale and for exchange into Class A common stock.

The market price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate.

Upon completion of this offering we will have a total of             shares of our Class A common stock outstanding (or             shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock). All of these shares of Class A common stock will have been sold in this offering and will be freely tradable without restriction or further registration under the Securities Act by persons other than our “affiliates.” Under the Securities Act, an “affiliate” of an issuer is a person that directly or indirectly controls, is controlled by or is under common control with that issuer.

In addition, subject to certain limitations and exceptions, pursuant to certain provisions of our LLLP Agreement, unitholders of LCFH may exchange an equal number of LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Upon consummation of this offering, the existing owners of LCFH will beneficially own             LP Units, all of which will be exchangeable for shares of our Class A common stock beginning 180 days after the date of this prospectus.

Our amended and restated certificate of incorporation authorizes us to issue additional shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion. In accordance with the Delaware General Corporation Law (“DGCL”) and the provisions of our certificate of incorporation, we may also issue preferred stock that has designations, preferences, rights, powers and duties that are different from, and

64

may be senior to, those applicable to shares of Class A common stock. Similarly, the LLLP Agreement permits LCFH to issue an unlimited number of additional limited liability limited partnership interests of LCFH with designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the LP Units, and which may be exchangeable for shares of our Class A common stock.

We and certain of the existing unitholders of LCFH have agreed with the underwriters not to sell, otherwise dispose of or hedge any of our Class A common stock, subject to specified exceptions, during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Deutsche Bank Securities Inc. and Citigroup Global Capital Markets Inc. We have also agreed, in respect of the existing owners who have not entered into such a lock-up agreement, not to permit such existing owners to exchange their LP Units or Class B common stock for shares of our Class A common stock during such 180-day period without the prior written consent of Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. The agreements provide exceptions for (1) sales to underwriters pursuant to the purchase agreement, (2) our sales in connection with existing stock incentive plans and (3) certain other exceptions. Subject to these agreements, we may issue and sell in the future additional Class A common stock. In addition, after the expiration of the 180-day lock-up period, the shares of Class A common stock issuable upon exchange of the LP Units and Class B common stock will be eligible for resale from time to time, subject to certain contractual and Securities Act restrictions.

You may be diluted by the future issuance of additional Class A common stock in connection with our incentive plans, acquisitions or otherwise.

After this offering, we will have an aggregate of             shares of Class A common stock authorized but unissued, including             shares of Class A common stock issuable upon exchange of LP Units and Class B common stock that will be held by our owners. Our amended and restated certificate of incorporation authorizes us to issue these shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. We have reserved             shares for issuance under our 2013 Omnibus Incentive Plan. Any Class A common stock that we issue, including under our 2013 Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase Class A common stock in this offering.

Investors in this offering will suffer immediate and substantial dilution.

The initial public offering price per share of Class A common stock will be substantially higher than our pro forma net tangible book value per share immediately after this offering. As a result, you will pay a price per Class A share that substantially exceeds the book value of our assets after subtracting our liabilities. At an offering price of $         per share, the midpoint of the estimated price range set forth on the cover of this prospectus, you will incur immediate and substantial dilution in an amount of $         per share of Class A common stock. See “Dilution.”

We do not intend to pay any cash dividends in the foreseeable future, which may depress the price of our Class A common stock.

We intend to reinvest any earnings in the growth of our business. Payments of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitations on our

65

ability to pay dividends. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur, including our Notes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” As a result, you may not receive any return on an investment in our Class A common stock unless you sell our Class A common stock for a price greater than that which you paid for it.

Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control.

Our amended and restated certificate of incorporation and amended and restated by-laws may delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting our board of directors to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations, and placing limitations on convening stockholder meetings. In addition, we are subject to provisions of the DGCL that restrict certain business combinations with interested stockholders. These provisions may also discourage acquisition proposals or delay or prevent a change in control, which could harm our stock price. See “Description of Capital Stock.”

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the New York Stock Exchange rules promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required, and management’s attention may be diverted from other business concerns. These rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our board of directors. Additionally, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Furthermore, because of our relative inexperience in operating as a public company, we might not be successful in implementing these requirements. The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on our financial condition.

Risks Related to Our Organization and Structure

Our only material asset after completion of this offering will be our interest in LCFH, and we are accordingly dependent upon distributions from LCFH to pay dividends, if any, taxes, payments under the TRA, and other expenses.

We will be a holding company and will have no material assets other than our ownership of LP Units. We have no independent means of generating revenue. We intend to cause LCFH to make distributions to its unitholders in an amount sufficient to cover all applicable taxes payable by them determined according to assumed rates, payments owing under the TRA, and dividends, if any, declared by us. To the extent that we need funds, and LCFH is restricted from

66

making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.

We are controlled by the existing unitholders of LCFH, whose interests may differ from those of our public stockholders.

Immediately following this offering and the application of net proceeds from this offering, the existing unitholders of LCFH will control approximately     % of the combined voting power of our Class A and Class B common stock. Accordingly, the existing unitholders of LCFH, if voting in the same manner, will have the ability to elect all of the members of our board of directors, and thereby to control our management and affairs. In addition, they will be able to determine the outcome of all matters requiring shareholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors, and could preclude any unsolicited acquisition of our company.

In addition, immediately following this offering and the application of net proceeds from this offering, the existing unitholders of LCFH will own     % of the LP Units. Because they hold their ownership interest in our business through LCFH, rather than through the public company, these existing unitholders may have conflicting interests with holders of our Class A common stock. For example, the existing unitholders of LCFH may have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, and whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the tax receivable agreement. In addition, the structuring of future transactions may take into consideration these existing unitholders’ tax considerations even where no similar benefit would accrue to us. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

We will be required to pay the existing unitholders of LCFH for certain tax benefits we may claim arising in connection with future exchanges of LP Units under the LLLP Agreement, which payments could be substantial.

Our existing owners may from time to time cause LCFH to exchange an equal number of LP Units and Class B common stock for Class A common stock of Ladder Capital Corp on a one-for-one basis (as described in more detail in “Certain Relationships and Related Party Transactions—Amended and Restated Limited Liability Limited Partnership Agreement”). As a result of these additional exchanges we will become entitled to certain tax basis adjustments reflecting the difference between the price we pay to acquire LP Units and the proportionate share of LCFH’s tax basis allocable to such units at the time of the exchange. As a result, the amount of tax that we would otherwise be required to pay in the future may be reduced by the increase (for tax purposes) in depreciation and amortization deductions attributable to our interests in LCFH, although the U.S. Internal Revenue Service (“IRS”) may challenge all or part of that tax basis adjustment, and a court could sustain such a challenge.

We will enter into a tax receivable agreement with certain existing unitholders of LCFH that will provide for the payment by us to them of 85% of the amount of cash savings, if any, in U.S. federal, state and local tax that we realize as a result of (i) the tax basis adjustments referred to above, (ii) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (iii) any deemed interest deductions arising from payments made by us pursuant to the tax receivable agreement. While the actual amount of the adjusted tax basis, as well as the amount and timing of any payments under this agreement will vary depending upon a number of factors, including the basis of our proportionate share of LCFH’s assets on the dates of exchanges, the timing of exchanges, the price of shares of our Class A common stock at the time of each exchange, the extent to which such exchanges are taxable,

67

the deductions and other adjustments to taxable income to which LCFH is entitled, and the amount and timing of our income, we expect that during the anticipated term of the tax receivable agreement, the payments that we may make to the existing unitholders of LCFH could be substantial. Payments under the tax receivable agreement will give rise to additional tax benefits and therefore to additional potential payments under the tax receivable agreement. In addition, the tax receivable agreement will provide for interest accrued from the due date (without extensions) of the corresponding tax return for the taxable year with respect to which the payment obligation arises to the date of payment under the agreement. Ladder Capital Corp will have the right to terminate the tax receivable agreement by making payments to the existing owners of LCFH calculated by reference to the present value of all future payments that the existing owners of LCFH would have been entitled to receive under the tax receivable agreement using certain valuation assumptions, including assumptions that any LP Units and Class B common stock that have not been exchanged are deemed exchanged for the market value of the Class A common stock at the time of termination and that LCFH will have sufficient taxable income in each future taxable year to fully realize all potential tax savings.

There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, (i) the payments under the tax receivable agreement exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement, and/or (ii) distributions to us by LCFH are not sufficient to permit us to make payments under the tax receivable agreement after it has paid its taxes and other obligations. For example, were the IRS to challenge a tax basis adjustment, or other deductions or adjustments to taxable income of LCFH, the existing unitholders of LCFH will not reimburse us for any payments that may previously have been made under the tax receivable agreement, except that excess payments made to an existing unitholder will be netted against payments otherwise to be made, if any, after our determination of such excess. As a result, in certain circumstances we could make payments to the existing unitholders of LCFH under the tax receivable agreement in excess of our ultimate cash tax savings. In addition, the payments under the tax receivable agreement are not conditioned upon any recipient’s continued ownership of us.

In certain cases, payments by us under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement.

The tax receivable agreement will provide that upon certain changes of control, or if, at any time, we elect an early termination of the tax receivable agreement, the amount of our (or our successor’s) payment obligations with respect to exchanged or acquired LP Units (whether exchanged or acquired before or after such transaction) will be determined based on certain assumptions. These assumptions include the assumption that we (or our successor) will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. Moreover, in the event we elect an early termination of the tax receivable agreement, we would be required to make an immediate payment equal to the present value (at a discount rate equal to LIBOR plus basis points) of the anticipated future tax benefits (based on the foregoing assumptions). Accordingly, if we so elect, payments under the tax receivable agreement may be made years in advance of the actual realization, if any, of the anticipated future tax benefits and may be significantly greater than the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity. We may not be able to finance our obligations under the tax receivable agreement and our existing indebtedness may limit our subsidiaries’ ability to make distributions to us to pay these obligations.

68

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” “likely,” “continue,” “design,” and other words and terms of similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors.” In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

• changes in economic conditions generally, changes in our industry and changes in the commercial finance and the real estate markets specifically;

• our business and investment strategy;

• our ability to obtain and maintain financing arrangements;

• the financing and advance rates for our assets;

• our expected leverage;

• the adequacy of collateral securing our loan portfolio and a decline in the fair value of our assets;

• interest rate mismatches between our assets and our borrowings used to fund such investments;

• changes in interest rates and the market value of our assets;

• changes in prepayment rates on our assets;

• the effects of hedging instruments and the degree to which our hedging strategies may or may not protect us from interest rate and credit risk volatility;

• the increased rate of default or decreased recovery rates on our assets;

• the adequacy of our policies, procedures and systems for managing risk effectively;

• a downgrade in the credit ratings assigned to our investments;

• the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters;

• the ability of the Ladder REIT to maintain qualification as a REIT for U.S. federal income tax purposes;

• our ability and the ability of our subsidiaries to maintain our and their exemptions from registration under the Investment Company Act;

• potential liability relating to environmental matters that impact the value of properties we may acquire or the properties underlying our investments;

69

• the inability of insurance covering real estate underlying our loans and investments to cover all losses;

• the availability of investment opportunities in mortgage-related and real estate-related instruments and other securities;

• fraud by potential borrowers;

• the availability of qualified personnel;

• the degree and nature of our competition;

• the market trends in our industry, interest rates, real estate values, the debt securities markets or the general economy; and

• the prepayment of the mortgage and other loans underlying our mortgage-backed and other asset backed securities.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We disclaim any duty to update any of these forward-looking statements after the date of this prospectus to confirm these statements in relationship to actual results or revised expectations.

See “Risk Factors” for a more complete discussion of the risks and uncertainties mentioned above and for discussion of other risks and uncertainties. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this prospectus and hereafter in our other SEC filings and public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

70

ORGANIZATIONAL STRUCTURE

Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. Following the reorganization and this offering, we will be a holding company and our sole material asset will be a controlling equity interest in LCFH. We have not engaged in any other business or other activities except in connection with the Reorganization Transactions and the Offering Transactions described below. We will be the sole general partner of LCFH. Accordingly, we will operate and control all of the business and affairs of LCFH and will consolidate the financial results of LCFH and its consolidated subsidiaries, and the ownership interest of the limited partners of LCFH (other than Ladder Capital Corp or any of its wholly owned subsidiaries), will be reflected as a non-controlling interest in our consolidated financial statements.

The diagram below depicts our organizational structure immediately following the reorganization and this offering. As discussed in greater detail below, prior to the completion of this offering, the limited liability limited partnership agreement of LCFH will be amended and restated to, among other things, modify its capital structure by replacing the different classes of interests currently held by the existing owners of LCFH with a single new class of units that we refer to as “LP Units.” In addition, we will issue to the existing owners of LCFH a number of shares of Ladder Capital Corp Class B common stock equal to the number of LP Units held by such owner. Our Class B common stock will entitle holders to one vote per share and will vote as a single class with our Class A common stock issued in this offering. However, the Class B common stock will not have any economic rights. The LLLP Agreement will also provide that each of the existing owners of LCFH (other than Ladder Capital Corp or any of its wholly owned subsidiaries) will have the right to exchange an equal number of their LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any Class B shares exchanged will be cancelled. Following this offering, Ladder Capital Corp will own a number of LP Units equal to the number of shares of our Class A common stock issued in the offering and the existing owners of LCFH will own the remaining outstanding LP Units.

71

In connection with this offering, we will acquire a number of LP Units of LCFH that is equal to the number of shares of Class A common stock issued to investors in this offering. We will benefit from the income of LCFH and its consolidated subsidiaries to the extent of any distributions made on our holdings of LP Units. Any such distributions will be distributed to all holders of LP Units, including the existing owners of LCFH, pro rata based on their holdings of LP Units.

Reorganization Transactions at LCFH

LCFH is a holding company for the companies that directly or indirectly own and operate our business. Immediately prior to this offering, LCFH will effect certain transactions, which we collectively refer to as the “Reorganization Transactions,” intended to simplify the capital structure of LCFH. Currently, LCFH’s capital structure consists of three different classes of membership interests (Series A and Series B Participating Preferred Units and Class A Common Units), each of which has different capital accounts and amounts of aggregate distributions above which its holders share in future distributions. The net effect of the Reorganization Transactions will be to convert the current multiple-class structure into a single new class of

72

units called “LP Units.” The conversion of all of the different classes of units of LCFH will be in accordance with conversion ratios for each class of outstanding units based upon the liquidation value of LCFH, as if it was liquidated upon this offering, with such value determined by the initial public offering price of the Class A common stock sold in this offering. The distribution of LP Units per class of outstanding units will be determined pursuant to the distribution provisions set forth in the LLLP Agreement.

Immediately prior to the offering, LCFH’s limited liability limited partnership agreement will be amended and restated to, among other things, designate Ladder Capital Corp as the General Partner of LCFH and establish the LP Units. The LP Units do not carry any voting rights and, following this offering, Ladder Capital Corp will have the right to determine the timing and amount of any distributions (other than tax distributions as described in “—Holding Company Structure”) to be made to holders of the LP Units from LCFH. Profits and losses of LCFH will be allocated, and all distributions generally will be made, pro rata to the holders of the LP Units.

Incorporation of Ladder Capital Corp

Ladder Capital Corp was incorporated as a Delaware corporation on May 21, 2013. Ladder Capital Corp has not engaged in any business or other activities except in connection with its formation. The amended and restated certificate of incorporation of Ladder Capital Corp at the time of the offering will authorize two classes of common stock, Class A common stock and Class B common stock and one or more series of preferred stock, each having the terms described in “Description of Capital Stock.”

Prior to completion of this offering, a number of shares of Class B common stock equal to the number of outstanding LP Units will be issued to the existing owners of LCFH in order to provide them with voting rights. Each existing unitholder of LCFH will receive a number of shares of Class B common stock equal to the number of LP Units held by such existing unitholder. See “Description of Capital Stock—Class B Common Stock.” Holders of our Class A and Class B common stock each have one vote per share of Class A and Class B common stock, respectively, and vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law.

Offering Transactions

At the time of this offering, we intend to use all of the net proceeds from this offering to purchase              newly issued LP Units from LCFH. See “Use of Proceeds.” Following this offering, each of the existing owners of LCFH may from time to time beginning 181 days after the date of this prospectus (subject to the terms of the LLLP Agreement) cause LCFH to exchange an equal number of their LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications. See “Certain Relationships and Related Transactions—Amended and Restated Limited Liability Limited Partnership Agreement of LCFH.” Any Class B shares exchanged will be cancelled. Any exchanges of LP Units for shares of Class A common stock are expected to result, with respect to Ladder Capital Corp, in increases in the tax basis of the assets of LCFH that otherwise would not have been available. These increases in tax basis may reduce the amount of tax that Ladder Capital Corp would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets.

We will enter into a tax receivable agreement with certain existing holders of the LP Units that will provide for the payment from time to time by Ladder Capital Corp to such persons of

73

85% of the amount of the benefits, if any, that Ladder Capital Corp realizes or under certain circumstances (such as following a change of control) is deemed to realize as a result of (i) the increases in tax basis referred to above (ii) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (iii) any deemed interest deductions arising from payments made by us pursuant to the tax receivable agreement.

We refer to the foregoing transactions as the “Offering Transactions.”

As a result of the transactions described above:

• the investors in this offering will collectively own             shares of our Class A common stock (or shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and Ladder Capital Corp will hold              LP Units (or             LP Units if the underwriters exercise in full their over—allotment option to purchase additional shares of Class A common stock), representing     % of the total economic interest of LCFH (or     % of the total economic interest of LCFH if the underwriters exercise in full their over—allotment option);

• the existing owners of LCFH (other than Ladder Capital Corp or any of its wholly owned subsidiaries) will collectively hold             LP Units, representing     % of the total economic interest of LCFH (or             LP Units, representing     % if the underwriters exercise in full their option to purchase additional shares of Class A common stock), which can be exchanged together with an equal number of Class B common stock for newly-issued Class A common stock pursuant to the LLLP Agreement;

• the investors in this offering will collectively have     % of the voting power in Ladder Capital Corp (or     % if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

• the existing owners of LCFH, through their holdings of our Class B common stock and any Class A common stock subsequently issued in an exchange of LP Units and Class B common stock for newly-issued Class A common stock pursuant to the LLLP Agreement, will collectively have     % of the voting power in Ladder Capital Corp (or     % if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

Our post—offering organizational structure will allow the existing owners of LCFH to retain their equity ownership in LCFH, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of LP Units. Investors in this offering will, by contrast, hold their equity ownership in Ladder Capital Corp, a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes, in the form of shares of Class A common stock.

The existing owners of LCFH will also hold shares of Class B common stock of Ladder Capital Corp. The shares of Class B common stock have only voting and no economic rights. A share of Class B common stock cannot be transferred except in connection with a transfer of an LP Unit. Further, an LP Unit cannot be exchanged with LCFH for a share of our Class A common stock without the corresponding share of our Class B common stock being delivered together at the time of exchange for cancellation by us. Accordingly, as the existing owners of LCFH sell LP Units to us as part of the Offering Transactions or subsequently cause LCFH to exchange LP Units for shares of Class A common stock of Ladder Capital Corp pursuant to the LLLP Agreement, the voting power afforded to the existing owners of LCFH by their shares of Class B common stock is automatically and correspondingly reduced.

74

Holding Company Structure

Ladder Capital Corp will be a holding company, and its sole material asset will be a controlling equity interest in LCFH. As the General Partner of LCFH, Ladder Capital Corp will indirectly control all of the business and affairs of LCFH and its subsidiaries through its ability to appoint the LCFH board.

Ladder Capital Corp will consolidate the financial results of LCFH and its subsidiaries, and the ownership interest of the existing owners of LCFH (other than Ladder Capital Corp or any of its wholly owned subsidiaries) will be reflected as a non-controlling interest in Ladder Capital Corp’s consolidated financial statements.

Pursuant to the LLLP Agreement of LCFH, the board of LCFH has the right to determine when distributions (other than tax distributions) will be made to the limited partners of LCFH and the amount of any such distributions. If Ladder Capital Corp authorizes a distribution, such distribution will be made to the limited partnership of LCFH pro rata in accordance with their respective percentage interests.

The holders of LP Units of LCFH, including Ladder Capital Corp, will generally have to include for purposes of calculating their U.S. federal, state and local income taxes their share of any taxable income of LCFH. Taxable income of LCFH generally will be allocated to the holders of LP Units of LCFH (including Ladder Capital Corp) pro rata in accordance with their respective share of the net profits and net losses of LCFH. LCFH is obligated, subject to available cash and applicable law and contractual restrictions (including pursuant to our debt instruments), to make cash distributions, which we refer to as “tax distributions,” based on certain assumptions, to its limited partners (including Ladder Capital Corp) pro rata in accordance with their respective percentage interests. Generally, these tax distributions will be an amount equal to our estimate of the taxable income of LCFH multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual resident in New York, New York (taking into account the non-deductibility of certain expenses). See “Certain Relationships and Related Transactions—Amended and Restated Limited Liability Limited Partnership Agreement of LCFH.”

75

USE OF PROCEEDS

We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and commissions, will be approximately $         million (or $         million if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

We intend to use the net proceeds from this offering to purchase newly-issued LP Units from LCFH, as described under “Organizational Structure—Offering Transactions” and to pay the expenses of this offering. The proceeds received by LCFH in connection with the sale of newly issued LP Units will be used to grow our loan origination and related commercial real estate business lines and for general corporate purposes.

76

DIVIDEND POLICY

We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Future cash dividends, if any, will be at the discretion of our board of directors and will depend upon, among other things, our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors the board of directors may deem relevant.

77

CAPITALIZATION

The following table sets forth our cash and capitalization as of March 31, 2013:

• on a historical basis for LCFH; and

• on a pro forma basis for Ladder Capital Corp giving effect to the transactions described under “Unaudited Pro Forma Consolidated Financial Information,” including the application of the proceeds from this offering as described in “Use of Proceeds” as if such transactions occurred on March 31, 2013.

You should read this table together with the information contained in this prospectus, including “Organizational Structure,” “Use of Proceeds,” “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this prospectus.

	As of March 31, 2013
	Actual			Pro Forma
	(Unaudited)
	($ in thousands)
Cash and cash equivalents	$	33,688		$
Debt:
Repurchase agreements	$	382,161		$
Borrowings under credit agreement		30,000
Long term financing		153,989
Borrowings from the FHLB		423,000
Senior unsecured notes		325,000
Total debt	$	1,314,150
Capital (equity):
Class A common stock, par value $0.001 per share,             shares authorized on a pro forma basis;             shares issued and outstanding on a pro forma basis		—
Class B common stock, par value $0.001 per share,             shares authorized on a pro forma basis;             shares issued and outstanding on a pro forma basis		—
Series A Preferred Units		816,742
Series B Preferred Units		284,636
Common Units		56,388
Additional paid in capital		—
Total partners’ capital / Ladder Capital Corp stockholders’ equity		1,157,766
Noncontrolling interest		1,266
Total capital (equity)		1,159,032	(1)
Total capitalization	$	2,473,182		$

(1) Represents the investment of existing unitholders in LCFH as of March 31, 2013, including Series A and Series B Participating Preferred Units and Class A Common Units and contributed capital. See the unaudited consolidated balance sheet of LCFH as of March 31, 2013 included elsewhere in this prospectus.

78

DILUTION

If you invest in the initial public offering of our Class A common stock, your interest will be diluted to the extent of the excess of the initial public offering price per share of our Class A common stock over the pro forma net tangible book value per share of our Class A common stock after this offering. Dilution results from the fact that the per share offering price of the Class A common stock is substantially in excess of the net tangible book value per share attributable to the existing equity holders.

Our pro forma net tangible book value at March 31, 2013 was approximately $         million, or $         per share of our Class A common stock. Pro forma net tangible book value represents the amount of total tangible assets less total liabilities of LCFH, after giving effect to the Reorganization Transactions, and pro forma net tangible book value per share represents pro forma net tangible book value divided by the number of shares of Class A common stock outstanding, after giving effect to the Reorganization Transactions and assuming that all of the limited partners of LCFH (other than Ladder Capital Corp) exchanged their vested LP Units and Class B common stock for newly-issued shares of our Class A common stock on a one-for-one-basis.

After giving effect to the sale by us of              shares of our Class A common stock at an assumed initial public offering price of $         per share, the mid-point of the price range set forth on the cover page of this prospectus in this offering, after deducting the underwriting discounts, estimated offering expenses and other related transaction costs payable by us, and the use of the estimated net proceeds as described under “Use of Proceeds”, our pro forma net tangible book value at March 31, 2013 was $         million or $         per share of Class A common stock, assuming that all of the existing unitholders of LCFH (other than Ladder Capital Corp) exchanged their vested LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis.

The following table illustrates the pro forma immediate increase in book value of $         per share for existing equity holders and the immediate dilution of $         per share to new stockholders purchasing Class A common stock in this offering, assuming the underwriters do not exercise their option to purchase additional shares to cover any over-allotment.

Assumed initial public offering price per share	$
Pro forma net tangible book value per share prior to this offering at March 31, 2013	$
Increase in net tangible book value per share attributable to Class A stockholders purchasing shares in this offering	$
Pro forma net tangible book value per share after this offering	$
Dilution to new Class A stockholders per share	$

The following table summarizes, on the same pro forma basis at March 31, 2013, the total number of shares of Class A common stock purchased from us, the total cash consideration paid to us and the average price per share paid by the existing equityholders and by new investors purchasing shares in this offering, assuming that all of the existing unitholders of LCFH (other than Ladder Capital Corp) exchanged their vested LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis.

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percentage			Amount	Percentage
Existing unitholders									$
Public investors									$
Total			100.0	%			100.0	%	$

79

Of the             vested and unvested LP Units to be held by the existing unitholders of LCFH following this offering, will be fully vested and             will be unvested. If we had assumed that all of the existing unitholders exchanged their unvested membership interests in addition to their vested membership interests for shares of our Class A common stock, the dilution in pro forma net tangible book value per share to new investors would have been greater and the average value per share exchanged by the existing equityholders would have been lower.

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share of Class A common stock, the mid-point of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors in this offering and by all investors by $         million, and would increase (decrease) the average price per share paid by new investors (excluding existing unitholders) by $        , assuming the number of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and without deducting the estimated underwriting discounts and offering expenses payable by us in connection with this offering.

If the underwriters’ option to purchase additional shares to cover any over-allotment is exercised in full, the pro forma net tangible book value per share at March 31, 2013 would be approximately $         per share and the dilution in pro forma net tangible book value per share to new investors would be $         per share, in each case assuming that all of the existing unitholders of LCFH (other than Ladder Capital Corp) exchanged their LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis. Furthermore, the percentage of our shares held by existing equity owners would decrease to approximately     % and the percentage of our shares held by new investors would increase to approximately     %, in each case assuming that all of the existing unitholders of LCFH (other than Ladder Capital Corp) exchanged their LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis.

80

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following tables summarize our consolidated financial data for the periods indicated. The historical financial information and other data is that of LCFH. LCFH will be considered our predecessor for accounting purposes, and its consolidated financial statements will be our historical consolidated financial statements following this offering. You should read the following financial information together with the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes to those consolidated financial statements appearing elsewhere in this prospectus. The selected consolidated balance sheet data for years ended December 31, 2012 and 2011 and the selected consolidated statement of operating and cash flows data for years ended December 31, 2012, 2011 and 2010 are derived from the audited consolidated financial statements of LCFH included elsewhere in this prospectus. The balance sheet data as of December 31, 2010, 2009 and 2008 and the operating and cash flows data for the year ended 2009 and for the period from inception through December 31, 2008 are derived from LCFH’s audited consolidated financial statements and related notes that are not included in this prospectus:

	For the year ended December 31,												For the period from inception through December 31, 2008
	2012			2011			2010			2009
							($ in thousands)
Operating Data:
Interest income	$	136,198		$	133,297		$	129,301		$	54,894		$	923
Interest expense		(36,472	)		(35,836	)		(48,874	)		(16,727	)		(1,040	)
Net interest income (expense)		99,726			97,461			80,427			38,167			(117	)
Total other income		192,021			91,786			57,452			22,499			—
Total net interest income and other income (expense)		291,747			189,247			137,879			60,666			(117	)
Total costs and expenses		(112,364	)		(117,944	)		(48,781	)		(19,447	)		(6,322	)
Income before earnings from investment in equity method investee		179,383			71,303			89,098			41,219			(6,439	)
Earnings from investment in equity method investee		1,256			347			—			(18	)		—
Income before taxes		180,639			71,650			89,098			41,201			(6,439	)
Tax expense		(2,584	)		(1,510	)		(600	)		—			—
Net income (loss)		178,055			70,140			88,498			41,201			(6,439	)
Net (income) loss attributable to noncontrolling interest		49			(15	)		—			—			—
Net income (loss) attributable to preferred and common unit holders	$	178,104		$	70,125		$	88,498		$	41,201		$	(6,439	)
Net Cash Provided By (Used in):
Operating activities	$	(108,415	)	$	340,302		$	(231,274	)	$	(45,524	)	$	(3,063	)
Investing activities		283,310			(320,699	)		(434,396	)		(1,481,283	)		(104,809	)
Financing activities		(214,450	)		(12,564	)		568,717			1,578,807			229,137

81

	As of December 31,
	2012		2011		2010		2009		2008
					($ in thousands)
Balance Sheet Data:
Securities	$	1,125,562	$	1,945,070	$	1,925,510	$	1,550,901	$	106,370
Loans		949,651		514,038		509,804		123,136		—
Real estate, net		380,022		28,835		25,669		—		—
Other		64,626		27,815		21,667		16,420		4,691
Total assets		2,629,030		2,654,389		2,587,788		1,879,776		232,461
Total financing arrangements		1,484,672		1,615,641		1,839,720		1,219,425		—
Total liabilities		1,527,840		1,665,326		1,869,282		1,231,286		(3,679	)
Total noncontrolling interest		582		125		—		—		—
Total partners’/members’ capital		1,101,190		989,062		718,506		648,490		228,782

82

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The unaudited pro forma consolidated statements of income for the year ended December 31, 2012 and for the three months ended March 31, 2013 present our consolidated results of operations giving pro forma effect to the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds,” as if such transactions occurred on January 1, 2012. The unaudited pro forma consolidated balance sheet as of March 31, 2013 presents our consolidated financial position giving pro forma effect to the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds,” as if such transactions occurred on March 31, 2013.

The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions on the historical financial information of LCFH. The unaudited pro forma consolidated financial information should be read together with “Organizational Structure,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this prospectus.

The unaudited pro forma consolidated financial information is included for informational purposes only and does not purport to reflect the results of operations or financial position of Ladder Capital Corp that would have occurred had we been in existence or operated as a public company or otherwise during the periods presented. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial position had the Reorganization Transactions and Offering Transactions described under “Organizational Structure” and the use of the estimated net proceeds from this offering as described under “Use of Proceeds” occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date.

The pro forma adjustments principally give effect to:

• the purchase by Ladder Capital Corp of             LP Units of LCFH with the proceeds of this offering; and

• in the case of the unaudited pro forma consolidated statements of income, a provision for corporate income taxes on the income attributable to Ladder Capital Corp at an effective rate of             %, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction.

The unaudited pro forma consolidated financial information presented assumes no exercise by the underwriters of the option to purchase up to an additional              shares of Class A common stock from us and that the shares of Class A common stock to be sold in this offering are sold at $             per share of Class A common stock, which is the midpoint of the price range indicated on the front cover of this prospectus.

83

Ladder Capital Corp

Unaudited Pro Forma Consolidated Balance Sheets

As of March 31, 2013

	Ladder Capital Finance Holdings LLLP Actual		Pro Forma Adjustments(1)	Ladder Capital Corp Pro Forma
Assets
Cash and cash equivalents(2)	$	33,688,215
Cash collateral held by broker		89,915,552
Mortgage loan receivables held for investment, at amortized cost		293,207,458
Mortgage loan receivables held for sale		610,898,322
Real estate securities, available-for-sale:
Investment grade commercial mortgage backed securities		711,753,246
GN construction securities		69,384,014
GN permanent securities		88,841,599
Interest only securities		187,364,592
Real estate, net		395,677,886
Investment in equity method investee		13,389,557
FHLB stock		21,150,000
Derivative instruments		1,268,572
Due from brokers		45,855
Accrued interest receivable		11,013,257
Other assets		13,896,114
Total assets	$	2,541,494,239
Liabilities and Capital
Liabilities
Repurchase agreements		382,160,915
Borrowings under credit agreement		30,000,000
Long term financing		153,989,013
Borrowings from the FHLB		423,000,000
Senior unsecured notes		325,000,000
Derivative instruments		18,321,747
Accrued expenses		36,372,275
Other liabilities		13,618,267
Total liabilities		1,382,462,217
Commitments and contingencies
Capital
Partners’ capital(3)
Series A Preferred Units		816,742,101
Series B Preferred Units		284,636,341
Common Units		56,387,908
Class A common stock, authorized to issue             shares, par value share;             shares issued on a pro forma basis(3)
Class B common stock, authorized to issue             shares, par value share;             shares issued on a pro forma basis
Retained earnings
Additional Paid-In Capital
Total Partners’ Capital / Stockholders’ Equity		1,157,766,350
Noncontrolling interest(4)		1,265,672
Total capital		1,159,032,022
Total liabilities and capital		2,541,494,239

(1) As described in “Organizational Structure,” Ladder Capital Corp will become the General Partner of LCFH. Ladder Capital Corp will initially have     % economic interest in LCFH, but will have 100% of the voting power and control the management of LCFH. As a result, Ladder Capital Corp will consolidate the financial results of LCFH and will record non-controlling interest on the Ladder Capital Corp consolidated balance sheet. Immediately following the

84

Restructuring Transactions and Offering Transactions, the non-controlling interest, based on the assumptions to the pro forma financial information, will be $         million. Pro forma non-controlling interest represents     % of the pro forma equity of LCFH of $         million.

(2) Reflects the net effect on cash and cash equivalents of the receipt of offering proceeds of $         million described in “Use of Proceeds” net of estimated expenses.

(3) Represents an adjustment to stockholders’ equity reflecting the following:

(a) par value for Class A common stock and Class B common stock to be outstanding following this offering;

(b) an increase of $         million of additional paid-in capital as a result of estimated net proceeds from this offering;

(c) a decrease of $         million of additional paid-in capital to allocate a portion of Ladder Capital Corp’s equity to the non-controlling interest; and

(d) the elimination of LCFH partners’ equity of $         million upon consolidation.

(4) The increase in non-controlling interest reflects the following:

(a) an increase from the reclassification of partners’ equity of $         million to non-controlling interest upon consolidation; and

(b) an increase of $         million from the proportional allocation of additional paid-in capital of Ladder Capital Corp’s equity to the non-controlling interest.

85

Ladder Capital Corp

Unaudited Pro Forma Consolidated Statements of Income

For the Three Months Ended March 31, 2013

	Ladder Capital Finance Holdings LLLP Actual			Pro Forma Adjustments(1)	Ladder Capital Corp Pro Forma
Net interest income
Interest income	$	31,261,332
Interest expense		11,322,239
Net interest income		19,939,093
Other income
Operating lease income		6,484,040
Sale of loans, net		85,157,414
Sale of securities, net		2,564,893
Sale of real estate, net		3,697,548
Fee income		1,438,501
Total other income		99,342,396
Total net interest income and other income		119,281,489
Costs and expenses
Net result from derivative transactions		(2,269,709	)
Operating expenses		13,564,847
Fee expense		12,704,204
Depreciation		3,123,583
Provision for loan losses		150,000
Total costs and expenses		27,272,925
Income before earnings from investment in equity method investee		92,008,564
Earnings from investment in equity method investee		393,980
Income before taxes		92,402,544
Tax expense		2,067,763
Net income		90,334,781
Net (income) loss attributable to noncontrolling interest		(27,244	)
Net income attributable to preferred and common unit holders	$	90,307,537
Pro forma information (unaudited):
Historical income before taxes		92,402,544
Pro forma adjustment for taxes(2)
Pro forma net income attributable to the controlling and non-controlling interest(3)
Less: Net income attributable to non-controlling interest(1)
Net income attributable to Ladder Capital Corp stockholders
Earnings per common units
Basic(3)	$	0.83
Diluted(4)	$	0.80
Weighted average common units outstanding
Basic(3)		21,712,382
Diluted(4)		22,550,855

86

Ladder Capital Corp

Unaudited Pro Forma Consolidated Statements of Income

For the Fiscal Year Ended December 31, 2012

	Ladder Capital Finance Holdings LLLP Actual		Pro Forma Adjustments(1)	Ladder Capital Corp Pro Forma
Net interest income
Interest income	$	136,198,204
Interest expense		36,472,578
Net interest income		99,725,626
Other income
Operating lease income		8,331,338
Sale of securities, net		19,013,960
Sale of loans, net		154,613,009
Sale of real estate, net		1,275,235
Fee income		8,787,695
Total other income		192,021,237
Total net interest income and other income		291,746,863
Costs and expenses
Net result from derivative transactions		35,650,989
Operating expenses		72,623,705
Depreciation		3,640,619
Provision for loan losses		448,833
Total costs and expenses		112,364,146
Income before earnings from investment in equity method investee		179,382,717
Earnings from investment in equity method investee		1,256,109
Income before taxes		180,638,826
Tax expense		2,583,999
Net income		178,054,827
Net (income) loss attributable to noncontrolling interest		49,084
Net income attributable to preferred and common unit holders	$	178,103,911
Net income attributable to Ladder Capital Corp
Pro forma information (unaudited):
Historical income before taxes		180,638,826
Pro forma adjustment for taxes(2)
Pro forma net income attributable to the controlling and non-controlling interest(3)
Less: Net income attributable to non-controlling interest(1)
Net income attributable to Ladder Capital Corp stockholders
Earnings per common units
Basic(3)	$	1.70
Diluted(4)	$	1.61
Weighted average common units outstanding
Basic(3)		20,995,657
Diluted(4)		22,081,046

(1) As described in “Organizational Structure,” Ladder Capital Corp will become the General Partner of LCFH. Ladder Capital Corp will initially own     % of the economic interest in LCFH, but will have 100% of the voting power and

87

control the management of LCFH. Certain of the existing owners of LCFH (other than Ladder Capital Corp or any of its subsidiaries) will own the remaining     % of the economic interest in LCFH, which will be accounted for as a non-controlling interest in the future consolidated financial results of Ladder Capital Corp. Immediately following this offering, the non-controlling interest will be     %. Net income attributable to the non-controlling interest will represent     % of income before income taxes. These amounts have been determined based on the assumption that the underwriters’ option to purchase additional shares is not exercised. If the underwriters’ option to purchase additional shares is exercised the ownership percentage held by the non-controlling interest would decrease to     %.

(2) Following the Reorganization Transactions and the Offering Transactions, Ladder Capital Corp will be subject to U.S. federal income taxes, in addition to state, local and international taxes, with respect to its allocable share of any net taxable income of LCFH, which will result in higher income taxes than during our history as a partnership. As a result, the pro forma statements of income reflect an adjustment to our provision for corporate income taxes to reflect an effective rate of     %, which includes provision for U.S. federal income taxes and uses our estimate of the weighted average statutory rates apportioned to each state, local and/or foreign jurisdiction.

(3) The shares of Class B common stock of Ladder Capital Corp do not share in Ladder Capital Corp earnings and are therefore not allocated any net income attributable to the controlling and non-controlling interests. As a result, the shares of Class B common stock are not considered participating securities and are therefore not included in the weighted average shares outstanding for purposes of computing net income available per share.

(4) For purposes of applying the as-if converted method for calculating diluted earnings per share, we assumed that all LP Units and Class B common stock are exchanged for Class A common stock. Such exchange is affected by the allocation of income or loss associated with the exchange of LP Units and Class B common stock for Class A common stock and accordingly the effect of such exchange has been included for calculating diluted pro forma net income (loss) available to Class A common stock per share. Giving effect to (i) the exchange of all LP Units and Class B common stock for shares of Class A common stock and (ii) the vesting of all unvested New Class A Unit stock based compensation awards, diluted pro forma net income (loss) per share available to Class A common stock would be computed as follows:

	Three months ended March 31, 2013	Year ended December 31, 2012
Pro forma income before income taxes	$	$
Adjusted pro forma income taxes(a)
Adjusted pro forma net income(b)
Weighted average shares of Class A common stock outstanding (assuming the exchange of all LP Units for shares of Class A common stock)(c)
Pro forma diluted net income available to Class A common stock per share	$	$

(a) Represents the implied provision for income taxes assuming the exchange of all LP Units of LCFH for shares of Class A common stock of Ladder Capital Corp using the same method applied in calculating pro forma tax provision.

(b) Assumes elimination of all non-controlling interest due to the assumed exchange of all LP Units and Class B common stock for shares of Class A common stock of Ladder Capital Corp as of the beginning of the period.

(c) The unvested units are converted to LP Units based on the treasury stock method and an as-if converted method is used to give effect to the exchange provisions of the LLLP Agreement for the diluted weighted average share calculation.

88

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in this prospectus. In addition to historical information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in our “Risk Factors.”

Overview

We are a leading commercial real estate finance company with a proprietary loan origination platform and an established national footprint. As a non-bank operating company, we believe that we are well-positioned to benefit from the opportunities arising from the diminished supply of commercial real estate debt capital and the substantial demand for new financings in the sector. We believe our comprehensive, fully-integrated in-house infrastructure, access to a diverse array of committed financing sources and highly experienced management team of industry veterans will allow us to continue to prudently grow our business as we endeavor to capitalize on profitable opportunities in various market conditions.

We conduct our business through three major business lines: commercial mortgage lending, investments in securities secured by first mortgage loans, and investments in selected net leased and other commercial real estate assets. We apply a comprehensive best practices underwriting approach to every loan and investment that we make, rooted in management’s deep understanding of fundamental real estate values and proven expertise in these complementary business lines through multiple economic and credit cycles.

Our primary business strategy is originating conduit first mortgage loans on stabilized, income producing commercial real estate properties that can be securitized. From our inception in October 2008 through March 31, 2013, we originated $5.8 billion of commercial real estate loans, $3.7 billion of which were sold into 13 securitizations, making us, by volume, the second largest non-bank contributor of loans to CMBS securitizations in the United States for that period, according to Commercial Mortgage Alert. The securitization of conduit loans has been a consistently profitable business for us and enables us to reinvest our equity capital into new loan originations or allocate it to other investments. In addition to conduit loans, we originated $1.0 billion of balance sheet loans held for investment from inception through March 31, 2013. During that timeframe, we also acquired $4.6 billion of investment grade-rated securities secured by first mortgage loans on commercial real estate and $519.1 million of selected net leased and other commercial real estate assets.

As of March 31, 2013, we had $2.5 billion in total assets and $1.2 billion in book equity capital. As of that date, our assets included $1.9 billion of senior secured assets, including $811.4 million of first mortgage loans secured by commercial real estate, $764.7 million of investment grade-rated CMBS, and $292.6 million of U.S. Agency Securities. We also owned $395.7 million of real estate at March 31, 2013.

Our primary sources of revenue include net interest income on our investments, which comprised 27.5% of our total net interest income and other income for the twelve months ended March 31, 2013, and income from sales of loans, net, which represents the income we earn from

89

regular sales and securitizations of certain commercial mortgage loans, and which comprised 58.5% of our total net interest income and other income for the twelve months ended March 31, 2013. We also generate net rental revenues from certain of our real estate and fee income from our loan originations and the management of our institutional bridge loan partnership.

Ladder was founded in October 2008 and we are currently capitalized by our management team and a group of leading global institutional investors, including affiliates of Alberta Investment Management Corp., GI Partners, Ontario Municipal Employees Retirement System and TowerBrook Capital Partners. We have built our operating business to include 58 full-time industry professionals by hiring experienced personnel known to us in the commercial mortgage industry. Doing so has allowed us to maintain consistency in our culture and operations and to focus on strong credit practices and disciplined growth.

We have a diversified and flexible financing strategy supporting our business operations, including significant committed term financing from leading financial institutions. As of March 31, 2013, we had $1.3 billion of debt financing outstanding, including $209.2 million of committed secured term financing (with an additional $1.5 billion of committed secured term financing available to us from the FHLB), $423.0 million of financing from the Federal Home Loan Bank (FHLB) (with an additional $577.0 million of committed term financing available to us), $154.0 million of third party, non-recourse mortgage debt, $203.0 million of other securities financing and $325.0 million of Notes. As of March 31, 2013 our debt-to-equity ratio was 1.1:1.0, as we employ leverage prudently to maximize financial flexibility.

We conduct operations through our subsidiaries. One of our subsidiaries is Ladder Capital Realty Finance Trust (the “Ladder REIT”), which has elected to be taxed as a REIT for federal income tax purposes. We operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act.

Refer to Note 16 to the unaudited consolidated financial statements for disclosure regarding events subsequent to March 31, 2013.

90

Our Businesses

We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets. Our mix of business segments is designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following table summarizes the value of our investment portfolio as reported in our consolidated financial statements as of the dates indicated below:

	As of March 31, 2013		As of December 31,
			2012		2011		2010
	(unaudited)		($ in thousands)
Loans
Conduit first mortgage loans	$	610,898	$	623,333	$	258,842	$	353,946
Balance sheet first mortgage loans		196,801		229,926		229,378		149,104
Other commercial real estate-related loans		96,407		96,392		25,819		6,754
Total loans	$	904,106	$	949,651	$	514,039	$	509,804
Securities
CMBS investments		764,748		833,916		1,664,001		1,736,043
U.S. Agency Securities investments		292,595		291,646		281,069		189,467
Total securities	$	1,057,343	$	1,125,562	$	1,945,070	$	1,925,510
Real Estate
Total real estate, net		395,678		380,022		28,835		25,669
Total investments	$	2,357,127	$	2,455,235	$	2,487,944	$	2,460,983
Cash, cash equivalents and cash collateral held by broker		123,604		109,169		138,630		105,138
Other assets		60,763		64,626		27,815		21,667
Total assets	$	2,541,494	$	2,629,030	$	2,654,389	$	2,587,788

Loans

Conduit First Mortgage Loans.    We originate conduit first mortgage loans that are secured by income-producing commercial real estate. These first mortgage loans are typically structured with fixed interest rates and five- to ten-year terms. Our loans are directly originated by an internal team that has longstanding and strong relationships with borrowers and mortgage brokers throughout the United States. We follow a rigorous investment process, which begins with an initial due diligence review; continues through a comprehensive legal and underwriting process incorporating multiple internal and external checks and balances; and culminates in approval or disapproval of each prospective investment by our Investment Committee. Conduit first mortgage loans in excess of $50.0 million also require the approval of our Board of Directors’ Risk and Underwriting Committee.

Although our primary intent is to sell our conduit first mortgage loans into CMBS securitization trusts, we generally seek to maintain the flexibility to keep them on our balance sheet, offer them for sale to CMBS trusts as part of a securitization process or otherwise sell them as whole loans to third-party institutional investors. From inception through March 31, 2013, we originated and funded $4.8 billion of conduit first mortgage loans, and securitized $3.7 billion of such mortgage loans in 13 separate transactions, including two securitizations in 2010, three securitizations in 2011, six securitizations in 2012 and two securitizations in the three months ended March 31, 2013. We generally securitize our loans together with certain financial

91

institutions, which to date have included affiliates of Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC, and we have also completed a single-asset securitization. During 2012 and the first quarter of 2013, conduit first mortgage loans have remained on our balance sheet for a weighted average of 78 and 51 days prior to securitization, respectively. As of March 31, 2013, we held 38 first mortgage loans that were substantially available to be offered for sale into a securitization with an aggregate book value of $610.9 million. Based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 63.7% at March 31, 2013.

Balance Sheet First Mortgage Loans.    We also originate and invest in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, renovation or repositioning. These mortgage loans are structured to fit the needs and business plans of the borrowers, and generally have floating rates and terms (including extension options) ranging from one to three years. Balance sheet first mortgage loans are originated, underwritten, approved and funded using the same comprehensive legal and underwriting approach, process and personnel used to originate our conduit first mortgage loans. Balance sheet first mortgage loans in excess of $20.0 million also require the approval of our Board of Directors’ Risk and Underwriting Committee.

We generally seek to hold our balance sheet first mortgage loans for investment, or offer them for sale to our institutional bridge loan partnership. From inception through March 31, 2013, we originated and funded $966.5 million of balance sheet first mortgage loans. These investments have been typically repaid at or prior to maturity (including by being refinanced by us into a new conduit first mortgage loan upon property stabilization) or sold to our institutional bridge loan partnership. As of March 31, 2013, we held a portfolio of eight balance sheet first mortgage loans with an aggregate book value of $196.8 million. Based on the loan balances and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 58.9% at March 31, 2013.

Other commercial real estate-related loans.    We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate. As of March 31, 2013, we held $96.4 million of other commercial real estate-related loans. Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 78.2%.

92

The following charts set forth our total outstanding conduit loans and balance sheet loans as of March 31, 2013 and a breakdown of our loan portfolio by loan size and geographic location and asset type of the underlying asset.

Securities

CMBS Investments.    We invest in CMBS secured by first mortgage loans on commercial real estate, and own predominantly short-duration, AAA-rated securities. These investments provide a stable and attractive base of net interest income and help us manage our liquidity. We have significant in-house expertise in the evaluation and trading of CMBS, due in part to our experience in originating and underwriting mortgage loans that comprise the assets within CMBS trusts, as well as our experience in structuring CMBS transactions, AAA-rated securities positions greater than $50 million and all other securities positions greater than $26 million require the approval of our Board of Directors’ Risk and Underwriting Committee. As of March 31, 2013, the estimated fair value of our portfolio of CMBS investments totaled $764.7 million in 85 CUSIPs ($9.0 million average investment per CUSIP). As of that date, the portfolio was comprised of 62.2% AAA-rated securities, and 37.8% other investment grade-rated securities, and had a weighted average duration of 2.0 years.

U.S. Agency Securities Investments.    Our U.S. Agency Securities portfolio consists of securities for which the principal and interest payments are guaranteed by a U.S. government agency, such as the Government National Mortgage Association (“Ginnie Mae”), or by a GSE, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). In addition, these securities are secured by first mortgage loans on commercial real estate. As of March 31, 2013, the estimated fair value of our portfolio of U.S. Agency Securities was $292.6 million in 61 CUSIPs ($4.8 million average investment per CUSIP), with a weighted average duration of 3.5 years.

93

Real estate

Commercial real estate properties.    As of March 31, 2013, we owned 34 single tenant retail properties with an aggregate book value of $263.8 million. These properties are leased on a net basis where the tenant is generally responsible for payment of real estate taxes, building insurance and maintenance. Sixteen of our properties are leased to a national pharmacy chain, and the remaining properties are leased to a national discount retailer, a regional sporting goods store, and a regional membership warehouse club. As of March 31, 2013, our net leased properties comprised a total of 1.3 million square feet, had a 100% occupancy rate, had an average age since construction of 7 years and a weighted average remaining lease term of 19.5 years. In addition, as of March 31, 2013, we owned a 13 story office building with a book value of $18.0 million through a joint venture with an operating partner.

Residential real estate.    As of March 31, 2013, we owned 408 residential condominium units at Veer Towers in Las Vegas with a book value of $114.7 million through a joint venture with an operating partner. As of March 31, 2013, the units were 66% rented and occupied. We sold 19 units during the three months ended March 31, 2013, generating aggregate gains on sale of $3.4 million and we intend to sell the remaining units over time.

Other Investments

Institutional bridge loan partnership.    In 2011, we established an institutional partnership with a major pension fund to invest in first mortgage bridge loans that met pre-defined criteria. Our partner owns 90% of the equity and we own the remaining 10% on a pari passu basis. Our partner retains the discretion to accept or reject individual loans. As the general partner, we earn management fees and incentive fees from the partnership. In addition, we are entitled to retain origination fees of up to 1% on loans that we sell to the partnership. As of March 31, 2013, the partnership owned $237.5 million of first mortgage bridge loan assets that were financed by $113.6 million of term debt. Debt of the partnership is nonrecourse to the limited and general partners, except for customary nonrecourse carve-outs for certain actions and environmental liability. As of March 31, 2013, the book value of our investment in the institutional partnership was $13.4 million.

Other asset management activities.    As of March 31, 2013, we also managed three separate CMBS investment accounts for private investors with combined total assets of $9.1 million. Although, as of October 2012, we are no longer purchasing any new investments for these accounts, we will continue to manage the existing investments until their full prepayment or other disposition.

Business Outlook

We believe the commercial real estate finance market currently presents substantial opportunities for new origination, as it is characterized by stabilizing property values, a low interest rate environment, and a supply-demand imbalance for financing. Over $1.7 trillion of commercial real estate debt is scheduled to mature over the next five years according to Trepp, while at the same time traditional real estate lenders such as banks and insurance companies face significant new capital and regulatory requirements.

April 2010 marked the first new-issue, multi-borrower CMBS securitization since June 2008. For 2010 as a whole, new CMBS issuances totaled $11.6 billion. In 2011, new CMBS issuances totaled $32.7 billion, despite a slowdown in originations of commercial real estate mortgage loans during the second half of the year because of the uncertain economic climate created by the Euro-area crisis. In 2012, new CMBS issuance totaled $48.4 billion, a 47.9% increase over

94

2011. For the three months ended March 31, 2012 new CMBS issuances totaled $6.0 billion. For the three months ended March 31, 2013, new CMBS issuances totaled $22.9 billion, a 283.6% increase over the same period in 2012. We believe the CMBS market will continue to play an important role in the financing of commercial real estate in the United States.

We believe our ability to quickly and efficiently shift our focus between lending, securities, and real estate investment opportunities allows us to take advantage of attractive investment opportunities under a variety of market conditions. There are times when the conduit lending/securitization market conditions are very favorable and we shift our focus and allocate our equity toward that market. At other times, especially when markets are under stress, investment in securities is more attractive and we quickly shift focus and equity accordingly. In the current market environment, we believe we will be able to benefit from the relative lack of capital available for loans and certain types of real estate, commanding relatively high yields on conservatively underwritten commercial real estate investments.

The passage of the Dodd-Frank Act introduced complex, comprehensive legislation into the financial industry, which will have far reaching effects on the securitization industry and its participants. There is uncertainty as to how, in the coming years, the Dodd-Frank Act may affect us or our competitors. In addition, there can be no assurance that the recovery will continue or that we will be able to find appropriate investment opportunities.

Factors impacting operating results

There are a limited number of factors that influence our operating results in a meaningful way. The most meaningful include (1) our competition; (2) market and economic conditions; (3) loan origination volume; (4) profitability of securitizations; (5) avoidance of credit losses; (6) availability of debt and equity funding and the costs of that funding; (7) the net interest margin on our investments; and (8) effectiveness of our hedging and other risk management practices.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we may choose to rely on certain exemptions. See “Risk Factors—Risk related to our capital structure and operations—As an “emerging growth company” under the JOBS Act we are eligible to take advantage of certain exemptions from various reporting requirements.”

Results of Operations

The results of operations presented herein are those of LCFH, our predecessor.

95

Three Months Ended March 31, 2013 Compared to the Three Months Ended March 31, 2012

Overview

Net income attributable to preferred and common unit holders totaled $90.3 million for the three months ended March 31, 2013, compared to $54.6 million for the three months ended March 31, 2012. The increase in net income attributable to preferred and common unit holders was primarily the result of increased volume in loan securitizations of $797.2 million in the first three months of 2013 compared to $393.4 million in the first three months of 2012, combined with an increased securitization profit in 2013.

Adjusted net income attributable to preferred and common unit holders totaled $92.1 million for the three months ended March 31, 2013, compared to $50.3 million for the three months ended March 31, 2012. The increase in adjusted net income attributable to preferred and common unit holders was also due to the improved securitization results discussed in the preceding paragraph. See “—Non-GAAP financial measures” for our definition of adjusted net income attributable to preferred and common unit holders and a reconciliation to net income attributable to preferred and common unit holders.

Net interest income

Interest income totaled $31.3 million for the three months ended March 31, 2013, compared to $34.1 million for the three months ended March 31, 2012. The $2.8 million decrease in interest income was primarily attributable to a decrease in our average investment in our securities portfolios. For the three months ended March 31, 2013, securities investments averaged $1.1 billion (56.0% of average interest bearing investments) versus an average loan investment balance of $848.9 million. For the three months ended March 31, 2012, securities investments averaged $1.9 billion (78.9 % of average interest bearing investments) versus an average loan investment balance of $518.3 million.

Interest expense totaled $11.3 million for the three months ended March 31, 2013, compared to $7.6 million for the three months ended March 31, 2012. The $3.7 million increase in interest expense was primarily attributable to the $325.0 million of senior unsecured notes that were outstanding during the three months ended March 31, 2013 but not for the three months ended March 31, 2012.

Net interest income totaled $19.9 million for the three months ended March 31, 2013, compared to $26.5 million for the three months ended March 31, 2012. The $6.6 million decrease in net interest income was primarily attributable to the declining securities investment balance throughout the year and the additional interest expense incurred by the bond issuance.

Income from sales of loans, net

Income from sales of loans, net, which includes all sales, including conduit loans and other loans or from securitizations and other whole loan sales or other means, totaled $85.2 million for the three months ended March 31, 2013, compared to $41.2 million for the three months ended March 31, 2012, an increase of $44.0 million. In the three months ended March 31, 2013, we participated in two separate securitization transactions, selling 35 loans with an aggregate outstanding principal balance of $797.2 million. In the three months ended March 31, 2012, we participated in one securitization transaction, selling 23 loans with an aggregate outstanding principal balance of $393.4 million.

Income from sales of loans, net, represents gross proceeds received from the sale of loans into securitization trusts, less the book value of those loans at the time they were sold, less any costs associated with the securitization transactions.

96

When evaluating the performance of our loan securitization business, we generally consider the income from sales of loans, net, in conjunction with other income statement items that are directly related to such securitization transactions, including portions of the realized net result from derivative transactions that are specifically related to hedges on the securitized or sold loans, which we reflect as hedge gain/(loss) in the table below.

Below are the conduit mortgage loan sales for the three month periods ended March 31, 2013 and 2012:

	Three months ended March 31,
	2013		2012
Sold Conduit Loans
Number of loans		35		23
Face amount of loans sold ($ in thousands)	$	797,207	$	393,440
Securitizations		2		1
Income from sale of loans, net ($ in thousands)	$	84,533	$	40,630
Hedge gain/(loss) ($ in thousands)(1)		2,164		(2,236	)
Net result ($ in thousands)	$	86,697	$	38,394

(1) The following is a reconciliation of hedge gain/(loss) related to loans securitized to net results from derivative transactions as reported in our consolidated financial statements included herein.

	Three months ended March 31,
	2013		2012
	($ in thousands)
Hedge gain/(loss) related to lending and securities positions	$	106	$	(171	)
Hedge gain/(loss) related to loans securitized		2,164		(2,236	)
Net results from derivative transactions	$	2,270	$	(2,407	)

Income from sales of securities, net

Income from sales of securities, net, totaled $2.6 million for the three months ended March 31, 2013, compared to $1.3 million for the three months ended March 31, 2012, an increase of $1.3 million. For the three months ended March 31, 2013, we sold $41.6 million of securities, comprised of $18.0 million of CMBS for income of $2.1 million, and $23.7 million of U.S. Agency Securities in two separate securitizations of those securities for income of $0.5 million. For the three months ended March 31, 2012, we sold $31.7 million of CMBS securities, for income of $1.3 million.

Income from sales of real estate, net

For the three months ended March 31, 2013 sales of residential real estate properties totaled $8.0 million. During the three months ended March 31, 2013 we sold 19 residential condominium units. Sale of commercial real estate properties totaled $70.9 million for the three months ended March 31, 2012, during which we sold 12 properties that were leased to drugstores under long-term leases.

Other income

Operating lease income totaled $6.5 million for the three months ended March 31, 2013, compared to $0.9 million for the three months ended March 31, 2012. The increase of $5.6 million reflects the larger portfolio of real estate in 2013.

97

Fee income totaled $1.4 million for the three months ended March 31, 2013, compared to $0.5 million for the three months ended March 31, 2012. We generate fee income from the management of our institutional partnership as well as from origination fees, exit fees and other fees on the loans we originate and in which we invest. The $0.9 million increase in fee income year over year was due to an increase in fee generating activity, primarily the increase in loan origination volume.

Net result from derivative transactions

Net result from derivative transactions represented a gain of $2.3 million for the three months ended March 31, 2013, compared to a loss of $2.4 million for the three months ended March 31, 2012, an increase of $4.7 million. The net result from derivative transactions includes the portion of net result from derivative transactions discussed above in the section “income from sales of loans, net” as well as other realized and unrealized derivative gains and losses. The derivative positions that generated these results were a combination of interest rate swaps, caps, and futures that we employed in an effort to hedge the value of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The lower level of losses in 2012 was primarily related to a more moderate decline in interest rates, which generally increased the value of our fixed rate loan and securities investments, and decreased the fair value of our offsetting derivative transactions. The total net result from derivative transactions is comprised of hedging interest expense, realized losses related to hedge terminations and unrealized losses related to changes in the fair value of asset hedges. The hedge positions were related to fixed rate conduit-eligible loans and securities investments.

Operating expenses

Operating expenses totaled $13.6 million for the three months ended March 31, 2013, compared to $8.2 million for the three months ended March 31, 2012. Operating expenses are comprised primarily of compensation and benefits expense, professional fees, lease expense, and technology expenses. The increase of $5.4 million in operating expenses was primarily related to increased compensation and benefits expense, which totaled $2.3 million of the increase, associated with improved operating results as the $35.7 million year over year increase in net income resulted in higher incentive compensation expense accounts and additional headcount as the average number of employees rose from 48 to 57.

Fee expense

Fee expense totaled $12.7 million for the three months ended March 31, 2013, compared to $6.3 million for the three months ended March 31, 2012. Fee expense is comprised primarily of origination commissions related to loan profitability and real estate acquisition costs. The increase of $6.4 million in fee expense was primarily related to origination commissions on increased profitability on loan securitization for the three months ended March 31, 2013.

Other costs and expenses

Depreciation totaled $3.1 million for the three months ended March 31, 2013, compared to $0.4 million for the three months ended March 31, 2012. The $2.7 million increase in depreciation is attributable to increased real estate of $395.7 million at March 31, 2013 versus $49.9 million at March 31, 2012.

We had a $0.2 million provision for loan losses for the three months ended March 31, 2013, compared to no provision for loan losses for the three months ended March 31, 2012. We invest primarily in loans with high credit quality, and we sell our conduit mortgage loans in the ordinary

98

course of business. We estimate our loan loss provision based on our historical loss experience and our expectation of losses inherent in the portfolio but not yet realized. We have had no events of impairment on the loans we originated since inception. As a result, our reserve for loan losses remained relatively unchanged as of March 31, 2013, with an increase of $0.2 million.

Earnings from investment in equity method investee

In 2011, we entered into an institutional partnership for which we use the equity method of accounting. Earnings from investment in equity method investee totaled $0.4 million for the three months ended March 31, 2013, compared to $0.3 million for the three months ended March 31, 2012. We own a 10% equity interest in the institutional partnership and receive distributions on a pari passu basis with one other financial institution’s equity interest. Our proportionate share of the net income of the institutional partnership, as defined in the institutional partnership agreement, is reflected on our income statement as earnings from investment in equity method investee.

Tax expense

Tax expense totaled $2.1 million for the three months ended March 31, 2013, compared to $0.3 million for the three months ended March 31, 2012. The increase of $1.8 million is primarily attributable to increased revenue earned on securitizations which is subject to the New York City Unincorporated Business Tax.

Year Ended December 31, 2012 Compared to the Year Ended December 31, 2011

Overview

Net income attributable to preferred and common unit holders totaled $178.1 million for the year ended December 31, 2012, compared to $70.1 million for the year ended December 31, 2011. The increase in net income attributable to preferred and common unit holders was primarily the result of increased volume in loan securitizations from $1.0 billion in 2011 to $1.6 billion in 2012, combined with an increased securitization profit in 2012.

Adjusted net income attributable to preferred and common unit holders totaled $174.9 million for the year ended December 31, 2012, compared to $102.9 million for the year ended December 31, 2011. The increase in adjusted net income attributable to preferred and common unit holders was also due to the improved securitization results discussed in the preceding paragraph.

Investment and Financing Overview

Investment activity in 2012 focused on loan originations and real estate investments. We originated and funded $2.5 billion in principal value of commercial mortgage loans in the year ended December 31, 2012. We also invested $428.7 million in real estate. Our securities portfolio continued to amortize over the course of the year. We acquired $425.8 million of new securities, which was not enough to offset $279.3 million of sales and $951.2 million of amortization in the portfolio, which contributed to a net reduction in our securities portfolio of $819.5 million.

The financing climate improved in 2012 compared to 2011. In the third and fourth quarters of 2012 we entered into two significant new financing arrangements, including a subsidiary’s membership in the FHLB, and the issuance of the Notes. We also successfully extended several of our key loan and securities financing facilities over the course of the year.

99

We originated and funded $1.4 billion in principal value of commercial mortgage loans in the year ended December 31, 2011, and securitized and sold $1.4 billion of loans over the course of the year. We also invested in $991.2 million in securities in 2011, which was largely offset by $547.5 million of repayment of securities and $406.9 million in sales of securities. The investment climate in 2011 was generally stable, with the exception of the third quarter of the year, when uncertainty related to a number of domestic and foreign economic issues, including concerns regarding the finances of a number of member countries of the European Union, had a slow-down effect on the CMBS market. During the third quarter of 2011, we curtailed our origination of first mortgage loans and made additional securities investments, as the adverse market conditions affecting lending translated into greater availability of attractively priced securities investments.

In 2011, we successfully raised additional equity capital and additional committed financing. In the third quarter of 2011, we completed our second offering of equity interests and raised commitments totaling $257.4 million. A total of $86.1 million of the capital was called in the third quarter of 2011, and the remaining $171.3 million was called in December 2011. At that time, we used the proceeds of the capital call to pay down debt and fund new investments, resulting in a year-end debt to equity ratio of 1.6:1.0. The impact of this additional equity funding on interest income, interest expense, and other income was limited in 2011. Other notable funding events during the year included successful extensions of existing funding facilities, the creation of the institutional bridge loan partnership, and the final repayment of amounts borrowed under the Federal Reserve Bank of New York’s Term Asset-Backed Securities Loan Facility, or TALF.

Net interest income

Interest income totaled $136.2 million for the year ended December 31, 2012, compared to $133.3 million for the year ended December 31, 2011. Interest income varies upon the mix of our interest bearing investments. The $2.9 million increase in interest income was primarily attributable to increase in our average investment in our loan portfolio. In 2012, securities investments averaged $1.6 billion (69.4% of average interest bearing investments) versus an average loan investment balance of $696.9 million. In the preceding year, securities investments averaged $1.9 billion (79.5% of average interest bearing investments) versus an average loan investment balance of $502.4 million.

Interest expense totaled $36.5 million for the year ended December 31, 2012, compared to $35.8 million for the year ended December 31, 2011. Interest expense will vary depending upon the amount of leverage we choose to use and the average cost to borrow funds. The $0.7 million increase in interest expense was primarily attributable to the addition of the interest expense on the Notes offset by the declining cost of funds on our more recent debt facilities.

Net interest income totaled $99.7 million for the year ended December 31, 2012, compared to $97.5 million for the year ended December 31, 2011. The change in the net interest margin from 2011 to 2012 is due to the mix of our investments with a heavier emphasis on loans combined with the average yield on those investments offset by a net higher cost of funds resulting from the interest on the Notes.

Income from Sales of Securities, Net

Income from sales of securities, net, totaled $19.0 million for the year ended December 31, 2012, compared to $20.1 million for the year ended December 31, 2011, a decrease of $1.1 million. For the year ended December 31, 2012, we sold $279.3 million of securities, comprised of $190.7 million of CMBS for income of $10.0 million, and $88.6 million of U.S.

100

Agency Securities in two separate securitizations of those securities for income of $9.0 million. For the year ended December 31, 2011, we sold $406.9 million of securities, comprised of $239.4 million of CMBS securities for income of $6.6 million, and $167.5 million of U.S. Agency Securities in two separate securitizations of those securities for income of $13.4 million.

Income from Sales of Loans, Net

Income from sales of loans, net, which includes all loan sales, whether by securitization, whole loan sales or other means, totaled $154.6 million for the year ended December 31, 2012, compared to $66.3 million for the year ended December 31, 2011, an increase of $88.3 million. In the year ended December 31, 2012, we participated in six separate securitization transactions, selling 95 loans with an aggregate outstanding principal balance of $1.6 billion. In the year ended December 31, 2011, we participated in three separate securitization transactions, selling 61 loans with an aggregate outstanding principal balance of $1.0 billion and we also sold one first mortgage whole loan with an outstanding principle balance of $229.0 million in a separate transaction with an insurance company.

Income from sales of loans, net, represents gross proceeds received from the sale of loans into securitization trusts, less the book value of those loans at the time they were sold, less any costs associated with the securitization transactions.

When evaluating the performance of our loan securitization business, we generally consider the income from sales of loans, net, in conjunction with other income statement items that are directly related to such securitization transactions, including portions of the realized net result from derivative transactions that are specifically related to hedges on the securitized or sold loans which we reflect as hedge gain/(loss) in the table below.

	For the year ended December 31,
	2012			2011			2010
Sold Conduit Loans
Number of loans		95			61			31
Face amount of loans sold ($ in thousands)	$	1,599,858		$	1,016,469		$	329,762
Securitizations		6			3			2
Income from sale of loans, net ($ in thousands)	$	152,776		$	44,167		$	30,886
Hedge gain/(loss) ($ in thousands)(1)		(20,110	)		(11,795	)		(8,018	)
Net result ($ in thousands)	$	132,666		$	32,372		$	22,868

(1) The following is a reconciliation of hedge gain/(loss) related to loans securitized to net results from derivative transactions as reported in our consolidated financial statements included herein.

	For the year ended December 31,
	2012			2011			2010
	($ in thousands)
Hedge gain/(loss) related to lending and securities positions	$	(15,541	)	$	(69,579	)	$	(12,729	)
Hedge gain/(loss) related to loans securitized		(20,110	)		(11,795	)		(8,018	)
Net results from derivative transactions	$	(35,651	)	$	(81,374	)	$	(20,747	)

Other Income

Operating lease income totaled $8.3 million for the year ended December 31, 2012, compared to $2.3 million for the year ended December 31, 2011. The increase of $6.0 million reflects the larger portfolio of real estate in 2012.

101

Sale of real estate, net totaled $1.3 million for the year ended December 31, 2012. During 2012 we sold 13 properties that were leased to drugstores under long-term leases. There were no sales of real estate in 2011.

Fee income totaled $8.8 million for the year ended December 31, 2012, compared to $3.1 million for the year ended December 31, 2011. We generate fee income from the management of our institutional partnership as well as from origination fees, exit fees and other fees on the loans we originate and in which we invest. The $5.7 million increase in fee income year over year was due to an increase in fee generating activity, primarily the increase in loan origination volume.

Net Result from Derivative Transactions

Net result from derivative transactions represented a loss of $35.7 million for the year ended December 31, 2012, compared to a loss of $81.4 million for the year ended December 31, 2011, a decrease of $45.7 million. The net result from derivative transactions includes the portion of net result from derivative transactions discussed above in the section “income from sales of loans, net” as well as other realized and unrealized derivative gains and losses. The derivative positions that generated these results were a combination of interest rate swaps, caps, and futures that we employed in an effort to hedge the value of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The lower level of losses in 2012 was primarily related to a more moderate decline in interest rates, which generally increased the value of our fixed rate loan and securities investments, and decreased the fair value of our offsetting derivative transactions. During 2011, the market volatility in the third quarter resulted in significant losses in the interest rate hedge positions. The market conditions throughout 2012 did not reflect a similar level of volatility and therefore did not result in an equivalent level of losses on the open hedge positions. The total net result from derivative transactions is comprised of hedging interest expense, realized losses related to hedge terminations and unrealized losses related to changes in the fair value of asset hedges. The hedge positions were related to fixed rate conduit-eligible loans and securities investments.

Operating Expenses

Operating expenses totaled $72.6 million for the year ended December 31, 2012, compared to $35.5 million for the year ended December 31, 2011. Operating expenses are comprised primarily of compensation and benefits expense, professional fees, lease expense, and technology expenses. The increase of $37.1 million in operating expenses was primarily related to increased compensation and benefits expense associated with improved operating results as the $108.0 million year over year increase in net income resulted in higher incentive compensation expense and additional headcount as the average number of employees rose from 40 to 54.

Other Costs and Expenses

Depreciation totaled $3.6 million for the year ended December 31, 2012, compared to $1.0 million for the year ended December 31, 2011. The $2.6 million increase in depreciation is attributable to increased real estate of $380.0 million at December 31, 2012 versus $28.8 million at December 31, 2011.

We had a $0.4 million provision for loan losses for the year ended December 31, 2012, compared to no provision for loan losses for the year ended December 31, 2011. We invest primarily in loans with high credit quality, and we sell our conduit mortgage loans in the ordinary course of business. We estimate our loan loss provision based on our historical loss experience and our expectation of losses inherent in the portfolio but not yet realized. We have

102

had no events of default or credit losses on the loans we originated since inception. As a result, our reserve for loan losses remained relatively unchanged in 2012.

Earnings from Investment in Equity Method Investee

In 2011, we entered into an institutional partnership for which we use the equity method of accounting. Earnings from investment in equity method investee totaled $1.3 million for the year ended December 31, 2012, compared to $0.3 million for the year ended December 31, 2011. We own a 10% equity interest in the institutional partnership on a pari passu basis with one other financial institution’s 90% equity interest. Our proportionate share of the net income of the institutional partnership is reflected on our income statement as earnings from investment in equity method investee.

Tax Expense

Tax expense totaled $2.6 million for the year ended December 31, 2012, compared to $1.5 million for the year ended December 31, 2011. The increase of $1.1 million is primarily attributable increased revenue earned on securitization that is subject to the New York City Unincorporated Business Tax.

Year Ended December 31, 2011 Compared to the Year Ended December 31, 2010

Overview

Net income attributable to preferred and common unit holders totaled $70.1 million for the year ended December 31, 2011, compared to $88.5 million for the year ended December 31, 2010. The decrease in net income attributable to preferred and common unit holders was primarily the result of higher net interest income and income from sales of loans that was more than offset by an unfavorable change in net result from derivative transactions.

Adjusted net income attributable to preferred and common unit holders totaled $102.9 million for the year ended December 31, 2011, compared to $91.4 million for the year ended December 31, 2010. The increase in adjusted net income attributable to preferred and common unit holders was primarily attributable to the same factors as cited above, adjusted to exclude interest rate hedging losses of $32.0 million and $2.5 million in 2011 and 2010, respectively, related to hedges on the value of assets still residing on the balance sheet as of the end of each respective year, as well as real estate depreciation and amortization and to add back non-cash stock-based compensation.

Investment and Financing Overview

We originated and funded $1.4 billion in principal value of commercial mortgage loans in the year ended December 31, 2011, and securitized and sold $1.2 billion in principal value of loans over the course of the year. We also invested in $991.2 million in securities in 2011, which was largely offset by $547.5 million of repayment of securities and $406.9 million in sales of securities. The investment climate in 2011 was generally stable, with the exception of the third quarter of the year, when uncertainty related to a number of domestic and foreign economic issues, including concerns regarding the finances of a number of member countries of the European Union, had a slow-down effect on the CMBS market. During the third quarter of 2011, we curtailed our origination of first mortgage loans and made additional securities investments, as the adverse market conditions affecting lending translated into greater availability of attractively priced securities investments.

In 2011, we successfully raised additional equity capital and additional committed financing. In the third quarter of 2011, we completed our second offering of equity interests and raised

103

commitments totaling $257.4 million. $86.1 million of the capital was called in the third quarter of 2011, and the remaining $171.3 million was called in December 2011. At that time, we used the proceeds of the capital call to pay down debt and fund new investments, resulting in a year-end debt to equity ratio of 1.6:1.0. The impact of this additional equity funding on interest income, interest expense, and other income was limited in 2011. Other notable funding events during the year included successful extensions of existing funding facilities, the creation of the institutional bridge loan partnership, and the final repayment of TALF debt.

In 2010, commercial mortgage lending markets continued to improve and the market for new issue, multi-borrower CMBS was in the early stages of re-starting after a period of low activity in the wake of the preceding financial crisis. In 2010, we originated and funded $784.1 million of commercial mortgage loans and, capitalizing on the increased activity in the new issue CMBS market, participated in two securitization transactions in which we profitably sold $329.8 million in principal value of loans we had originated. CMBS credit spreads generally narrowed over the course of the year, which had the effect of increasing the profitability of those securitization transactions and also increased the values of our CMBS and U.S. Agency Securities portfolios.

Also in 2010, we enhanced our access to secured debt financing while reducing our cost of that financing. We entered 2010 with a total of $300.0 million of committed secured debt financing from one major financial institution. By the end of the year, we had added $650.0 million of committed secured funding capacity to finance our loan originations from two major banks and one insurance company. With respect to securities financing, the TALF Program ceased to provide access to additional funding at the end of March 2010. At that point, we had over $1.1 billion of long term fixed rate debt outstanding under that program. In October 2010, we established a $1.0 billion term secured funding facility for our CMBS holdings that we used to refinance a substantial portion of the securities previously financed under TALF. We amended the facility and the funding was reduced to $600.0 million during 2012. The result was a substantial reduction in our cost of financing. The impact of that cost reduction was evident in only our fourth quarter results in 2010.

Net Interest Income

Interest income totaled $133.3 million for the year ended December 31, 2011, compared to $129.3 million for the year ended December 31, 2010. Loan investments in both years yielded higher average interest rates than our securities investments. The $4.0 million increase in interest income was primarily attributable to a change in the mix of investments we carried from year to year. In 2011, securities investments averaged $1.9 billion (79.5% of average interest bearing investments) versus an average loan investment balance of $502.4 million. In the preceding year, securities investments averaged $2.1 billion (90.1% of average interest bearing investments) versus an average loan investment balance of $226.6 million. The impact of this additional volume and change in the mix of interest bearing investment assets was partially offset by a decline in the average yield on earning assets as market conditions moderated.

Interest expense totaled $35.8 million for the year ended December 31, 2011, compared to $48.9 million for the year ended December 31, 2010. The $13.1 million decrease in interest expense was primarily attributable to the replacement of higher cost TALF financing with lower cost asset repurchase financing and lower debt costs in general.

Net interest income totaled $97.5 million for the year ended December 31, 2011, compared to $80.4 million for the year ended December 31, 2010. The $17.1 million increase in net interest income was primarily attributable to the decrease in interest expense as noted above.

104

Income from Sales of Securities, Net

Income from sales of securities, net, totaled $20.1 million for the year ended December 31, 2011, compared to $22.1 million for the year ended December 31, 2010, a decrease of $2.0 million. For the year ended December 31, 2011, we sold $406.9 million of securities, comprised of $239.4 million of CMBS securities for income of $6.6 million, and $167.5 million of U.S. Agency Securities in two separate securitizations of those securities for income of $13.4 million. For the year ended December 31, 2010, we sold $483.6 million of CMBS securities.

Income from Sales of Loans, Net

Income from sales of loans, net, totaled $66.3 million for the year ended December 31, 2011, compared to $30.5 million for the year ended December 31, 2010, an increase of $35.8 million. In the year ended December 31, 2011, we participated in three separate securitization transactions, selling 61 loans with an aggregate outstanding principal balance of $1.0 billion. We also sold one first mortgage whole loan with an outstanding principal balance of $229.0 million in a separate transaction with an insurance company. In the year ended December 31, 2010, we participated in two separate securitization transactions, selling 31 loans with an aggregate outstanding principal balance of $329.8 million.

Income from sales of loans, net, represents gross proceeds received from the sale of loans into securitization trusts, less the book value of those loans at the time they were sold, less any costs associated with the securitization transactions.

When evaluating the performance of our loan securitization business, we generally consider the income from sales of loans, net, in conjunction with the realized net result from derivative transactions that are specifically related to hedges on the securitized or sold loans.

For the year ended December 31, 2011, our income from sales of loans of $66.3 million was offset by realized losses on derivative transactions of $11.8 million for a net result from sales of loans of $54.5 million.

For the year ended December 31, 2010, our income from sales of loans, net, of $30.5 million was offset by realized losses on derivative transactions of $8.0 million for a net result from sales of loans of $22.5 million.

Other Income

Operating lease income totaled $2.3 million for the year ended December 31, 2011, compared to $1.0 million for the year ended December 31, 2010. Although we only acquired one relatively small net rental property in 2011, we had the benefit of a full year of rental income on the properties acquired in the preceding year.

There were no sales of real estate in 2011. Sale of real estate, net totaled $2.4 million for the year ended December 31, 2010. During 2010, we sold a portfolio of seven properties that were leased under long-term leases to drugstores.

Fee income totaled $3.1 million for the year ended December 31, 2011, compared to $1.4 million for the year ended December 31, 2010. We generate fee income from the management of our institutional partnership as well as from origination fees, exit fees and other fees on the loans we originate and in which we invest. The $1.7 million increase in fee income year over year was due to an increase in volume of activity generating these fees, primarily the increase in loan origination volume.

105

Net Result from Derivative Transactions

Net result from derivative transactions represented a loss of $81.4 million for the year ended December 31, 2011, compared to a loss of $20.7 million for the year ended December 31, 2010, an unfavorable increase of $60.7 million. The derivative positions that generated these results were a combination of interest rate swaps, caps, and futures that we employed in an effort to hedge the value of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The higher level of losses in 2011 was due to declines in interest rates and the larger volume of hedge positions required as a result of an increased quantity of fixed rate loan origination in that year.

The total net result from derivative transactions is comprised of hedging interest expense, realized losses related to hedge terminations and unrealized losses related to changes in the fair value of asset hedges. The hedge positions were related to fixed rate conduit-eligible loans and securities investments.

Operating Expenses

Operating expenses totaled $35.5 million for the year ended December 31, 2011, compared to $26.7 million for the year ended December 31, 2010. The increase in operating expenses was primarily related to increased compensation and benefits expense associated with improved operating results and additional headcount.

Other Costs and Expenses

Depreciation totaled $1.0 million for the year ended December 31, 2011, compared to $0.4 million for the year ended December 31, 2010. The increase in depreciation is attributable to continued investment in our net lease and other real estate portfolio.

We had no provision for loan losses for the year ended December 31, 2011, compared to a $0.9 million provision for the year ended December 31, 2010. We invest primarily in loans with high credit quality, and we sell our conduit mortgage loans in the ordinary course of business. We estimate our loan loss provision based on our historical loss experience and our expectation of losses inherent in the portfolio but not yet realized. We have had no events of default or credit losses on the loans we originated since inception. As a result, our reserve for loan losses remained relatively unchanged in 2011.

Earnings from Investment in Equity Method Investee

Earnings from our investment in equity method investee totaled $0.3 million for the year ended December 31, 2011. In 2011, we entered into an institutional partnership for which we use the equity method of accounting. We own a 10% equity interest in the institutional partnership on a pari passu basis with one other financial institution’s 90% equity interest. Our proportionate share of the net income of the institutional partnership is reflected on our income statement as earnings from investment in equity method investee.

Tax Expense

Tax expense totaled $1.5 million for the year ended December 31, 2011, compared to $0.6 million for the year ended December 31, 2010. The change is primarily attributable to an increase in income that is subject to the New York City Unincorporated Business Tax.

106

Liquidity and Capital Resources

Our financing strategies are critical to the success and growth of our business. We manage our financing to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties.

We require substantial amounts of capital to support our business. The management team, in consultation with our Board of Directors, establishes our overall liquidity and capital allocation strategies. A key objective of those strategies is to support the execution of our business strategy while maintaining sufficient ongoing liquidity throughout the business cycle to service our financial obligations as they become due. When making funding and capital allocation decisions, members of our senior management consider business performance; the availability of, and costs and benefits associated with, different funding sources; current and expected capital markets and general economic conditions; our balance sheet and capital structure, and our targeted liquidity profile and risks relating to our funding needs.

Our primary uses of liquidity are for (1) the funding of loan and real estate-related investments, (2) the repayment of short-term and long-term borrowings and related interest, (3) the funding of our operating expenses and (4) distributions to our equity investors to finance their income tax obligations related to the portion of our taxable income allocated to each of them. We require short-term liquidity to fund loans that we originate and hold on our consolidated balance sheet pending sale, including through whole loan sale, participation, or securitization. We generally require longer-term funding to finance the loans and real estate-related investments that we hold for investment.

Our primary sources of liquidity have been (1) cash and cash equivalents, (2) cash generated from operations, (3) borrowings under various financing arrangements, (4) principal repayments on investments including mortgage loans and securities, (5) proceeds from securitizations and sales of loans, (6) proceeds from the sale of securities, (7) proceeds from the sale of real estate, and (8) proceeds from the issuance of equity capital.

We have historically maintained a debt-to-equity ratio of 3:1 or below. This ratio typically fluctuates during the course of a fiscal year due to the normal course of business in our conduit lending operations, in which we have generally securitized our inventory of loans at intervals, and also because of changes in our asset mix, due in part to such securitizations. We generally seek to match fund our assets according to their liquidity characteristics and expected hold period. We believe that the defensive positioning of our predominantly senior secured assets and our financing strategy has allowed us to maintain financial flexibility to capitalize on an attractive range of senior secured market opportunities as they have arisen.

Our principal debt financing sources include: (1) committed secured funding provided by banks and an insurance company, (2) uncommitted secured funding sources, including asset repurchase agreements with a number of banks, (3) long term nonrecourse mortgage financing, (4) long term senior unsecured notes in the form of corporate bonds and (5) borrowings on both a short and long-term committed basis, made by our wholly-owned subsidiary, Tuebor Captive Insurance Company LLC (“Tuebor”), from the FHLB.

As of March 31, 2013, we had unrestricted cash of $33.7 million, unencumbered loans of $421.5 million, unencumbered securities of $293.5 million and restricted cash of $89.9 million.

Our captive insurance company subsidiary is subject to state regulations which require that dividends may only be made with regulatory approval.

107

Cash and cash equivalents

We held unrestricted cash and cash equivalents of $33.7 million, $43.8 million and $83.4 million at March 31, 2013, December 31, 2012, and December 31, 2011, respectively.

Cash generated from operations

Our operating activities were a net provider of cash of $149.6 million during the three months ended March 31, 2013, and generated net cash of $99.3 million for the three months ended March 31, 2012. Our operating activities were a net user of cash of $108.4 million during the year ended December 31, 2012, generated net cash of $340.3 million for the year ended December 31, 2011, and were a net user of $231.3 million for the year ended December 31, 2010. Cash from operations includes the purchase of loans held for sale, and the proceeds from sale of loans and gains from sales of loans.

Borrowings under various financing arrangements

Our financing strategies are critical to the success and growth of our business. We manage our leverage policies to complement our asset composition and to diversify our exposure across multiple counterparties. Our borrowings under various financing arrangements as of March 31, 2013 and December 31, 2012 are set forth in the table below ($ in thousands).

	As of
	March 31, 2013		December 31, 2012
	($ in thousands)
Committed loan facilities	$	51,854	$	226,367
Committed securities facility		127,312		278,021
Uncommitted securities facilities		202,995		289,528
Borrowings under credit agreement		30,000		—
Long term financing		153,989		103,756
Borrowings from the FHLB		423,000		262,000
The Notes		325,000		325,000
Total	$	1,314,150	$	1,484,672

The Company’s repurchase facilities include covenants covering minimum net worth requirements (ranging from $75.0 million to $780.0 million), maximum reductions in net worth over stated time periods, minimum liquidity levels (typically $30.0 million of cash or a higher standard that allows for the inclusion of liquid securities), maximum leverage ratios, which are calculated in various ways, and, in the instance of one provider, an interest coverage ratio of 1.50x if certain liquidity thresholds are not satisfied. The Company was in compliance with all covenants as of March 31, 2013 and December 31, 2012. Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including pledges of the equity of certain subsidiaries. From time to time, certain of these financing arrangements and loans may prohibit certain of our subsidiaries from paying dividends to the Company, from making distributions on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or other assets to the Company or other subsidiaries of the Company.

Committed loan facilities

We are parties to multiple committed loan facilities, as outlined in the table below, totaling $1.2 billion of credit capacity. Assets pledged as collateral under these facilities are generally limited to whole mortgage loans collateralized by first liens on commercial real estate. Our

108

repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum debt/partners’ capital ratios. We believe we are in compliance with all covenants as of March 31, 2013 and December 31, 2012.

We have the option to extend some of our existing facilities subject to a number of customary conditions. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, and, if the estimated market value of the included collateral declines, have the right to require additional collateral or a full and/or partial repayment of the facilities (margin call), sufficient to rebalance the facilities. Typically, the facilities are established with stated guidelines regarding the maximum percentage of the collateral asset’s market value that can be borrowed. We often borrow at a lower percentage of the collateral asset’s value than the maximum leaving us with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis. Our committed loan facilities as of March 31, 2013 were as follows:

Committed Amount		Outstanding Amount		Interest Rate(s) at Mar. 31, 2013	Maturity		Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral
($ in thousands)
	$300,000	$	12,146	Between 2.448% and 2.456%		9/26/2013	N/A	First mortgage commercial real estate loans & investment grade commercial mortgage backed securities	$	180,716
	50,000		3,238	2.708%		4/5/2013	N/A	First mortgage commercial real estate loans		6,476
	450,000		36,470	Between 2.452% and 3.402%		5/24/2015	Two additional twelve month periods at Company’s option	First mortgage commercial real estate loans		174,861
	300,000		—	—		1/24/2014	N/A	First mortgage commercial real estate loans		—
	50,000		30,000	2.950%		1/24/2016	N/A	First mortgage commercial real estate loans		56,824
	$1,150,000	$	81,854						$	418,877

Committed securities facility

We are a party to a term master repurchase agreement with a major U.S. banking institution for CMBS securities. As of March 31, 2013 and December 31, 2012, there were $127.3 million and $278.0 million, respectively, in borrowings outstanding under such agreement that mature in 2014. The borrowings under this agreement had funding rates of 1.41% and were collateralized by real estate securities with a fair market value of $145.0 million and $324.9 million at March 31, 2013 and December 31, 2012, respectively. As we do in the case of borrowings under committed loan facilities, we often borrow at a lower percentage of the collateral asset’s value than the maximum leaving us with excess borrowing capacity that can be drawn upon a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.

109

Uncommitted securities facilities

We are party to multiple master repurchase agreements with several counterparties to finance our investments in CMBS and U.S. Agency Securities. There was $203.0 million and $289.5 million outstanding under such facilities with several counterparties as of March 31, 2013 and December 31, 2012, respectively. The borrowings under these agreements had less than three month tenors, funding rates ranging from 0.70% to 1.71%, with typical advance rates between 60% and 95% of the collateral. These borrowings were collateralized by real estate securities with fair market values of $238.3 million and $349.6 million at March 31, 2013 and December 31, 2012, respectively. The securities that served as collateral for these borrowings are highly liquid and marketable assets that are typically of relatively short duration. As we do in the case of other secured borrowings, we often borrow at a lower percentage of the collateral asset’s value than the maximum leaving us with excess borrowing capacity that can be drawn upon a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.

Borrowings under credit agreement

On January 24, 2013, we entered into a $50.0 million credit agreement with one of our committed financing counterparties in order to finance our securities and lending activities. As of March 31, 2013 there was $30.0 million in borrowings outstanding under this facility. The borrowings under this agreement are collateralized by eligible borrowing base assets with funding rates of 2.95%, with typical advance rates between 30% and 65% of the collateral. These borrowings were collateralized by loans with a carrying value of $56.8 million at March 31, 2013.

Long term financing

We generally finance our real estate using long term nonrecourse mortgage financing. During the first three months of 2013, we executed five term debt agreements to finance real estate. These nonrecourse debt agreements are fixed rate financing at rates ranging from 4.25% to 6.75% and mature between 2020 and 2023. During the first three months of 2012, we executed one term debt agreement to finance real estate. This nonrecourse debt agreement is fixed rate financing at 5.50% and matures in 2022. Long term financing totaled $154.0 million and $103.8 million at March 31, 2013 and December 31, 2012, respectively.

FHLB financing

On July 11, 2012, our wholly-owned subsidiary, Tuebor, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of March 31, 2013, Tuebor had $423.0 million of borrowings outstanding, with terms of overnight to 7 years, and interest rates of 0.20% to 1.47%. Collateral for the borrowings was comprised of $378.3 million of CMBS and U.S. Agency Securities and $227.9 million of mortgage loan receivables held for investment. As of December 31, 2012, Tuebor had $262.0 million of borrowings outstanding, with terms of 6 months to 5 years, interest rates of 0.39% to 0.93%. Collateral for the borrowings was comprised of $333.5 million of CMBS and U.S. Agency Securities. Tuebor is subject to state regulations which require that dividends (including dividends to us as its parent company) may only be made with regulatory approval.

The Notes

On September 14, 2012, LCFH and its subsidiary Ladder Capital Finance Corporation co-issued $325.0 million in aggregate principal amount of 7.375% Senior Notes due 2017 at par. The Notes are not guaranteed by any of our subsidiaries. Interest on the Notes is payable on

110

April 1 and October 1 of each year and will mature on October 1, 2017. The Notes are senior unsecured obligations and rank equally with all of the co-issuers’ existing and future senior indebtedness, senior to all of their existing and future subordinated indebtedness, effectively subordinated to all of their present and future senior secured indebtedness to the extent of the value of the assets securing such debt. The Notes are unsecured and are subject to covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type.

The indenture governing the Notes provides for customary events of default, which include (subject in certain cases to customary grace and cure periods and notification requirements), among others: non-payment of principal or interest; breach of other agreements in the indenture governing the Notes; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the co-issuers or certain subsidiaries; and certain events of bankruptcy or insolvency.

Principal Repayments on Investments

We receive principal amortization on our loans and securities as part of the normal course of our business. Repayment of real estate securities provided net cash of $99.6 million for the three months ended March 31, 2013, and $256.6 million for the three months ended March 31, 2012. Repayment of mortgage loan receivables provided net cash of $122.6 million for the three months ended March 31, 2013, and $61.1 million for the three months ended March 31, 2012. Repayment of real estate securities provided net cash of $951.2 million for the year ended December 31, 2012, $547.5 million for the year ended December 31, 2011 and $344.3 million for the year ended December 31, 2010. Repayment of mortgage loan receivables provided net cash of $280.6 million for the year ended December 31, 2012, $64.2 million for the year ended December 31, 2011 and $69.9 million for the year ended December 31, 2010.

Proceeds from Securitizations and Sales of Loans

We sell our conduit mortgage loans to securitization trusts and other third-parties as part of our normal course of business. Proceeds from sales of mortgage loans provided net cash of $949.3 million for the three months ended March 31, 2013, and $502.3 million for the three months ended March 31, 2012. Proceeds from sales of mortgage loans provided net cash of $1.9 billion for the year ended December 31, 2012, $1.4 billion for the year ended December 31, 2011 and $358.5 million for the year ended December 31, 2010.

Proceeds from the Sale of Securities

We invest in CMBS and U.S. Agency Securities. Proceeds from sales of securities provided net cash of $41.6 million for the three months ended March 31, 2013, and $31.7 million for the three months ended March 31, 2012. Proceeds from sales of securities provided net cash of $279.3 million for the year ended December 31, 2012, $406.9 million for the year ended December 31, 2011 and $483.6 million for the year ended December 31, 2010.

Proceeds from the Sale of Real Estate

We own a portfolio of commercial real estate properties leased to tenants under long-term leases as well as a 13 story office building. From time to time we may sell these properties. For the three months ended March 31, 2013, there were no sales of these properties. For the three months ended March 31, 2012, proceeds from the sale of 12 of these properties provided net cash of $70.9 million. For the year ended December 31, 2012, we realized proceeds of

111

$75.6 million from the sale of 13 such properties. We did not sell any properties for the year ended December 31, 2011 and for the year ended December 31, 2010, we realized proceeds of $40.1 million from the sale of seven such properties. We own, through a majority owned joint venture with an operating partner, a portfolio of residential condominium units, some of which are subject to residential leases. We intend to sell these properties. For the three months ended March 31, 2013, proceeds from the sale of 19 of these units provided net cash of $8.0 million.

Proceeds from the Issuance of Equity

There were no proceeds realized for the three month periods ended March 31, 2013 and 2012, in connection with the issuance of equity. In 2012, in connection with the issuance of our Series B participating preferred units to a new member of management, we realized proceeds of $3.0 million. In 2011, in connection with the issuance of our Series B participating preferred units to multiple investors, we realized proceeds of $257.4 million. We may issue additional equity in the future.

Other Potential Sources of Financing

In the future, we may also use other sources of financing to fund the acquisition of our target assets, including credit facilities, warehouse facilities, repurchase facilities and other secured and unsecured forms of borrowing. These financings may be collateralized or non-collateralized, may involve one or more lenders and may accrue interest at either fixed or floating rates. We may also seek to raise further equity capital or issue debt securities in order to fund our future investments.

Contractual Obligations

Contractual obligations as of March 31, 2013 were as follows:

	Contractual Obligations as of March 31, 2013
	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
	($ in thousands)
Secured financings	$	454,441	$	173,000	$	187,720	$	173,989	$	989,150
Interest payable(1)		35,851		67,715		65,885		34,610		204,061
Other funding obligations		15,774		—		—		—		15,774
Operating lease obligations		1,439		3,159		2,305		4,820		11,723
Senior unsecured notes		—		—		325,000		—		325,000
Unused facility fees		—		—		—		—		—
Total	$	507,505	$	243,874	$	580,910	$	213,419	$	1,545,708

(1) For borrowings with variable interest rates, we used the rates in effect as of March 31, 2013 to determine the future interest payment obligations.

The tables above do not include amounts due under our derivative agreements as those contracts do not have fixed and determinable payments.

As described in “Organizational Structure—Offering Transactions,” our existing investors will own LP Units following this offering. The unitholders of LCFH (other than Ladder Capital Corp) may (subject to the terms of the exchange agreement) exchange an equal number of LP Units and Class B common stock for shares of Class A common stock of Ladder Capital Corp on a one-for-one basis. As a result of subsequent exchanges of an equal number of LP Units and Class B common stock for shares of Class A common stock, Ladder Capital Corp will become

112

entitled to tax basis adjustments reflecting the difference between the price we pay to acquire LP Units and the proportional share of LCFH’s tax basis allocable to such units at the time of the exchange. These adjustments to tax basis may reduce the amount of tax that Ladder Capital Corp would otherwise be required to pay in the future and may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. We will enter into a tax receivable agreement with certain holders of the LP Units that will provide for the payment by Ladder Capital Corp to such holders of 85% of the amount of the benefits, if any, that Ladder Capital Corp is deemed to realize as a result of (i) these adjustments to tax basis (ii) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (iii) any deemed interest deductions arising from payments made by us pursuant to the tax receivable agreement. These payment obligations are obligations of Ladder Capital Corp and not of LCFH. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Distributions

In addition, LCFH is structured as a limited liability limited partnership, and accordingly, partners are responsible for paying income taxes on their respective shares of our taxable income. LCFH makes quarterly tax distributions equal to a partner’s “Quarterly Estimated Tax Amount,” which is computed (as more fully described in the LLLP Agreement) for each partner based upon their share of our taxable income multiplied by the highest marginal blended federal, state and local income tax rate applicable to an individual residing in New York, NY.

During the three months ended March 31, 2013, LCFH distributed $31.8 million, equivalent to 35.2% of our net income of $90.3 million. During the three months ended March 31, 2012, LCFH distributed $22.5 million equivalent to 41.2% of our net income of $54.6 million. During the year ended December 31, 2012, LCFH distributed $76.2 million, equivalent to 42.8% of our net income of $178.0 million. During the year ended December 31, 2011, LCFH distributed $44.0 million, equivalent to 62.8% of our $70.1 million of net income. For the year ended December 31, 2010, our dividend distributions were $42.9 million, or 48.5% of our net income of $88.5 million. It is important to note that certain income and expense items are treated differently when computing taxable income than for computing net income for financial reporting purposes.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies

Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that all of the decisions and assessments upon which our financial statements are based were reasonable at the time made, based upon information available to us at that time. In accordance with SEC guidance, the following discussion describes the accounting policies that apply to our operations that we believe to be most critical to an investor’s understanding of our financial results and condition and require management judgment and the use of estimates. This summary should be read in conjunction with a more complete discussion of our accounting policies included in Note 2 to the consolidated financial statements in this prospectus.

Real Estate Securities

We designate our real estate investments on the date of acquisition of the investment. Real estate securities that we do not hold for the purpose of selling in the near-term but may dispose

113

of prior to maturity are designated as available-for-sale and are carried at estimated fair value with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in partners’ capital. Similar treatment is afforded to our portfolio of interest-only securities available for sale. We use the specific identification method when determining the cost of securities sold and the amount reclassified out of accumulated other comprehensive income into earnings. We account for the changes in the fair value of the unfunded commitment of our U.S. Agency GNMA Construction securities as available for sale securities. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income. We estimate the fair value of our CMBS primarily based on pricing services and broker quotes for the same or similar securities in which it has invested. Different judgments and assumptions could result in materially different estimates of fair value.

When the estimated fair value of an available-for-sale security is less than amortized cost, we will consider whether there is an other-than-temporary impairment in the value of the security. An impairment will be considered other-than-temporary based on consideration of several factors, including if (i) we intend to sell the security, (ii) it is more likely than not that we will be required to sell the security before recovering our cost, or (iii) we do not expect to recover the security’s cost basis (i.e., credit loss). A credit loss will have occurred if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis. If we intend to sell an impaired debt security or it is more likely than not that we will be required to sell the security before recovery of our amortized cost basis less any current period credit loss, the impairment is other-than-temporary and will be recognized currently in earnings equal to the entire difference between fair value and amortized cost. If a credit loss exists, but we do not intend to, nor is it more likely than not that we will be required to, sell before recovery, the impairment is other-than-temporary and will be separated into (i) the estimated amount relating to the credit loss, and (ii) the amount relating to all other factors. Only the estimated credit loss amount is recognized currently in earnings, with the remainder of the loss recognized in other comprehensive income. Estimating cash flows and determining whether there is other-than-temporary impairment require management to exercise judgment and make significant assumptions, including, but not limited to, assumptions regarding estimated prepayments, loss assumptions, and assumptions regarding changes in interest rates. As a result, actual impairment losses, and the timing of income recognized on these securities, could differ from reported amounts.

Mortgage Loan Receivables Held for Sale

Loans that we intend to sell, subsequent to origination or acquisition, are classified as mortgage loan receivables held for sale, net of any applicable allowance for credit loss. Mortgage loans classified as held for sale are generally subject to a specific marketing strategy or a plan of sale.

Loans held for sale are accounted for at the lower of cost or fair value on an individual basis. Loan origination fee income and direct loan origination costs are deferred until the related loans are sold.

Mortgage Loan Receivables Held for Investment

Loans that we have the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding principal balances net of any unearned income, unamortized deferred fees or costs, premiums or discounts and an allowance for loan losses. Loan origination fee income and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, adjusted for actual prepayments.

114

We evaluate each loan classified as mortgage loan receivables held for investment for impairment at least quarterly. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loans contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.

Loans are typically collateralized by real estate. As a result, 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. 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 impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data.

Real Estate

Real estate is carried at historical cost less accumulated depreciation. Costs directly related to acquisitions deemed to be business combinations are expensed. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Real estate is depreciated using the straight-line method over the estimated useful lives of the assets which range from twelve to forty-nine years.

Operating real estate assets are stated at cost and consist of land, buildings and improvements, including other costs incurred during their possession, renovation and acquisition. A property acquired not subject to an existing lease is treated as the acquisition of an asset, recorded at its purchase price, allocated between land and building based upon their fair values at the date of acquisition, with acquisition costs capitalized to the basis of the asset acquired. A property acquired with an existing lease is accounted for as a business combination.

The Company allocates the cost of a real estate acquisition that is a business, including the assumption of liabilities, to tangible assets such as land, buildings and improvements and intangible assets and liabilities for in-place leases, above- and below-market leases, and tenant relationships, based on their estimated fair values. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant. Above- and below-market and in-place lease values are recorded based on the present value (using a discount rate which reflect s the risks associated with the leases acquired) of the difference between the contractual amounts to be received and management’s estimate of market lease rates, measured over the non-cancelable terms of the respective leases, plus any extended term for leases with below-market renewal options when these renewals are expected to be exercised. Other intangible assets for in-place leases include estimates of carrying costs, such as real estate taxes, insurance, other operating expenses and lost rental revenue during the hypothetical expected lease-up periods based on the evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.

Real estate is primarily leased to others on a net lease basis whereby the tenant is generally responsible for all operating expenses relating to the property, including property taxes,

115

insurance, maintenance, repairs, renewals and improvements. These leases are for fixed terms of varying length and provide for annual rentals. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in other assets in the consolidated balance sheets.

As of March 31, 2013, we owned 408 residential condominium units at Veer Towers in Las Vegas with a book value of $114.7 million through a joint venture with an operating partner. The units were 66% rented and occupied as of March 31, 2013. In addition, as of March 31, 2013, we owned a 13 story office building with a book value of $18.0 million through a joint venture with an operating partner.

Investments in Equity Method Investee

A non-controlling interest in a partnership deemed to exert significant influence over the affairs of the partnership follows the equity method of accounting where the investment is increased each period for additional capital contributions and a proportionate share of the entity’s earnings and decreased for cash distributions and a proportionate share of the entity’s losses.

Valuation of Financial Instruments

Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, fair values are not necessarily indicative of the amounts we could realize upon disposition of the financial instruments. Financial instruments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of pricing observability and will therefore require a lesser degree of judgment to be utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and will require a higher degree of judgment in measuring fair value. Pricing observability is generally affected by such items as the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP (FASB—Accounting Standards Codification Topic 820), the methodologies used for valuing financial instruments have been categorized into three broad levels as follows:

Level 1—Quoted prices in active markets for identical instruments.

Level 2—Valuations based principally on other observable market parameters, including:

• quoted prices in active markets for similar instruments,

• quoted prices in less active or inactive markets for identical or similar instruments,

• other observable inputs (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates), and

• market corroborated inputs (derived principally from or corroborated by observable market data).

Level 3—Valuations based significantly on unobservable inputs, including:

• valuations based on third-party indications (broker quotes, counterparty quotes or pricing services) which were, in turn, based significantly on unobservable inputs or were otherwise not supportable as Level 2 valuations, and

116

• valuations based on internal models with significant unobservable inputs.

Pursuant to the authoritative guidance, these levels form a hierarchy. We follow this hierarchy for our financial instruments measured at fair value on a recurring basis. The classifications are based on the lowest level of input that is significant to the fair value measurement.

A summary of the categorization of our financial assets and liabilities can be found in Note 8 of the consolidated annual financial statements included elsewhere in this prospectus.

Tuebor/Federal Home Loan Bank Membership

Tuebor, a wholly owned subsidiary, was licensed in Michigan and approved to operate as a captive insurance company as well as being approved to become a member of the FHLB, with membership finalized with the purchase of stock in the FHLB on July 11, 2012. That approval allowed Tuebor to purchase capital stock in the FHLB the prerequisite to obtaining financing on eligible collateral.

Deferred Financing Costs

Fees and expenses incurred in connection with financing transactions are capitalized within other assets in the consolidated balance sheets and amortized over the term of the financing by applying the effective interest rate method and the amortization is reflected in interest expense.

Derivative Instruments

In the normal course of business, we are exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. To address exposure to interest rates, we use derivatives primarily to economically hedge the fair value variability of fixed rate assets caused by interest rate fluctuations. We may use a variety of derivative instruments that are considered conventional, or “plain vanilla” derivatives, including interest rate swaps, futures, caps, collars and floors, to manage interest rate risk.

To determine the fair value of derivative instruments, we use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, and termination cost may be used to determine fair value. All such methods of measuring fair value for derivative instruments result in an estimate of fair value, and such value may never actually be realized.

We recognize all derivatives on the consolidated balance sheets at fair value. We do not generally designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, these derivatives have been recognized currently in net result from derivative transactions in the accompanying consolidated statements of income.

Fee Expense

Fee expense is comprised primarily of closing fees paid related to purchases of real estate and management fees earned. In addition, the Company entered into a loan referral agreement with Meridian Capital Group LLC, as disclosed in Note 11 to the financial statements included in this prospectus. The agreement provides for the payment of referral fees for loans originated pursuant to a formula based on the Company’s net profit, as defined in the agreement, payable annually in arrears. While the arrangement gives rise to a potential conflict of interest, full disclosure is given and the borrower waives the conflict in writing.

117

Income Taxes

LCFH is a limited liability limited partnership which elected to be treated as a partnership for U.S. income tax purposes. Therefore, LCFH is generally not subject to U.S. federal and state income taxes; however, certain of our income is subject to the New York Unincorporated Business Tax. Following this offering, income and losses pass through to the unitholders of LCFH, including Ladder Capital Corp. As a result, following this offering, Ladder Capital Corp will be subject to U.S. federal and state income taxes on its proportional share of income and losses of LCFH.

Our consolidated REIT subsidiary has operated in a manner consistent with and has elected to be treated as a real estate investment trust under the Code. To qualify as a REIT, the subsidiary is required to pay dividends of at least 90% of its ordinary taxable income each year as well as meet certain other criteria related to its investments. As a REIT, the subsidiary is subject to corporate taxes, however it is allowed a deduction for the amount of dividends paid to its stockholders/members and only pays taxes on undistributed profits. Accordingly, since the subsidiary expects to continue to make distributions in excess of taxable income, no corporate-level current or deferred taxes are provided for by it or in these consolidated financial statements.

We determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement which could result in us recording a tax liability that would reduce our partners’ capital.

Our policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as a component of general and administrative expense on our statements of operations. As of December 31, 2012, 2011 and 2010, we did not have any interest or penalties associated with the underpayment of any income taxes. 2010-2012 tax years remain open and subject to examination by tax jurisdictions.

Revenue Recognition

Interest income is accrued based on the outstanding principal amount and contractual terms of our loans and securities. Discounts or premiums associated with the purchase of loans and investment securities are amortized or accreted into interest income as a yield adjustment on the effective interest method, based on expected cash flows through the expected maturity date of the investment. On at least a quarterly basis, we review and, if appropriate, make adjustments to our cash flow projections. We have historically collected, and expect to continue to collect, all contractual amounts due on our loans and CMBS. As a result, we do not adjust the projected cash flows to reflect anticipated credit losses for these types of investments. If the performance of a credit deteriorated security is more favorable than forecasted, we will generally accrete more credit discount into interest income than initially or previously expected. These adjustments are made prospectively beginning in the period subsequent to the determination that a favorable change in performance is projected. Conversely, if the performance of a credit deteriorated security is less favorable than forecasted, an other-than-temporary impairment may be taken, and the amount of discount accreted into income will generally be less than previously expected.

The effective yield on these securities is based on the projected cash flows from each security, which is estimated based on the Company’s observation of the then current information and events and will include assumptions related to interest rates, prepayment rates and the timing and amount of credit losses. On at least a quarterly basis, the Company reviews and, if appropriate,

118

makes adjustments to its cash flow projections based on input and analysis received from external sources, internal models, and its judgment about interest rates, prepayment rates, the timing and amount of credit losses (if applicable), and other factors. Changes in cash flows from those originally projected, or from those estimated at the last evaluation, may result in a prospective change in the yield/interest income recognized on such securities. Actual maturities of the securities are affected by the contractual lives of the associated mortgage collateral, periodic payments of scheduled principal, and repayments of principal. Therefore, actual maturities of the securities will generally be shorter than stated contractual maturities.

For loans that we have not elected to record at fair value under FASB ASC 825 and are classified as held for investment, origination fees and direct loan origination costs are also recognized in interest income over the loan term as a yield adjustment using the effective interest method. For loans classified as held for sale and that we have not elected to record at fair value under FASB ASC 825, origination fees and direct loan origination costs are deferred reducing the basis of the loan and are realized as a portion of the gain/(loss) on sale of loans when sold.

Stock Based Compensation Plan

We account for our equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant, and generally are time based awards. For time-based awards we recognize compensation expense over the substantive vesting period, on a straight-line basis.

Recently Issued and Adopted Accounting Pronouncements

In December 2011, the FASB released ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires companies to provide new disclosures about offsetting and related arrangements for financial instruments and derivatives. The provisions of ASU 2011-11 are effective for reporting periods beginning on or after January 1, 2013, and are required to be applied retrospectively. The adoption of ASU 2011-11 did not have a material impact on the Company’ s consolidated financial condition or results of operations, but did impact financial statement disclosures.

In February 2013, the FASB released ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”), ASU 2013-01 limits the scope of the new balance sheet offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. The adoption of this standard effective January 1, 2013 did not have a material impact on the Company’s consolidated financial condition or results of operations, but did impact financial statement disclosures.

In February 2013, the FASB released ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 enhances the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 sets requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires companies to present reclassifications by component when reporting changes in AOCI balances. The adoption of this standard effective January 1, 2013 did not have a material impact on the Company’s consolidated financial condition or results of operations, but did impact financial statement disclosures.

119

Reconciliation of Non-GAAP Financial Measures

We present adjusted net income, which is a non-GAAP measure, as a supplemental measure of our performance. We define adjusted net income as net income attributable to preferred and common unit holders adjusted to add back real estate depreciation, eliminate the impact of derivative gains and losses related to the hedging of assets on our balance sheet as of the end of the specified accounting period and add back non-cash stock-based compensation. As more fully discussed in Note 2 to the audited consolidated financial statements included elsewhere in this prospectus, we do not designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, our derivatives are recognized currently in our income statement. However, fluctuations in the fair value of the related assets are not included in our income statement. We believe that excluding these specifically identified gains and losses adjusts for timing differences between when we recognize changes in the fair values of our assets and derivatives which we use to hedge asset values.

Set forth below is an unaudited reconciliation of adjusted net income to net income attributable to preferred and common unit holders:

	For the Three months Ended March 31,						For the Year Ended December 31,
	2013			2012			2012			2011		2010
	($ in thousands)
Net income attributable to preferred and common unit holders	$	90,308		$	54,587		$	178,104		$	70,125	$	88,498
Real estate depreciation and amortization(1)		2,987			214			3,093			703		263
Adjustments for unrecognized derivative results(2)		(1,672	)		(4,511	)		(8,662	)		31,961		2,452
Non-cash stock-based compensation		475			38			2,408			151		174
Adjusted net income	$	92,098		$	50,328		$	174,943		$	102,940	$	91,387

		Three months Ended March 31,					For the Years Ended December 31,
		2013		2012			2012			2011			2010
		($ in thousands)
(1)	Depreciation—real estate	$	2,987	$	214		$	3,093		$	704		$	263
	Depreciation—fixed assets		137		137			548			340			145
	Depreciation	$	3,124	$	351		$	3,641		$	1,044		$	408
(2)	Net results from derivative transactions on closed/sold hedged asset positions (recognized for adjusted net income)	$	598	$	(6,918	)	$	(44,313	)	$	(49,413	)	$	(18,295	)
	Net results from derivative transactions on open/outstanding positions (not recognized for adjusted net income)		1,672		4,511			8,662			(31,961	)		(2,452	)
	Net results from derivative transactions	$	2,270	$	(2,407	)	$	(35,651	)	$	(81,374	)	$	(20,747	)

We present adjusted net income because we believe it assists investors in comparing our performance across reporting periods on a consistent basis by excluding non-cash expenses as well as an item that makes such comparisons less relevant due to timing differences related to changes

120

in the values of assets and derivatives. In addition, we use adjusted net income: (i) to evaluate our earnings from operations and (ii) because management believes that it may be a useful performance measure for us.

Adjusted net income has limitations as an analytical tool. Some of these limitations are:

• adjusted net income does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

• other companies in our industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted net income should not be considered in isolation or as a substitute for net income attributable to preferred and common unit holders or other performance measures calculated in accordance with GAAP.

In the future we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of adjusted net income should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk that a change in the level of one or more market prices, rates, indices, implied volatilities, correlations or other market factors will result in a financial loss. The primary market risks that we face are interest rate risk, market value risk, liquidity risk, credit risk, credit spread risk, and risks related to real estate.

Interest Rate Risk

The nature of our business exposes us to market risk arising from changes in interest rates. Changes, both increases and decreases, in the rates we are able to charge our borrowers, the yields we are able to achieve in our securities investments, and our cost of borrowing directly impact our net income. Our interest income stream from loans and securities is generally fixed over the life of our assets, whereas we use floating-rate debt to finance a significant portion of our investments. Another component of interest rate risk is the effect changes in interest rates will have on the market value of the assets we acquire. We face the risk that the market value of our assets will increase or decrease at different rates than that of our liabilities, including our hedging instruments. We mitigate interest rate risk through utilization of hedging instruments, primarily interest rate swap and futures agreements. Interest rate swap and futures agreements are utilized to hedge against future interest rate increases on our borrowings and potential adverse changes in the value of certain assets that result from interest rate changes. We generally seek to hedge assets that have a duration longer than two years, including newly originated conduit first mortgage loans, securities in our CMBS portfolio if long enough in duration, and most of our U.S. Agency Securities portfolio.

121

The following table summarizes the change in net income for a 12-month period commencing March 31, 2013 and the change in fair value of our investments and indebtedness assuming an increase or decrease of 100 basis points in the LIBOR interest rate on March 31, 2013, both adjusted for the effects of our interest rate hedging activities:

	Projected  change in net income			Projected  change in portfolio value
	($ in thousands)
Change in interest rate:
Decrease by 1.00%	$	(4,265	)	$	19,459
Increase by 1.00%		4,784			(19,438	)

Market Value Risk

Our securities investments are reflected at their estimated fair value. The change in estimated fair value of securities available-for-sale is reflected in accumulated other comprehensive income. The estimated fair value of these securities fluctuates primarily due to changes in interest rates and other factors. Generally, in a rising interest rate environment, the estimated fair value of these securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of these securities would be expected to increase. As market volatility increases or liquidity decreases, the market value of our assets may be adversely impacted. Our fixed rate mortgage loan portfolio is subject to the same risks. However, to the extent those loans are classified as held for sale, they are reflected at the lower of cost or market. Otherwise, held for investment mortgage loans are reflected at values equal to the unpaid principal balances net of certain fees, costs and loan loss allowances.

Liquidity Risk

Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which we invest, and may at the same time lead to a significant contraction in short term and long term debt and equity funding sources. A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell our investments or determine their fair values. As a result, we may be unable to sell our investments, or only able to sell our investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that our borrowing arrangements or other arrangements for obtaining leverage will continue to be available, or if available, will be available on terms and conditions acceptable to us. In addition, a decline in market value of our assets may have particular adverse consequences in instances where we borrowed money based on the fair value of our assets. A decrease in the market value of our assets may result in the lender requiring us to post additional collateral or otherwise sell assets at a time when it may not be in our best interest to do so. Finally, our captive insurance company subsidiary is subject to state regulations which require that dividends may only be made with regulatory approval.

Credit Risk

We are subject to varying degrees of credit risk in connection with our investments. We seek to manage credit risk by performing deep credit fundamental analysis of potential assets and through ongoing asset management. Our investment guidelines do not limit the amount of our equity that may be invested in any type of our assets, however, investments greater than a certain size are subject to review of the Risk and Underwriting Committee of our Board of Directors.

122

Credit Spread Risk

Credit spread risk is the risk that interest rate spreads between two different financial instruments will change. In general, fixed-rate commercial mortgages and CMBS are priced based on a spread to Treasury swaps. We generally benefit if credit spreads narrow during the time that we hold a portfolio of mortgage loans or CMBS investments, and we may experience losses if credit spreads widen during the time that we hold a portfolio of mortgage loans or CMBS investments. We actively monitor our exposure to changes in credit spreads and we may enter into credit total return swaps or take positions in other credit related derivative instruments to moderate our exposure against losses associated with a widening of credit spreads.

Risks Related to Real Estate

Real estate and real estate-related 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 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, which could also cause us to suffer losses.

123

BUSINESS

Overview

We are a leading commercial real estate finance company with a proprietary loan origination platform and an established national footprint. As a non-bank operating company, we believe that we are well-positioned to benefit from the opportunities arising from the diminished supply of commercial real estate debt capital and the substantial demand for new financings in the sector. We believe our comprehensive, fully-integrated in-house infrastructure, access to a diverse array of committed financing sources and highly experienced management team of industry veterans will allow us to continue to prudently grow our business as we endeavor to capitalize on profitable opportunities in various market conditions.

We conduct our business through three major business lines: commercial mortgage lending, investments in securities secured by first mortgage loans, and investments in selected net leased and other commercial real estate assets. We have historically been able to generate attractive risk-adjusted returns by flexibly allocating capital among these well-established, complementary business lines. We believe that we have a competitive advantage through our ability to offer a wide range of products, providing complete solutions across the capital structure to our borrowers. We apply a comprehensive best practices underwriting approach to every loan and investment that we make, rooted in management’s deep understanding of fundamental real estate values and proven expertise in these complementary business lines through multiple economic and credit cycles.

Our primary business strategy is originating conduit first mortgage loans on stabilized, income producing commercial real estate properties that can be securitized. From our inception in October 2008 through March 31, 2013, we originated $5.8 billion of commercial real estate loans, $3.7 billion of which were sold into 13 securitizations, making us, by volume, the second largest non-bank contributor of loans to CMBS securitizations in the United States for that period according to Commercial Mortgage Alert. The securitization of conduit loans has been a consistently profitable business for us and enables us to reinvest our equity capital into new loan originations or allocate it to other investments. In addition to conduit loans, we originated $1.0 billion of balance sheet loans held for investment from inception through March 31, 2013. During that timeframe, we also acquired $4.6 billion of investment grade-rated securities secured by first mortgage loans on commercial real estate and $519.1 million of selected net leased and other commercial real estate assets. These balance sheet business lines provide for a stable base of net interest and rental income and are complementary to our conduit lending activities. As of March 31, 2013, we had $2.5 billion in total assets and $1.2 billion in total book equity. We generated $213.8 million of net income for the twelve months ended March 31, 2013, resulting in a return on average equity of 19.7%, as further described in “Summary Financial and Other Data.”

We seek to operate an adaptable and sustainable business model by retaining and reinvesting earnings in complementary commercial real estate investments. We are structured as a C-Corp to allow us to reinvest our equity capital, which we believe enhances our overall growth prospects and return on equity and facilitates our securitization business.

We are led by a disciplined and highly aligned management team, the core of which has worked together for more than a decade. As of March 31, 2013, our management team and chairman held equity capital accounts in our company comprising $88.9 million of book equity, or 7.7% of our total book equity. On average, our management team members have 25 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer;

124

Michael Mazzei, President; Greta Guggenheim, Chief Investment Officer; Pamela McCormack, General Counsel and Co-Head of Securitization; Marc Fox, Chief Financial Officer; Thomas Harney, Head of Merchant Banking & Capital Markets; and Robert Perelman, Head of Asset Management.

Ladder was founded in October 2008 and we are currently capitalized by our management team and a group of leading global institutional investors, including affiliates of Alberta Investment Management Corp., GI International Partners, L.P., Ontario Municipal Employees Retirement System and TowerBrook Capital Partners. We have built our operating business to include 58 full-time industry professionals by hiring experienced personnel known to us in the commercial mortgage industry. Doing so has allowed us to maintain consistency in our culture and operations and to focus on strong credit practices and disciplined growth.

We have a diversified and flexible financing strategy supporting our business operations, including significant committed term financing from leading financial institutions. As of March 31, 2013, we had $1.3 billion of debt financing outstanding, including $209.2 million of committed secured term financing (with an additional $1.5 billion of committed secured term financing available to us), $423.0 million of financing from the Federal Home Loan Bank (FHLB) (with an additional $577.0 million of committed term financing available to us from the FHLB), $154.0 million of third party, non-recourse mortgage debt, $203.0 million of other securities financing and $325.0 million of Notes. As of March 31, 2013 our debt-to-equity ratio was 1.1:1.0 as we employ leverage prudently to maximize financial flexibility.

Our Market Opportunity

Commercial real estate is a capital-intensive business that relies heavily on debt capital to develop, acquire, maintain and refinance commercial properties. We believe that demand for commercial real estate debt financing, together with a reduction in the supply of traditional bank financing, presents compelling opportunities to generate attractive returns for an established, well-financed, non-bank lender like our firm.

There were $3.1 trillion of commercial mortgage loans outstanding in the United States as of March 31, 2013. The commercial real estate market faces significant near-term debt maturities, with $1.7 trillion of commercial and multifamily real estate debt scheduled to mature from 2013 through 2017. The following chart shows commercial real estate debt maturities as of December 31, 2012:

Source: Trepp LLC

125

Improving commercial property values as well as a growing CMBS market have contributed to a more positive environment for commercial real estate assets over the last several years and created a substantial opportunity for new loan origination. New issuances in the CMBS market expanded from $11.6 billion in 2010 to $48.4 billion in 2012. In the first quarter of 2013, this growth trend showed signs of accelerating as $22.9 billion of new CMBS were issued, but is still a fraction of historical issuance levels. The following chart shows historical CMBS issuance from 1995 through the first quarter of 2013:

Source: Commercial Mortgage Alert

Additionally, many traditional commercial real estate lenders that have historically competed for loans within our target market are facing tighter capital constraints due to changes in banking regulations. Given this confluence of market dynamics, we believe that we are well positioned to capitalize and profit from these industry trends.

Our Business and Growth Strategies

We have steadily built our business to capitalize on opportunities in the commercial real estate finance market, generating profitable growth while creating the diversified, national lending and investment platform we have today. We intend to utilize the net proceeds of this offering and the earnings we retain to expand our business by focusing on the following strategies:

• Increasing the volume and frequency of our conduit loan securitizations.    Our primary business strategy is to originate conduit loans for sale into CMBS securitizations. We expect to be able to increase the volume and frequency of our conduit loan securitizations as a result of the growth in new CMBS issuance driven by favorable supply and demand dynamics. We believe we are well-positioned to continue to increase our market share of new U.S. CMBS issuance, which grew from 2.8% in 2010 to 3.1% in 2011, 3.3% in 2012, and 3.5% in the first quarter of 2013, while maintaining our high credit standards and pricing discipline.

126

• Originating more loans and increasing the average size of the loans we originate.    We expect our lending business to continue to grow as we build larger and more diverse portfolios of conduit loans for securitization, originate selected large loans for single-asset securitizations and originate additional, larger balance sheet loans held for investment. Our origination of balance sheet loans held for investment will support the growth of our conduit lending business in the future as the properties that secure these loans become eligible for longer-term conduit financing from us upon maturity. We believe that we have a competitive advantage through our ability to offer this wide range of products.

• Expanding investments in selected net leased and other commercial real estate equity.    We expect to grow our net leased and other real estate investment business through direct investments as well as investments in real estate partnerships with experienced managers and co-investors. Our net leased strategy is generally to purchase real estate, originate a non-recourse conduit loan secured by that real estate and subsequently securitize that loan. This strategy has enabled us to realize an attractive levered return on our net leased real estate investments while garnering a control position in the underlying properties. In addition, as we grow our balance sheet loan portfolio, we expect to make loans with equity-linked participations to capture a portion of any appreciation in the value of such properties.

• Pursuing other attractive opportunities.    We expect to pursue other complementary growth opportunities as they arise. Such opportunities may include growing our third party asset management business as well as opportunistic acquisitions of third party commercial real estate finance-related businesses or assets that we view as synergistic with our current operations.

Our Competitive Strengths

Our competitive strengths include:

• Recognized national lending franchise.    Ladder is a recognized and well-regarded brand name in the U.S. commercial real estate lending market. From inception through March 31, 2013, we originated $5.8 billion of commercial real estate loans, $3.7 billion of which were sold into 13 CMBS securitizations, making us the second largest non-bank contributor by volume to CMBS securitizations in the United States for that period, according to Commercial Mortgage Alert. We have partnered in CMBS securitizations as a loan seller and co-manager with prominent commercial real estate platforms, including affiliates of Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC. We believe our reputation as an established lender helps us access new borrowers in our origination business, and makes us an attractive partner to investors in the CMBS market as well as our lenders and securitization partners.

• Established, fully-integrated commercial real estate finance platform.    Since our inception, we have operated an internally managed and vertically integrated commercial mortgage origination platform. Our staff of 58 full-time industry professionals specializing in loan origination, underwriting, structuring, securitization, trading, financing and asset management allows us to manage and control the loan process from origination through closing and, when appropriate, sale or other disposition. In an industry characterized by high barriers to entry, including requisite relationships with borrowers, mortgage brokers, securitization partners, investors (including CMBS investors), and financing sources, we are a well-established operating business with a comprehensive in-house infrastructure.

127

• Complementary, diverse business lines.    We apply our knowledge of commercial real estate across the commercial real estate investing spectrum, including to whole loans, securities and real estate equity. We believe our ability to offer borrowers a diverse range of financing products, including interim balance sheet loans, gives us a competitive advantage compared to certain of our competitors who focus more exclusively on conduit loans. In addition, our robust and diversified investment platform provides us with the ability to capture relative value opportunities among the various products in different market environments. It affords us market presence and insight, as well as the ability to flexibly allocate our capital among our business lines to hedge risk and achieve attractive risk-adjusted returns.

• Strong credit culture, experienced management team and alignment of interests.    We conduct a comprehensive credit and underwriting review prior to closing any transaction and we have not had an event of default declared or credit loss on the loans and investments we have made since our inception. Our focus on strong credit practices is supported and monitored by our experienced management team, who together with our chairman, held equity capital accounts in our company comprising $88.9 million of book equity value, representing 7.7% of book equity capital, as of March 31, 2013. Our credit culture is further reinforced by the alignment of our loan origination team, whose members are compensated based on loan profitability and performance and not on volume.

• Operating flexibility resulting from our corporate structure and moderate leverage.    Our corporate structure facilitates our securitization business and allows us to retain and reinvest earnings. In addition, our access to diverse, long term and low-cost financing, particularly via our FHLB membership, is a mark of distinction compared to our non-bank competitors, allowing us to better match the characteristics of our funding liabilities with those of our investment assets at an attractive cost of funds. We also deploy leverage conservatively. As of March 31, 2013, our debt-to-equity ratio was 1.1:1.0, and we had $1.5 billion of committed, undrawn funding capacity available to finance our business and $748.6 million in unencumbered assets.

128

Our Business Segments

We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets. Our mix of business segments is designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following table summarizes the value of our investment portfolio as reported in our consolidated financial statements as of the dates indicated below:

	As of March 31, 2013		As of December 31,
			2012		2011		2010
	($ in thousands)
Loans
Conduit first mortgage loans	$	610,898	$	623,333	$	258,842	$	353,946
Balance sheet first mortgage loans		196,801		229,926		229,378		149,104
Other commercial real estate-related loans		96,407		96,392		25,819		6,754
Total loans	$	904,106	$	949,651	$	514,039	$	509,804
Securities
CMBS investments		764,748		833,916		1,664,001		1,736,043
U.S. Agency Securities investments		292,595		291,646		281,069		189,467
Total securities	$	1,057,343	$	1,125,562	$	1,945,070	$	1,925,510
Real Estate
Total real estate, net		395,678		380,022		28,835		25,669
Total investments	$	2,357,127	$	2,455,235	$	2,487,944	$	2,460,983
Cash, cash equivalents and cash collateral held by broker		123,604		109,169		138,630		105,138
Other assets		60,763		64,626		27,815		21,667
Total assets	$	2,541,494	$	2,629,030	$	2,654,389	$	2,587,788

Loans

Conduit First Mortgage Loans.    We originate conduit first mortgage loans that are secured by income-producing commercial real estate. These first mortgage loans are typically structured with fixed interest rates and five- to ten-year terms. Our loans are directly originated by an internal team that has longstanding and strong relationships with borrowers and mortgage brokers throughout the United States. We follow a rigorous investment process, which begins with an initial due diligence review; continues through a comprehensive legal and underwriting process incorporating multiple internal and external checks and balances; and culminates in approval or disapproval of each prospective investment by our Investment Committee. Conduit first mortgage loans in excess of $50.0 million also require approval of our Board of Directors’ Risk and Underwriting Committee.

Although our primary intent is to sell our conduit first mortgage loans into CMBS securitization trusts, we generally seek to maintain the flexibility to keep them on our balance sheet, offer them for sale to CMBS trusts as part of a securitization process or otherwise sell them as whole loans to third-party institutional investors. From our inception in 2008 through March 31, 2013, we originated and funded $4.8 billion of conduit first mortgage loans, and securitized $3.7 billion of such mortgage loans in 13 separate transactions, including two securitizations in 2010, three securitizations in 2011, six securitizations in 2012 and two

129

securitizations in the three months ended March 31, 2013. We generally securitize our loans together with certain financial institutions, which to date have included affiliates of Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC, and we have also completed a single-asset securitization. During 2012 and the first quarter of 2013, conduit first mortgage loans have remained on our balance sheet for a weighted average of 78 and 51 days prior to securitization, respectively. As of March 31, 2013, we held 38 first mortgage loans that were substantially available to be offered for sale into a securitization with an aggregate book value of $610.9 million. Based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 63.7% at March 31, 2013.

Balance Sheet First Mortgage Loans.    We also originate and invest in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, renovation or repositioning. These mortgage loans are structured to fit the needs and business plans of the borrowers, and generally have floating rates and terms (including extension options) ranging from one to three years. Balance sheet first mortgage loans are originated, underwritten, approved and funded using the same comprehensive legal and underwriting approach, process and personnel used to originate our conduit first mortgage loans. Balance sheet first mortgage loans in excess of $20.0 million also require the approval of our Board of Directors’ Risk and Underwriting Committee.

We generally seek to hold our balance sheet first mortgage loans for investment, or offer them for sale to our institutional bridge loan partnership. From inception through March 31, 2013, we originated and funded $966.5 million of balance sheet first mortgage loans. These investments have been typically repaid at or prior to maturity (including by being refinanced by us into a new conduit first mortgage loan upon property stabilization) or sold to our institutional bridge loan partnership. As of March 31, 2013, we held a portfolio of eight balance sheet first mortgage loans with an aggregate book value of $196.8 million. Based on the loan balances and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 58.9% at March 31, 2013.

Other commercial real estate-related loans.    We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate. As of March 31, 2013, we held $96.4 million of other commercial real estate-related loans. Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 78.2%.

Securities

CMBS Investments.    We invest in CMBS secured by first mortgage loans on commercial real estate, and own predominantly short-duration, AAA-rated securities. These investments provide a stable and attractive base of net interest income and help us manage our liquidity. We have significant in-house expertise in the evaluation and trading of CMBS, due in part to our experience in originating and underwriting mortgage loans that comprise assets within CMBS trusts, as well as our experience in structuring CMBS transactions. CMBS investments in excess of $26 million require the approval of our Board of Directors’ Risk and Underwriting Committee. As of March 31, 2013, the estimated fair value of our portfolio of CMBS investments totaled $764.7 million in 85 CUSIPs ($9.0 million average investment per CUSIP). As of that date, the portfolio was comprised of 62.2% AAA-rated securities, and 37.8% of other investment grade-rated securities, and had a weighted average duration of 2.0 years.

130

U.S. Agency Securities Investments.    Our U.S. Agency Securities portfolio consists of securities for which the principal and interest payments are guaranteed by a U.S. government agency, such as the Government National Mortgage Association (“Ginnie Mae”), or by a GSE, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). As of March 31, 2013, the estimated fair value of our portfolio of U.S. Agency Securities was $292.6 million in 61 CUSIPs ($4.8 million average investment per CUSIP), with a weighted average duration of 3.5 years.

Real estate

Commercial real estate properties.    As of March 31, 2013, we owned 34 single tenant retail properties with an aggregate book value of $263.8 million. These properties are leased on a net basis where the tenant is generally responsible for payment of real estate taxes, building insurance and maintenance expenses. Sixteen of our properties are leased to a national pharmacy chain, and the remaining properties are leased to a national discount retailer, a regional sporting goods store, and a regional membership warehouse club. As of March 31, 2013, our net leased properties comprised a total of 1.3 million square feet, had a 100% occupancy rate, had an average age since construction of 7 years and a weighted average remaining lease term of 19.5 years. In addition, as of March 31, 2013, we owned a 13 story office building with a book value of $18.0 million through a joint venture with an operating partner.

Residential real estate.    As of March 31, 2013, we owned 408 residential condominium units at Veer Towers in Las Vegas with a book value of $114.7 million through a joint venture with an operating partner. As of March 31, 2013, the units were 66% rented and occupied. We sold 19 units during the three months ended March 31, 2013, generating aggregate gains on sale of $3.4 million, and we intend to sell the remaining units over time.

Other Investments

Institutional bridge loan partnership.    In 2011, we established an institutional partnership with a major pension fund to invest in first mortgage bridge loans that meet pre-defined criteria. Our partner owns 90% of the equity and we own the remaining 10% on a pari passu basis. Our partner retains the discretion to accept or reject individual loans and following the expiration of an exclusivity period, we retain discretion on which loans to present to the partnership. As the general partner, we earn management fees and incentive fees from the partnership. In addition, we are entitled to retain origination fees of up to 1% on loans that we sell to the partnership. As of March 31, 2013, the partnership owned $237.5 million of first mortgage bridge loan assets that were financed by $113.6 million of term debt. Debt of the partnership is nonrecourse to the limited and general partners, except for customary nonrecourse carve-outs for certain actions and environmental liability. As of March 31, 2013, the book value of our investment in the institutional partnership was $13.4 million.

Other asset management activities.    As of March 31, 2013, we also managed three separate CMBS investment accounts for private investors with combined total assets of $9.1 million. Although, as of October 2012, we are no longer purchasing any new investments for these accounts, we will continue to manage the existing investments until their full prepayment or other disposition.

131

Our Current Financing Strategies

Our financing strategies are critical to the success and growth of our business. We manage our financing to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties.

We fund our investments in commercial real estate loans and securities through multiple sources, including the $611.6 million of gross cash proceeds we raised in our initial equity private placement beginning in October 2008, the $257.4 million of gross cash proceeds we raised in our follow-on equity private placement in the third quarter of 2011, current and future earnings and cash flow from operations, existing debt facilities, and other borrowing programs in which we participate, including as a member of the FHLB.

We finance our portfolio of first mortgage loans using committed term facilities provided by multiple financial institutions, with total commitments of $1.2 billion at March 31, 2013, and through our FHLB membership. As of March 31, 2013, $81.9 million of debt was outstanding under the term facilities. We finance our securities portfolio, including CMBS and U.S. Agency Securities, through our FHLB membership, a $600.0 million credit facility from a leading domestic financial institution and other financing arrangements with numerous counterparties. As of March 31, 2013, we had total outstanding balances of $330.3 million under these facilities excluding FHLB debt. We finance our real estate investments with nonrecourse first mortgage loans. As of March 31, 2013, we had outstanding balances of $154.0 million on these nonrecourse mortgage loans. In addition to the amounts outstanding on our other facilities, we had $423.0 million of borrowings from the FHLB outstanding at March 31, 2013. We also had $325.0 million of Notes issued and outstanding as of March 31, 2013. See Note 7 to our consolidated financial statements for the three months ended March 31, 2013 included elsewhere in this prospectus for more information about our financing arrangements.

The following table shows our sources of capital, including our financing arrangements, and our investment portfolio as of March 31, 2013:

Sources of Capital	($ in thousands)
Debt:
Repurchase agreements	$	382,161
Borrowings under credit agreement		30,000
Long term financing		153,989
Borrowings from the FHLB		423,000
Senior unsecured notes		325,000
Total debt	$	1,314,150
Other liabilities		68,312
Capital (equity)		1,159,032
Total sources of capital	$	2,541,494

Assets	($ in thousands)
Loans:
Conduit first mortgage loans	$	610,898
Balance sheet first mortgage loans		196,801
Other commercial real estate-related loans		96,407
Total loans	$	904,106
Securities:
CMBS investments		764,748
U.S. Agency Securities investments		292,595
Total securities	$	1,057,343
Real estate:
Total real estate, net		395,678
Total investments	$	2,357,127
Cash, cash equivalents and cash held by broker		123,604
Other assets		60,763
Total assets	$	2,541,494

We enter into interest rate and credit spread derivative contracts to mitigate our exposure to changes in interest rates and credit spreads. We generally seek to hedge assets that have a

132

duration longer than two years, including newly-originated conduit first mortgage loans, securities in our CMBS portfolio if long enough in duration, and most of our U.S. Agency Securities portfolio. We monitor our asset profile and our hedge positions to manage our interest rate and credit spread exposures, and seek to match fund our assets according to the liquidity characteristics and expected holding periods of our assets.

We seek to maintain a debt-to-equity ratio of 3:1 or below. We expect this ratio to fluctuate during the course of a fiscal year due to the normal course of business in our conduit lending operations, in which we generally securitize our inventory of loans at intervals, and also because of changes in our asset mix, due in part to such securitizations. As of March 31, 2013, our debt-to-equity ratio was 1.1:1.0. We believe that our predominantly senior secured assets and our moderate leverage provide financial flexibility to be able to capitalize on attractive market opportunities as they arise.

From time to time, we may add financing counterparties that we believe will complement our business, although the agreements governing our indebtedness may limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness. Our amended and restated charter and by-laws do not impose any threshold limits on our ability to use leverage.

Investment Process

Origination

Our team of originators is responsible for sourcing and directly originating new commercial first mortgage loans from the brokerage community and directly from real estate owners, operators, developers and investors. The extensive industry experience of our management team and origination team have enabled us to build a strong network of mortgage brokers and direct borrowers throughout the commercial real estate community in the United States.

We seek to align our interests and those of our originators by awarding our originators annual discretionary bonuses that are closely correlated with loan performance and realized profits, rather than loan volumes or other metrics.

Credit and Underwriting

Our underwriting and credit process commences upon receipt of a potential borrower’s executed loan application and non-refundable deposit.

Our underwriters conduct a thorough due diligence process for each prospective investment. The team coordinates in-house and third-party due diligence for each prospective loan as part of a checklist-based process that is designed to ensure that each loan receives a systematic evaluation. Elements of the underwriting process generally include:

Cash Flow Analysis.    We create an estimated cash flow analysis and underwriting model for each prospective investment. Creation of the cash flow analysis generally draws on an assessment of current and historical data related to the property’s rent roll, operating expenses, net operating income, leasing cost, and capital expenditures. Underwriting is expected to evaluate and factor in assumptions regarding current market rents, vacancy rates, operating expenses, tenant improvements, leasing commissions, replacement reserves, renewal probabilities and concession packages based on observable conditions in the subject property’s sub-market at the time of underwriting. The cash flow analysis may also rely upon third-party environmental and engineering reports to estimate the cost to repair or remediate any identified environmental and/or property-level deficiencies. The final underwritten cash flow analysis is used to estimate the property’s overall value and its ability to produce cash flow to service the proposed loan.

133

Borrower Analysis.    Careful attention is also paid to the proposed borrower, including an analysis based on available information of its credit history, financial standing, existing portfolio and sponsor exposure to leverage and contingent liabilities, capacity and capability to manage and lease the collateral, depth of organization, knowledge of the local market, and understanding of the proposed product type. We also generally commission and review a third-party background check of our prospective borrower and sponsor.

Site Inspection.    A Ladder underwriter typically conducts a physical site inspection of each property. The site inspection gives the underwriter insights into the local market and the property’s positioning within it, confirms that tenants are in-place, and generally helps to ensure that the property has the characteristics, qualities, and potential value represented by the borrower.

Legal Due Diligence.    Our unique in-house transaction management team comprised of eight attorneys manages, negotiates, structures and closes all transactions and completes legal due diligence on each property, borrower, and sponsor, including the evaluation of documents such as leases, title, title insurance, opinion letters, tenant estoppels, organizational documents, and other agreements and documents related to the property or the loan.

Third-party Appraisal.    We generally commission an appraisal from a Member of the Appraisal Institute to provide an independent opinion of value as well as additional supporting property and market data. Appraisals generally include detailed data on recent property sales, local rents, vacancy rates, supply, absorption, demographics and employment, as well as a detailed projected cash flow and valuation analysis. We typically use the independent appraiser’s valuation to calculate ratios such as loan-to-value and loan-to-stabilized-value ratio, as well as to serve as an independent source to which the in-house cash flow and valuation model can be compared.

Third-party Engineering Report.    We generally engage an approved licensed engineer to complete property condition/engineering reports, and a seismic report for applicable properties. The engineering report is intended to identify any issues with respect to the safety and soundness of a property that may warrant further investigation, and provide estimates of ongoing replacement reserves, overall replacement cost, and the cost to bring a property into good repair.

Third-party Environmental Report.    We also generally engage an approved environmental consulting firm to complete a Phase I Environmental Assessment to identify and evaluate potential environmental issues at the property, and may also order and review Phase II Environmental Assessments and/or Operations & Maintenance plans if applicable. Environmental reports and supporting documentation are typically reviewed in-house as well as by our dedicated outside environmental counsel who prepares a summary report on each property.

Third-party Insurance Review.    A third-party insurance specialist reviews each prospective borrower’s existing insurance program to analyze the specific risk exposure of each property and to ensure that coverage is in compliance with our standard insurance requirements. Our transaction management team oversees this third-party review and makes the conclusions of their analysis available to the underwriting team.

A credit memorandum is prepared to summarize the results of the underwriting and due diligence process for the consideration of the Investment Committee. We thoroughly document the due diligence process up to and including the credit memorandum and maintain an organized digital archive of our work.

134

Transaction Management

The transaction management team is generally responsible for coordinating and managing outside counsel, working directly with originators, underwriters and borrowers to manage, structure, negotiate and close all transactions, including the securitization of our loans. The transaction management team plays an integral role in the legal underwriting of each property, consults with outside counsel on significant business, credit and/or legal issues, and facilitates the funding and closing of all investments and dispositions. The transaction management team also supports asset management and investment realization activities, including coordination of post-closing issues and assistance with loan sales, financings, refinancing and repayments.

Investment Committee Approval

All investments require approval from our Investment Committee, comprised of Brian Harris, CEO; Michael Mazzei, President; Greta Guggenheim, Chief Investment Officer; and Pamela McCormack, General Counsel. The Investment Committee generally requires each investment to be fully described in a comprehensive Investment Committee memorandum that identifies the investment, the due diligence conducted and the findings, as well as all identified related risks and mitigants. The Investment Committee meets regularly to ensure that all investments are fully vetted prior to issuance of Investment Committee approval.

In addition to Investment Committee approval, the Risk and Underwriting Committee of our Board of Directors approves all investments above certain thresholds, which are currently set at $50.0 million for fixed-rate loans and AAA-rated securities, and lower levels for all other types of investments.

Financing

Prior to securitization or other disposition, or in the case of balance sheet loans, maturity, we finance most of the loans we originate using our multiple committed term facilities from leading financial institutions and our membership in the FHLB. Our finance team endeavors to match the characteristics and expected holding periods of the assets being financed with the characteristics of the financing options available and our short and long term cash needs in determining the appropriate financing approaches to be applied. The approaches we apply to financing our assets are a key component of our asset/liability risk management strategy with respect to managing liquidity risk. These approaches, supplemented by the use of hedging primarily via the use of standard derivative instruments, facilitate the prudent management of our interest rate and credit spread exposures.

Asset Management

The asset management team, together with our third-party servicers, monitors the investment portfolio, working closely with borrowers and/or their partners to monitor performance of the assets. Asset management focuses on careful asset specific and market surveillance, active enforcement of loan and security rights, and regular review of potential disposition strategies. Loan modifications, asset recapitalizations and other necessary variations to a borrower’s or partner’s business plan or budget will generally be vetted through the asset management team with a recommended course of action presented to the Investment Committee for approval.

Specific responsibilities of the asset management team include:

• coordinating cash processing and cash management for collections and distributions through lock box accounts that are set up to trap all cash flow from a property;

• monitoring tax and insurance administration to ensure timely payments to appropriate authorities and maintenance or placement of applicable insurance coverages;

135

• assisting with escrow analysis to maintain appropriate balances in required accounts;

• monitoring UCC administration for continued compliance with lien laws in various jurisdictions;

• assisting with reserve and draw management from pre-funded accounts including monitoring draw requests for legitimacy and budget accuracy;

• coordinating and conducting site inspections and surveillance activities including periodic analysis of financial statements;

• reviewing rent rolls and operating statements;

• reviewing available information for any material variances; and

• completing and updating asset summary reviews and providing active portfolio management reporting to ensure that borrowers remain compliant with the terms of their loans and remain on target for established budgets and business plans.

Disposition and Distribution

Our securitization team works with our transaction management and underwriting teams to realize our disposition strategy of selling our conduit first mortgage loans into CMBS securitization trusts. We also maintain the flexibility to keep such loans on our balance sheet or sell them as whole loans to third-party institutional investors. Our asset management team manages the disposition of our balance sheet first mortgage loans for investment by offering them for sale to our institutional bridge loan partnership or other buyers and managing repayments at or prior to maturity. Balance sheet loans that are refinanced by us into a new conduit first mortgage loan upon property stabilization and intended for securitization are re-underwritten and structured by our origination, underwriting and transaction management teams.

Industry Overview

Commercial real estate is a capital-intensive business that uses substantial amounts of debt capital to develop, acquire, maintain, reposition and refinance commercial properties. There were $3.1 trillion of commercial mortgage loans outstanding in the United States as of March 31, 2013. These mortgage loans were predominantly held as investments by banks ($1.5 trillion), securitization trusts ($683 billion), and insurance companies ($322 billion).

Market Outlook

We believe there is currently a compelling market opportunity to invest in commercial real estate finance products, including loans and securities, as a result of the constrained supply of commercial real estate financing coupled with the significant demand for debt capital on newly acquired or refinanced commercial real estate properties.

136

The commercial real estate market faces high near-term debt maturities, in that $1.7 trillion of commercial and multifamily real estate debt is scheduled to mature from 2013 through 2017. The following chart shows commercial real estate debt maturities as of December 31, 2012:

Source: Trepp LLC

At the same time, the flow of capital available to finance commercial real estate has decreased. The following chart illustrates net funds flow to the commercial real estate industry, and highlights the decline in the volume of net lending:

Source: Federal Reserve Flow of Funds report

Traditional commercial real estate lenders, including banks and insurance companies, are currently facing tighter capital constraints and regulatory changes. Among the factors that we believe may continue to limit lending to the sector for traditional financing sources are Basel III, with its provisions for higher bank capital charges on certain types of real estate loans, as well as the Dodd-Frank Act. We believe the current regulatory environment will continue to be most impactful on larger financial institutions, including the 28 institutions identified by the Financial Stability Board as “Global Systemically Important Banks” (“G-SIBs”). In 2012, nine of the top ten contributors of loans to new CMBS securitizations were affiliates of G-SIBs.

In this environment, characterized by a supply-demand imbalance for financing and stabilizing asset values, we believe we are well positioned to originate and invest in attractive investment opportunities in commercial real estate finance.

137

Brief History of the CMBS Market

Securitization trusts and the CMBS they issue have risen in importance as a financing source for the commercial real estate industry. The industry has grown from $40 billion in assets in 1990, representing 3.6% of commercial mortgage loans outstanding at the time, to $683 billion in assets, and representing 22.3% of commercial mortgage loans outstanding as of March 31, 2013. The growth in securitization of commercial mortgage loans is part of a broader trend toward securitization of many different types of debt, including residential mortgage loans, auto loans, student loans, residential loans, and home equity loans. The following chart shows historical annual CMBS issuance from 1995 through the first quarter of 2013:

Source: Commercial Mortgage Alert

From 2002 to 2007, rapidly rising property values and commercial real estate lending volumes were driven by global economic growth, inexpensive, abundant debt and equity capital, and aggressive credit underwriting. Throughout this period, loan origination volume increased substantially with annual U.S. CMBS issuance growing from $52.1 billion in 2002 to $228.6 billion in 2007.

In early 2007, deterioration in the subprime residential mortgage market prompted a re-evaluation of credit standards across all debt markets. The commercial mortgage markets were directly impacted as credit rating agencies adjusted their ratings methodologies for CMBS. This development triggered a dramatic re-pricing of CMBS securities and ultimately resulted in a credit freeze in the debt markets, with a particularly negative impact on CMBS and the broader commercial real estate loan origination markets. CMBS issuance declined to $2.7 billion in 2009 and liquidity in the commercial real estate lending market was scarce.

In early 2010, commonly tracked economic indicators, including GDP, consumer spending, consumer confidence and disposable personal income, began to show signs of improvement. These changes, together with recovering property fundamentals, including decreasing vacancy rates, rent growth, positive absorption, limited new supply and increasing investor demand for commercial real estate, led to an improvement in commercial property values. During this time, several bank lenders reinitiated their CMBS lending programs, and several new lenders entered the business.

138

Following the financial crisis, lenders imposed a greater level of discipline on new loan originations. Underwriting standards were more conservative and lenders required additional reserves and enforced stricter covenants. At the same time, investors demanded a greater level of disclosure regarding the underlying collateral in new CMBS offerings along with more information about the potential risks associated with these investments.

In June 2010, the first new-issue multi-borrower CMBS securitization following the credit crisis occurred, and for calendar year 2010, new CMBS issuance totaled $11.6 billion. In 2011, new CMBS issuance totaled $32.7 billion, despite a slowdown in originations during the second half of the year because of the uncertain economic climate created by the Euro-area crisis. In 2012, new CMBS issuance totaled $48.4 billion. In the first quarter of 2013, new CMBS issuance totaled $22.9 billion, compared to $6.0 billion of new issuance in the first quarter of 2012. We believe there is the capacity for a continuing market recovery and that the CMBS market will continue to play an important role in the financing of commercial real estate in the United States.

Competition

The commercial real estate finance markets are highly competitive. We face competition for lending and investment opportunities from a variety of institutional lenders and investors and many other market participants, including specialty finance companies, REITs, commercial banks and thrift institutions, investment banks, insurance companies, hedge funds and other financial institutions. Many of these competitors enjoy competitive advantages over us, including greater name recognition, established lending relationships with customers, financial resources, and access to capital.

We compete on the basis of relationships, product offering, loan structure, terms, pricing and customer service. Our success depends on our ability to maintain and capitalize on relationships with borrowers and brokers, offer attractive loan products, remain competitive in pricing and terms, and provide superior service.

Regulation

Our operations are subject, in certain instances, to supervision and regulation by state and federal governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions. In addition, certain of our subsidiaries’ businesses may rely on exemptions from various requirements of the Securities Act, the Exchange Act, the Investment Company Act, and ERISA. These exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third-parties who we do not control.

Regulatory Reform

The Dodd-Frank Act, which went into effect on July 21, 2010, is intended to make significant structural reforms to the financial services industry. For example, pursuant to the Dodd-Frank Act, various federal agencies have promulgated, or are in the process of promulgating, regulations with respect to various issues that affect securitizations, including (1) a requirement under the Dodd-Frank Act that issuers in securitizations retain 5% of the risk associated with the securities, (2) requirements for additional disclosure, (3) requirements for additional review and reporting, (4) a possible requirement that a portion of potential profit that would be realized on the securitization must be deposited in a reserve account and used as additional credit support for the related CMBS until the loans are repaid, and (5) certain restrictions designed to prevent conflicts of interest. The implementation of any regulations ultimately adopted will occur on a

139

time period that could range from two months to as long as two years. Certain regulations have already been adopted and others remain under consideration by various governmental agencies, in some cases past the deadlines set in the Dodd-Frank Act for adoption. Certain proposed regulations, if adopted, could alter the structure of securitizations in the future and could pose additional risks to our participating in future securitizations or could reduce or eliminate the economic incentives of participating in future securitizations.

Pursuant to a new rule adopted by the SEC on October 26, 2011, we will be required to periodically file reports on a new Form PF. The rule subjects certain large private fund advisers to more detailed and in certain cases more frequent reporting requirements. The information will be used by the Council in monitoring risks to the U.S. financial system.

Certain other new federal, state and municipal rules could also impact our business. These include (1) new CFTC rules regarding CPO and CTA registration and compliance obligations, (2) new regulatory, reporting and compliance requirements applicable to swap dealers, security-based swaps dealers and major swap participants under the Dodd-Frank Act, (3) new Dodd-Frank regulation on derivative transactions and (4) new requirements in California and New York City that require placement agents who solicit funds from the retirement and public pension systems to register as lobbyists. Given the current status of the regulatory developments, we cannot currently quantify the possible effects of these regulatory changes. The final form these rules will take is not yet known, and their final formulation could be more, or less, restrictive than the current proposals. See “Risk factors—Risks related to regulatory and compliance matters” and “—Risks related to hedging.”

Regulation of Commercial Real Estate Lending Activities

Although most states do not regulate commercial finance, certain states impose limitations on interest rates and other charges and on certain collection practices and creditor remedies, and require licensing of lenders and financiers and adequate disclosure of certain contract terms. We also are required to comply with certain provisions of, among other statutes and regulations, certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans, the USA PATRIOT Act, regulations promulgated by the Office of Foreign Asset Control and federal and state securities laws and regulations.

Regulation as a REIT

We hold certain of our investments through the Ladder REIT and its subsidiaries. The Ladder REIT is a REIT chartered in Maryland. To qualify as a REIT for U.S. federal income tax purposes, the Ladder REIT must continually satisfy tests concerning, among other things, the sources of its income, the nature and diversification of its assets, the amounts that it distributes to its stockholders and the ownership of its shares. If the Ladder REIT fails to qualify as a REIT in any taxable year, it will be subject to federal income tax (including any applicable alternative minimum tax and possibly increased state and local taxes) on its net taxable income at regular corporate income tax rates. Even if the Ladder REIT qualifies for taxation as a REIT, it may be subject to state and local taxes and to federal income tax and excise tax on, among other things, its undistributed income.

Regulation as an Investment Adviser

We conduct investment advisory activities in the United States through our subsidiaries, Ladder Capital Adviser LLC and LCR Income I GP LLC, which are regulated by the SEC as registered investment advisers under the Advisers Act. A registered investment adviser is

140

subject to federal and state laws and regulations primarily intended to benefit its clients. These laws and regulations include requirements relating to, among other things, fiduciary duties to clients, maintaining an effective compliance program, solicitation agreements, conflicts of interest, record keeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an investment adviser and its advisory clients and general anti-fraud prohibitions. In addition, these laws and regulations generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict us from conducting our advisory activities in the event we fail to comply with those laws and regulations. Sanctions that may be imposed for a failure to comply with applicable legal requirements include the suspension of individual employees, limitations on our engaging in various advisory activities for specified periods of time, disgorgement, the revocation of registrations, other censures and fines.

We may become subject to additional regulatory and compliance burdens as our investment adviser subsidiaries expand their product offerings and investment platform. For example, if one of our investment adviser subsidiaries were to advise a registered investment company under the Investment Company Act, such registered investment company and our subsidiary that serves as its investment adviser would be subject to the Investment Company Act and the rules thereunder, which, among other things, regulate the relationship between a registered investment company and its investment adviser and prohibit or severely restrict principal transactions and joint transactions. This additional regulation could increase our compliance costs and create the potential for additional liabilities and penalties.

In June 2010, the SEC approved Rule 206(4)-5 under the Advisers Act regarding “pay to play” practices by investment advisers involving campaign contributions and other payments to government clients and elected officials able to exert influence on such clients. The rule prohibits investment advisers from providing advisory services for compensation to a government client for two years, subject to very limited exceptions, after the investment adviser, its senior executives or its personnel involved in soliciting investments from government entities make contributions to certain candidates and officials in a position to influence the hiring of an investment adviser by such government client. Advisers are required to implement compliance policies designed, among other matters, to track contributions by certain of the adviser’s employees and engagement of third-parties that solicit government entities and to keep certain records in order to enable the SEC to determine compliance with the rule. In addition, there have been similar rules on a state-level regarding “pay to play” practices by investment advisers.

Regulation as a Broker-Dealer

We have a subsidiary, Ladder Capital Securities LLC, that is registered as a broker-dealer with the SEC and in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and is a member of FINRA. This subsidiary is subject to regulations that cover all aspects of its business, including sales methods, trade practices, use and safekeeping of clients’ funds and securities, the capital structure of the subsidiary, recordkeeping, the financing of clients’ purchases and the conduct of directors, officers and employees. Violations of these regulations can result in the revocation of its broker-dealer license (which could result in our having to hire new licensed investment professionals before continuing certain operations), the imposition of censure or fines and the suspension or expulsion of the subsidiary, its officers or employees from FINRA. The subsidiary also may be required to maintain certain minimum net capital. Rule 15c3-1 of the Exchange Act specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. The SEC and FINRA impose rules that require notification when net

141

capital falls below certain predefined criteria, limit the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC’s uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.

Regulation as a Captive Insurance Company

We maintain a captive insurance company, Tuebor, to provide coverage previously self-insured by us, including nuclear, biological or chemical coverage, excess property coverage and excess errors and omissions coverage. It is regulated by the state of Michigan and is subject to regulations that cover all aspects of its business. Violations of these regulations can result in revocation of its authorization to do business as a captive insurer or result in censures or fines. The subsidiary is also subject to insurance laws of states other than Michigan (i.e., states where the insureds are located).

Investment Company Act Exemption

We intend to conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act. If we were unable to maintain an exemption from registration under the Investment Company Act, we could, among other things, be required either to (a) substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company under the Investment Company Act, any of which could have an adverse effect on us and the value of our securities.

If we or any of our subsidiaries were required to register as an investment company under the Investment Company Act, the registered entity would become subject to substantial regulation with respect to capital structure (including the ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration, compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations. For example, because affiliate transactions are generally prohibited under the Investment Company Act, we would not be able to enter into certain transactions with any of our affiliates if we are required to register as an investment company, which could have a material adverse effect on our ability to operate our business.

If we were required to register us as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer which is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis. Excluded from the term “investment securities,” among other things, are U.S. Government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying

142

on the exception from the definition of investment company for certain privately-offered investment vehicles set forth in Section 3(c)(1) or 3(c)(7) of the Investment Company Act.

We are organized as a holding company and conduct our businesses primarily through our subsidiaries. We intend to conduct our operations so that we comply with the 40% test, under which the securities issued by any wholly-owned or majority-owned subsidiaries that we may form in the future that are excepted from the definition of “investment company” under Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a combined value in excess of 40% of the value of our adjusted total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis. We will monitor our holdings to ensure continuing and ongoing compliance with this test. In addition, we believe that we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we will not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we will be engaged primarily in the non-investment company businesses of our subsidiaries.

We expect that certain of our subsidiaries may rely on the exemption from registration as an investment company under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exemption generally requires that at least 55% of these subsidiaries’ assets must comprise qualifying real estate assets and at least 80% of each of their portfolios must comprise qualifying real estate assets and real estate-related assets under the Investment Company Act. We expect each of our subsidiaries relying on Section 3(c)(5)(C) to rely on guidance published by the SEC staff or on our analyses of such guidance to determine which assets are qualifying real estate assets and real estate-related assets. To the extent that the SEC staff publishes new or different guidance with respect to any assets we have determined to be qualifying real estate assets, we may be required to adjust our strategy accordingly. In addition, we may be limited in our ability to make certain investments and these limitations could result in a subsidiary holding assets we might wish to sell or selling assets we might wish to hold.

Any of the Company or our subsidiaries may rely on the exemption provided by Section 3(c)(6) of the Investment Company Act to the extent that they primarily engage, directly or through majority-owned subsidiaries, in the businesses described in Sections 3(c)(3), 3(c)(4) and 3(c)(5) of the Investment Company Act. The SEC staff has issued little interpretive guidance with respect to Section 3(c)(6) and any guidance published by the staff could require us to adjust our strategy accordingly.

The SEC recently solicited public comment on a wide range of issues relating to Section 3(c)(5)(C) of the Investment Company Act, including the nature of the assets that qualify for purposes of the exemption and whether companies that are engaged in the business of acquiring mortgages and mortgage-related instruments should be regulated in a manner similar to investment companies. There can be no assurance that the laws and regulations governing the Investment Company Act status of such companies, including the SEC or its staff providing more specific or different guidance regarding Section 3(c)(5)(C), will not change in a manner that adversely affects our operations. If we or our subsidiaries fail to maintain an exemption from registration under the Investment Company Act, we could, among other things, be required either to (a) change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company, any of which could negatively affect our financial results, the sustainability of our business model or the value of our securities.

143

Qualification for exemption from registration under the Investment Company Act will limit our ability to make certain investments. See “Risk factors—Risks related to our Investment Company Act exemption—Maintenance of our exemption from registration under the Investment Company Act imposes significant limits on our operations.”

Employees

As of March 31, 2013, we employed 58 full-time persons. All employees are employed by our operating subsidiary, Ladder Capital Finance LLC. None of our employees are represented by a union or subject to a collective bargaining agreement and we have never experienced a work stoppage. We believe that our employee relations are good.

Property

We lease our corporate headquarters office at 345 Park Avenue, 8th Floor, New York, New York, 10154. We also have regional offices at 10250 Constellation Boulevard, Suite 260, Los Angeles, California, 90067 and 433 Plaza Real, Suite 275, Boca Raton, Florida, 33432.

We own a portfolio of commercial real estate properties. As of March 31, 2013, we owned 34 single tenant retail properties with an aggregate book value of $263.8 million. These properties are leased on a net basis where the tenant is generally responsible for payment of real estate taxes, building insurance and maintenance expenses. Sixteen of our properties are leased to a national pharmacy chain, and the remaining properties are leased to a national discount retailer, a regional sporting goods store, and a regional membership warehouse club. As of March 31, 2013, our net leased properties comprised a total of 1.3 million square feet, had a 100% occupancy rate, had an average age since construction of 7 years and a weighted average lease maturity of 19.5 years. We originated mortgage loans on many of these assets, and many of these loans have subsequently been securitized and are included as nonrecourse long-term financing of $154.0 million on our balance sheet at March 31, 2013. In addition, as of March 31, 2013, we owned a 13 story office building through a joint venture with an operating partner.

144

As of March 31, 2013, we owned 408 residential condominium units at Veer Towers in Las Vegas with a book value of $114.7 million through a consolidated joint venture with an operating partner. The units were 66% rented and occupied as of March 31, 2013. We expect to sell units over time.

The following table summarizes our owned properties as of March 31, 2013:

Tenant Type	Location	Year built/ reno		Lease expiration (1)		Approximate Square footage		Carrying value of asset		Mortgage loan outstanding		Net book value of asset		Annual rental income(2)
								($ in thousands)
Retail	Lexington, SC		2009		09/30/33		14,820	$	4,450	$	2,898	$	1,552	$	362
Retail	Elkton, MD		2008		10/31/33		13,706		4,548		2,928		1,620		380
Retail	Lilburn, GA		2007		10/31/32		14,820		5,402		3,474		1,928		443
Retail	Douglasville, GA		2008		10/31/33		13,434		5,102		3,264		1,838		416
Retail	Tupelo, MS		2007		01/31/33		14,820		4,791		3,090		1,701		400
Retail	Spartanburg, SC		2007		08/31/32		14,820		3,643		2,863		780		291
Retail	Abingdon, VA		2006		06/30/31		15,371		4,656		3,003		1,653		300
Retail	Aiken, SC		2008		02/28/33		14,550		5,892		—		5,892		384
Retail	Johnson City, TN		2007		03/30/32		14,550		5,227		—		5,227		341
Retail	Gallatin, TN		2007		09/30/32		14,820		5,035		—		5,035		329
Retail	Greenwood, AR		2009		06/30/34		13,650		5,025		3,346		1,680		332
Retail	Mt. Airy, NC		2007		06/30/32		14,820		4,462		—		4,462		292
Retail	Chattanooga, TN		2008		01/31/33		14,550		5,665		3,740		1,925		365
Retail	Palmview, TX		2012		08/31/37		14,820		6,773		4,466		2,307		437
Retail	Millbrook, AL		2008		03/22/32		6,987		6,752		4,512		2,240		448
Retail	Orange City, FL		2011		04/30/27		9,026		1,275		798		477		103
Retail	Yulee, FL		2012		05/31/27		9,026		1,301		875		426		105
Retail	Middleburg, FL		2011		11/30/26		9,026		1,134		774		360		92
Retail	Satsuma, FL		2011		11/30/26		9,026		1,048		—		1,048		86
Retail	DeLeon Springs, FL		2011		01/31/27		9,100		1,209		801		408		98
Retail	Pittsfield, MA		2011		10/29/31		85,188		14,226		11,000		3,226		1,065
Retail	North Dartsmouth, MA		1989		08/31/32		103,680		29,354		18,275		11,079		2,074
Retail	Mooresville, NC		2000		08/31/32		108,528		17,284		10,761		6,524		1,221
Retail	Saratoga Springs, NY		1994		08/31/32		116,620		19,819		12,339		7,480		1,166
Retail	Sennett, NY		1996		08/31/32		68,160		7,317		4,555		2,762		545
Retail	Tilton, NH		1996		08/31/32		68,160		7,098		4,419		2,679		562
Retail	Vineland, NJ		2003		08/31/32		115,368		22,079		13,746		8,333		1,557
Retail	Waldorf, MD		1999		08/31/32		15,660		18,481		11,505		6,975		1,272
Retail	Columbia, SC		2001		04/30/32		71,744		7,580		5,137		2,443		581
Retail	Jonesboro, AR		2012		10/31/32		71,600		8,301		5,460		2,841		626
Retail	Mt. Juliet, TN		2012		11/30/32		71,917		9,017		6,000		3,017		683
Retail	Snellville, GA		2011		04/30/32		67,375		7,739		5,281		2,458		605
Retail	Wichita, KS		2012		12/31/32		73,322		7,122		4,680		2,442		536
Condominium	Las Vegas, NV		2006				401,430		113,935		—		113,935		—	(3)
Retail	Durant, OK		2007		02/28/33		14,550		4,968		—		4,968		323
Office Building	Oakland County, MI		1989				240,900		17,968		—		17,968		3,723
Total							1,949,944	$	395,678	$	153,989	$	241,689	$	22,546

(1) Lease expirations reflect the earliest date the lease is cancellable without penalty. However, actual term is longer.

(2) Annual rental income represents twelve months of contractual rental income due under leases outstanding for the year ended December 31, 2013. Operating lease income on the consolidated statements of income represents rental income earned and recorded on a straight line basis over the term of the lease.

(3) We own, through a majority owned joint venture with an operating partner, a portfolio of residential condominium units, some of which are subject to residential leases. Our intent is to sell these properties. The residential leases are generally short term in nature and are not included in the table above as it does not reflect the Company’s intent to sell the properties.

145

Legal Proceedings

From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course. Further, certain of our subsidiaries, including our registered broker-dealer, registered investment adviser and captive insurance company, are subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. We are not presently a party to any enforcement proceedings, litigation related to regulatory compliance matters or any other type of material litigation matters. We maintain insurance policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards.

146

MANAGEMENT

Directors, Executive Officers and Other Key Executives

The following table sets forth information as to persons who serve as our directors, executive officers or other key executives. Biographical information for each of the directors and officers can be found below. The positions referenced in the biographies represent the final positions held. We expect to have seven individuals serve as our directors, of whom four are currently serving. Prior to this offering we expect that additional directors who are independent in accordance with the criteria established by the NYSE for independent board members will be appointed to our board of directors.

Our Directors, Executive Officers and Other Key Executives

Name	Age		Position
Alan Fishman		67	Non-Executive Chairman of the Board of Directors
Brian Harris		52	Chief Executive Officer and Director
Jonathan Bilzin		40	Director
Howard Park		51	Director
Michael Mazzei		52	President
Greta Guggenheim		54	Chief Investment Officer
Marc Fox		53	Chief Financial Officer
Pamela McCormack		42	General Counsel and Co-Head of Securitization
Thomas Harney		51	Head of Merchant Banking and Capital Markets
Robert Perelman		50	Head of Asset Management

Alan Fishman.     Mr. Fishman was appointed as Non-Executive Chairman of Ladder Capital Corp at its formation in May 2013 and previously was Non-Executive Chairman of LCFH since its formation in October 2008. Prior to that, Mr. Fishman was appointed as Chief Executive Officer of Washington Mutual Inc. and its holding company in September 2008 for a brief period immediately preceding the holding company’s being placed into receivership and Washington Mutual Inc.’s merger immediately thereafter with J.P. Morgan Chase & Co. Mr. Fishman also previously served as Chairman of Meridian Capital Group from April 2007 to September 2008 and President of Sovereign Bank Corp from June 2006 until December 2006. From March 2001 until its sale to Sovereign Bank Corp in June 2006, Mr. Fishman served as Chief Executive Officer and President of Independence Community Bank. Mr. Fishman also serves as Chairman of the Board of Trustees of the Brooklyn Academy of Music, Chairman of the Brooklyn Navy Yard Development Corporation, Chairman of the Downtown Brooklyn Partnership, Chairman of the Brooklyn Community Foundation and on the boards of several other not-for-profit and civic organizations. Mr. Fishman earned a B.S. from Brown University and a Masters in Economics from Columbia University. Mr. Fishman’s extensive financial management experience qualifies him to serve as a member of our board.

Brian Harris.     Mr. Harris is a co-founder of Ladder and has served as Chief Executive Officer of Ladder since its formation in October 2008. Mr. Harris has been a director of Ladder Capital Corp since its formation in May 2013 and a director of LCFH since its formation in 2008. Mr. Harris has over 28 years of experience in the real estate and financial markets. Prior to forming Ladder, Mr. Harris served as a Senior Partner, Managing Director and Head of Global Commercial Real Estate at Dillon Read Capital Management (“DRCM”), a wholly owned subsidiary of UBS AG from June 2006 to May 2007, managing over $500 million of equity capital from UBS AG for DRCM’s commercial real estate activities globally. Prior to that,

147

Mr. Harris served as Managing Director and Head of Global Commercial Real Estate at UBS Securities LLC from June 1999 to June 2006, managing UBS’ proprietary commercial real estate activities globally. Mr. Harris also served as a member of the Board of Directors of UBS Investment Bank from April 2003 to September 2005. From March 1996 to April 1999, Mr. Harris served as Head of Commercial Mortgage Trading at Credit Suisse Securities (USA) LLC (“Credit Suisse”) and was responsible for managing all proprietary commercial real estate investment and trading activities. Prior to that, Mr. Harris also worked in the real estate groups at Lehman Brothers, Salomon Brothers, Smith Barney and Daiwa Securities. Mr. Harris earned a B.S. in Biology and an M.B.A. from The State University of New York at Albany. Mr. Harris’ real estate and financial experience qualify him to serve as a member of our board.

Jonathan Bilzin.     Mr. Bilzin was appointed as a director of Ladder Capital Corp at its formation in May 2013. Previously, Mr. Bilzin had been a director of LCFH since its formation in October 2008. Mr. Bilzin is a Managing Director of TowerBrook, a private equity firm, where Mr. Bilzin has served since its formation in March 2005. Mr. Bilzin serves on TowerBrook’s Management Committee. Mr. Bilzin also serves as a director of Ironshore Inc., Sound Inpatient Physicians, Inc., Unison Site Management LLC, Rave Cinemas LLC, Shale-Inland Holdings, LLC and Wilton Industries, Inc. Mr. Bilzin earned a B.A. from the University of Michigan and an M.B.A. from the Stanford Graduate School of Business. Mr. Bilzin’s senior role at TowerBrook and his business experience qualify him to serve as a member of our board.

Howard Park.    Mr. Park was appointed as a director of Ladder Capital Corp at its formation in May 2013. Previously, Mr. Park had been a director of LCFH since its formation in October 2008. Mr. Park has served as a Managing Director of GI Partners, since March 2003. Mr. Park serves or has served on the boards of SoftLayer Technologies, Inc., The Planet, Inc., Telx Corporation, Advoserv, Inc., Plum Healthcare Group, LLC and PC Helps Support, LLC. Mr. Park graduated cum laude from Rice University with a B.A. in Economics and earned an M.B.A. from the Amos Tuck School of Business at Dartmouth College. Mr. Park’s leadership role at GI Partners and his business experience qualify him to serve as a member of our board.

Michael Mazzei.    Mr. Mazzei was appointed as President of Ladder in June 2012. From September 2009 to June 2012, Mr. Mazzei served as a Managing Director and Global Head of the CMBS and Bank Loan Syndication Group at Bank of America Merrill Lynch. Prior to that, Mr. Mazzei served as Co-Head of CMBS and Commercial Real Estate Debt Markets at Barclays Capital from March 2004 to June 2009. Prior to Barclays Capital, Mr. Mazzei spent 20 years at Lehman Brothers where Mr. Mazzei became the head of CMBS in 1991 and served as the Co-Head of Global Real Estate Investment Banking from March 2002 to February 2004. Mr. Mazzei earned a B.S. in Finance from Baruch College CUNY and a J.D. from St. John’s University, and is a graduate of the New York University Real Estate Institute.

Greta Guggenheim.    Ms. Guggenheim is a co-founder of Ladder and was President of Ladder from its formation in October 2008 through June 2012 and was appointed Chief Investment Officer in June 2012. Prior to forming Ladder, Ms. Guggenheim served as a Managing Director and Head of Origination at DRCM from June 2006 to June 2007. Before joining DRCM, Ms. Guggenheim served as a Managing Director in Originations at UBS from May 2002 to June 2006. Prior to joining UBS, Ms. Guggenheim served as a Managing Director at Bear Stearns & Co. (“Bear Stearns”) from October 2000 to April 2002 and previously worked in real estate investment banking and commercial real estate lending at Credit Suisse and Credit Suisse First Boston from 1986 to 1999. Ms. Guggenheim earned a B.A. in Economics and Spanish Literature from Swarthmore College and an M.B.A. from The Wharton School of the University of Pennsylvania.

148

Marc Fox.    Mr. Fox was appointed as Chief Financial Officer of Ladder in November 2008. From January 1999 through 2008, Mr. Fox served as Treasurer of Capmark Financial Group Inc. (“Capmark”), where Mr. Fox formulated and executed its worldwide funding strategies. He left Capmark within 1 year before its filing for bankruptcy in late 2009. Mr. Fox was significantly involved in the formation of Capmark’s wholly owned banking platform and debt management of Capmark Bank, a regulated industrial bank subsidiary of Capmark. Mr. Fox earned a B.S. in Economics and an M.B.A. from The Wharton School of the University of Pennsylvania.

Pamela McCormack.    Ms. McCormack is a co-founder of Ladder and was appointed as General Counsel of Ladder at its formation in October 2008 and was subsequently also appointed as Co-Head of Securitization in 2010. Prior to forming Ladder, Ms. McCormack served as Executive Director and Head of Transaction Management at DRCM from June 2006 to June 2007. Before joining DRCM, Ms. McCormack served as Executive Director and Co-Head of Transaction Management and, previously also as Counsel, at UBS Securities LLC from October 2003 to June 2006. In that capacity, Ms. McCormack managed a team responsible for the structuring, negotiating and closing of all real estate investments globally. Prior to joining UBS Securities LLC, Ms. McCormack worked as Vice President and Counsel at Credit Suisse and as a real estate and finance attorney at Stroock, Stroock & Lavan LLP and Brown Raysman Millstein Felder & Steiner LLP. Ms. McCormack graduated cum laude with a B.A. in English from the State University of New York at Stony Brook and earned a J.D. from St. John’s University School of Law.

Thomas Harney.    Mr. Harney was appointed Head of Merchant Banking & Capital Markets of Ladder in October 2010. Prior to joining Ladder, Mr. Harney served as the Head of Real Estate at Tri-Artisan Capital Partners, a private merchant banking group based in New York from 2008 to 2010. Before joining Tri-Artisan, Mr. Harney served as Senior Managing Director of the Real Estate Investment Banking Group at Bear Stearns, where Mr. Harney worked from 1997 to 2008. Mr. Harney has extensive experience in completing large-scale M&A transactions, as well as a broad range of debt and equity securities transactions in both public and private formats. Mr. Harney graduated magna cum laude with a B.A. in Urban Studies from the University of Pennsylvania and is a graduate of the New York University Finance & Development Program.

Robert Perelman.    Mr. Perelman is a co-founder of Ladder and was appointed as Head of Asset Management of Ladder at its formation in October 2008. Prior to forming Ladder, Mr. Perelman served as a Director and Head of Asset Management at UBS Securities LLC from June 2007 to October 2007 and, previously prior to the launch of DRCM, from April 2006 to June 2006. Prior to being re-integrated to UBS Securities LLC, Mr. Perelman served as a Director and Head of Asset Management at DRCM from June 2006 to June 2007. In that capacity, Mr. Perelman managed a team responsible for the portfolio management of all real estate investments globally. Prior to joining DRCM, Mr. Perelman served as a Managing Director and Partner at Hudson Realty Capital LLC (“Hudson Realty”), a private equity fund, where Mr. Perelman worked from June 2003 to March 2006 and was responsible for loan origination, real estate investments and asset management. Before joining Hudson Realty, Mr. Perelman served as a Director at Credit Suisse from February 1998 to May 2003. During his tenure at Credit Suisse, Mr. Perelman had significant responsibility for the structuring and closing of a wide variety of real estate investments within the United States and Asia. Mr. Perelman earned a B.S. in Telecommunications Management from Syracuse University and a J.D. from Fordham University School of Law.

149

Board Composition

The board of directors of Ladder Capital Corp will initially consist of 7 directors. The authorized number of directors may be changed by resolution of our board of directors. Vacancies on our board of directors can be filled by resolution of our board of directors. Upon the completion of this offering, our board of directors will be divided into three classes, each serving staggered, three-year terms:

• Our Class I directors will be             and             , and their terms will expire at the first annual meeting of stockholders following the date of this prospectus;

• Our Class II directors will be             and             , and their terms will expire at the second annual meeting of stockholders following the date of this prospectus; and

• Our Class III directors will be             and             , and their terms will expire at the third annual meeting of stockholders following the date of this prospectus.

As a result, only one class of directors will be elected at each annual meeting of stockholders, with the other classes continuing for the remainder of their respective terms.

Board Committees

Audit Committee

The audit committee provides assistance to the board of directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control and legal compliance functions by approving the services performed by our independent registered public accounting firm and reviewing their reports regarding our accounting practices and systems of internal accounting controls. The audit committee also oversees the audit efforts of our independent registered public accounting firm and takes those actions as it deems necessary to satisfy itself that the independent registered public accounting firm is independent of management. We believe that the composition of our audit committee meets the requirements for independence and financial literacy under the applicable requirements of the SEC rules and regulations.

Compensation Committee

After completion of this offering, the compensation committee will determine our general compensation policies and the compensation provided to our directors and officers. The compensation committee will also review and determine bonuses for our officers and other employees. In addition, the compensation committee will review and determine equity-based compensation for our directors, officers, employees and consultants and will administer our equity incentive plans. Our compensation committee will also oversee our corporate compensation programs. Our compensation committee is currently comprised of Messrs.             ,             and             . We believe that the composition of our compensation committee meets the criteria for independence under the applicable requirements of the SEC rules and regulations.

Nominating and Corporate Governance Committee

After completion of this offering, the nominating and corporate governance committee will be responsible for making recommendations to the board of directors regarding candidates for directorships and the size and composition of the board. In addition, the nominating and corporate governance committee will be responsible for overseeing our corporate governance guidelines and reporting and making recommendations to the board of directors concerning corporate governance matters. The composition of this committee has yet to be determined.

150

Risk and Underwriting Committee

The risk and underwriting committee is composed of Alan Fishman (Chair), Jonathan Bilzin, Howard Park and Brian Harris. The committee reviews our internal risk reports and evaluates risk management strategies. In addition, it reviews and approves (i) fixed rate loans greater than $50 million, (ii) floating rate and mezzanine loans greater than $20 million, (iii) real estate equity investments greater than $5 million, (iv) AAA rated securities positions greater than $50 million and (v) all other securities positions greater than $26 million. This committee meets monthly or more frequently as needed depending on the transaction requirements.

Role of Our Board of Directors in Risk Oversight

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure, and our audit committee will have the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures. The audit committee will also have the responsibility to review with management the process by which risk assessment and management is undertaken, monitor compliance with legal and regulatory requirements, and review with our independent auditors the adequacy and effectiveness of our internal controls over financial reporting. Our nominating and corporate governance committee will be responsible for periodically evaluating the Company’s corporate governance policies and system in light of the governance risks that the Company faces and the adequacy of the Company’s policies and procedures designed to address such risks. Our compensation committee will assess and monitor whether any of our compensation policies and programs are reasonably likely to have a material adverse effect on the Company. Our Risk and Underwriting Committee will assess and monitor our risk management strategies, including but not limited to those designed to mitigate credit, interest rate, liquidity and counterparty risk, and investments of material size as described above.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our board of directors or compensation committee and the board of directors or compensation committee of any other entity, nor has any interlocking relationship existed in the past.

Code of Business Conduct and Ethics

Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors effective upon the completion of this offering. At that time, the full text of our code of business conduct and ethics will be available on the Investor Relations section of our website at www.laddercapital.com. We intend to disclose future amendments to certain provisions of our code of business conduct, or waivers of certain provisions as they relate to our directors and executive officers, at the same location on our website or otherwise as required by applicable law. The information on our website is not intended to form a part of or be incorporated by reference into this prospectus.

151

EXECUTIVE COMPENSATION

The following discussion and tabular disclosure describes the material elements of compensation for our most highly compensated executive officers as of December 31, 2012 (collectively our “named executive officers”). Our named executive officers for 2012 were:

• Brian Harris, Chief Executive Officer;

• Michael Mazzei, President; and

• Thomas Harney, Head of Merchant Banking and Capital Markets.

Executive Compensation

Compensation Philosophy and Objectives

Our compensation philosophy is to align executive compensation with the interests of our partners and, therefore, to financial objectives that our board of directors believes are primary determinants of long-term equity value. The primary goal of our executive compensation program is to ensure that we hire and retain talented and experienced executives who are motivated to achieve or exceed our short-term and long-term company goals. Our executive compensation programs are designed to reinforce a strong pay-for-performance orientation and to serve the following purposes:

• to reward our named executive officers for sustained financial and operating performance and leadership excellence;

• to align the interests of our executives with those of our partners; and

• to encourage our named executive officers to remain with us for the long-term.

Elements of Compensation

Base Salary

We pay our named executive officers a base salary based on the experience, skills, knowledge and responsibilities required of each officer. We believe base salaries are an important element in our overall compensation program because base salaries provide a fixed element of compensation that reflects job responsibilities and value to us.

Annual Cash Bonuses

To date, our board of directors has not adopted a formal plan or set of formal guidelines with respect to annual incentive or bonus payments, and has instead relied on an annual assessment of the performance of our executives during the preceding year to make annual incentive and bonus determinations. Our board of directors may retain the discretion to pay any such bonuses or incentive payments.

Long-Term Equity Compensation

Currently, we provide our named executive officers with long-term equity compensation pursuant to our 2008 Incentive Equity Plan, as amended. We believe that providing our named executive officers with an equity interest brings their interests in line with those of our partners and that including a vesting component to those equity interests encourages our named executive officers to remain with us over the applicable vesting period.

152

Prior to the completion of this offering, our board of directors intends to adopt the 2013 Ladder Capital Corp Incentive Equity Plan, or the “2013 Omnibus Incentive Plan,” and receive approval of such plan by our current shareholders. See “—Employee Benefit Plans—2013 Stock Incentive Plan” for a description of the material terms of this plan. All future equity compensation to our named executive officers will be granted under the 2013 Stock Incentive Plan.

Other Supplemental Benefits

Our named executive officers are eligible for the following benefits on a similar basis as other eligible employees:

• health, dental and vision insurance;

• vacation and sick days;

• life insurance;

• short-term and long-term disability insurance; and

• 401(k) plan.

Summary Compensation Table

The following table sets forth information concerning the total compensation received by, or earned by, our named executive officers during the past two fiscal years.

Name and Principal Position	Year		Salary ($)		Bonus ($)			Stock Awards ($)			Option Awards ($)		All Other Compensation ($)			Total ($)
Brian Harris		2012	$	500,000	$	1,900,000		$	—		$	—	$	1,877	(4)	$	2,401,877
Chief Executive Officer		2011		500,000		1,250,000			—			—		1,867	(4)		1,751,867
Michael Mazzei		2012		290,064		1,750,000			5,448,816	(2)		145,161		146,105	(3)		7,780,146
President		2011		—		—			—			—		—			—
Thomas Harney		2012		400,000		1,700,000			—			—		1,877	(4)		2,101,877
Head of Merchant Banking and Capital Markets		2011		400,000		1,350,000	(1)		—			—		1,867	(4)		1,751,867

(1) Includes $115,500 contribution to the Phantom Equity Investment Plan (Deferred Compensation Plan).

(2) Includes grant of $1,360,106 of Class A Common Units and grant of $4,088,710 of Series B Participating Preferred Units.

(3) Includes purchase discount of $145,161 on the purchase of Series B Participating Preferred Units and $944 life and disability insurance premiums, paid by the Company.

(4) Includes life and disability insurance premiums paid by Ladder Capital Finance LLC.

153

Outstanding Option Awards at Year End

The following table summarizes the total outstanding option awards as of December 31, 2012, for each named executive officer.

Outstanding Option Awards at December 31, 2012

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date
Brian Harris		—		—		—		—
Michael Mazzei		24,193.55(1)		—		$124		June 6, 2013
Thomas Harney		—		—		—		—

(1) Mr. Mazzei exercised his option in respect of 14,516.13 Series B Participating Preferred Units on May 29, 2013 at an exercise price of $124.0 per unit. The remaining options held by Mr. Mazzei terminated on May 29, 2013.

Employment Agreements

We have entered into employment agreements with each of our named executive officers. A description of each of these agreements follows.

Brian Harris.    During January 2013, Ladder Capital Finance LLC entered into an amended and restated employment agreement with Mr. Harris, which will remain in effect until Mr. Harris ceases to be an employee of Ladder Capital Finance LLC. The agreement grants Mr. Harris a base salary, which shall not be less than $500,000 per annum. Mr. Harris is also eligible to receive a discretionary cash bonus to be determined by the board of directors on an annual basis and is entitled to participate in Ladder Capital Finance LLC’s standard employee benefit programs.

Pursuant to an equity grant agreement, dated September 22, 2008, the Company granted Mr. Harris 6,049,443 Class A-2 Common Units. Pursuant to an amendment, dated December 22, 2008, such number of Class A-2 Common Units granted was increased to 6,058,760 and during November 2009 such number of Class A-2 Common Units were automatically increased pursuant to a pre-determined contractual formula to 6,305,333 Class A-2 Common Units. Subject to certain terms and conditions, these units vested over 42 months beginning on September 22, 2008.

Michael Mazzei.    During 2012, Ladder Capital Finance LLC entered into an employment agreement with Michael Mazzei, which will remain in effect until Mr. Mazzei ceases to be an employee of Ladder Capital Finance LLC. The agreement grants Mr. Mazzei a base salary, which shall not be less than $500,000 per annum. Mr. Mazzei is also eligible to participate in Ladder Capital Finance LLC’s bonus pool. He is also entitled to participate in Ladder Capital Finance LLC’s standard employee benefit programs.

Pursuant to an equity grant agreement, dated June 4, 2012, the Company granted Mr. Mazzei 1,127,543 Class A-2 Common Units (which were subsequently transferred by Mr. Mazzei to a Mazzei trust) and 31,451.61 Series B Participating Preferred Units. Subject to certain terms and conditions, these units vest over 36 months beginning on January 1, 2012, which vesting may accelerate in certain circumstances, including a sale of LCFH. In addition, Mr. Mazzei was granted an option to purchase up to 24,195.55 Series B Participating

154

Preferred Units at a price of $124.00 per unit. Mr. Mazzei exercised his option in respect of 14,516.13 Series B Participating Preferred Units on May 29, 2013 at an exercise price of $124 per unit. The remaining options held by Mr. Mazzei terminated on May 29, 2013.

Thomas Harney.    During October 2010, Ladder Capital Finance LLC entered into a four-year employment agreement with Thomas Harney (which employment agreement was amended during January 2013), which automatically renews for one-year terms unless a non-renewal notice is provided by either party. The agreement grants Mr. Harney a base salary, which shall not be less than $400,000 per annum. Mr. Harney is also eligible to participate in Ladder Capital Finance LLC’s bonus pool. Under the agreement, Mr. Harney is also eligible to receive 50% of any cash received by Ladder for any assignment for merger and acquisition and merchant banking/advisory services performed by Ladder without any use of Ladder’s capital. He is also entitled to participate in Ladder Capital Finance LLC’s standard employee benefit programs.

Pursuant to an equity grant agreement, dated April 20, 2010, the Company granted Mr. Harney 910,491 Class A-2 Common Units. Subject to certain terms and conditions, these units vest over 42 months beginning on April 19, 2010.

Potential Payments upon Termination or Change-in-Control

Employment Agreements

Brian Harris.    Pursuant to his employment agreement, if Mr. Harris’ employment is terminated by Ladder Capital Finance LLC without cause or if Mr. Harris resigns for good reason, then (i) he is entitled under his employment agreement to receive severance payments of up to $5.0 million and to continue to receive certain employee benefits for one year following his termination date and (ii) he will only be subject to non-competition and non-solicitation provisions for a one-year period post-employment if Ladder Capital Finance LLC elects to pay him an additional $5.0 million. Cause generally means Mr. Harris’s willful and material violation of Ladder policy which he has previously approved, his willful misconduct which materially injures the financial condition of Ladder, certain breaches of his employment agreement, failure to comply in good faith with directions of the Board, or Mr. Harris’s commission of specified theft crimes or any felony. Good reason generally means significant changes in Mr. Harris’s official duties, relocation of his office without his consent, or reduction of his salary. Mr. Harris is required to execute a General Release waiving claims against the Ladder Capital Finance LLC arising from the employment agreement, as a condition to receiving his severance payments and benefits.

Michael Mazzei.    Pursuant to his employment agreement, if Mr. Mazzei’s employment is terminated by Ladder Capital Finance LLC without cause or Mr. Mazzei resigns with good reason, then (i) he will be entitled to continue to receive his base salary and certain employee benefits for a period of up to one year following his termination date as well as a pro rata bonus (if any) with respect to the fiscal year in which such termination of employment occurs and (ii) he will only be subject to non-competition and certain non-solicitation provisions for a one-year period post-employment if Ladder Capital Finance LLC elects to pay him an additional $1.5 million. Mr. Mazzei is entitled to a pro rata bonus for the portion of the year worked in a year in which termination occurs without cause or for good reason. Cause generally means Mr. Mazzei’s willful and material violation of Ladder Capital Finance LLC policy, his willful misconduct which materially injures the financial condition of Ladder Capital Finance LLC, certain breaches of his employment agreement, or Mr. Mazzei’s commission of specified theft crimes or any felony. Good reason generally means significant changes in Mr. Mazzei’s official duties or reduction of his salary below a specified minimum. Mr. Mazzei is required to execute a general release waiving claims against Ladder Capital Finance LLC arising from the employment agreement as a condition to receiving his severance payments and benefits.

155

Thomas Harney.    Pursuant to his employment agreement, if Mr. Harney ceases to be employed by Ladder Capital Finance LLC, he will be entitled to continue to receive his base salary and certain employee benefits for a period of up to 180 days following his termination date. Further, following his separation from Ladder Capital Finance LLC, Mr. Harney agrees that he will not compete with Ladder Capital Finance LLC for a period of 60 days and will not solicit the Company’s employees for a period of 180 days. Mr. Harney is required to execute a general release waiving claims against Ladder Capital Finance LLC arising from the employment agreement, as a condition to receiving his severance payments and benefits.

The Table below sets forth payments due as of December 31, 2012 to each named executive officer in case of termination without cause or resignation for good reason.

Named Executive Officer	Category of Payment	Termination Without Cause or Termination by the Employee for Good Reason		Termination Due to Death		Termination Upon Change of Control
Brian Harris	Cash Severance	$	5,035,496		—	$	—
	Accrued Bonus		—		—		—
	Vesting Options		—		—		—
	Total:	$	5,035,496		—	$	—
Michael Mazzei	Cash Severance	$	535,495		—	$	—
	Accrued Bonus		—		—		—
	Vesting Options		—		—		—
	Total:	$	535,496		—	$	—
Thomas Harney	Cash Severance	$	217,748		—	$	—
	Accrued Bonus		—		—		—
	Vesting Options		—		—		—
	Total:	$	217,748		—	$	—

Employee Benefit Plans

2008 Incentive Equity Plan

On September 22, 2008, our board of directors adopted the original 2008 Incentive Equity Plan. The Amended and Restated 2008 Incentive Equity Plan was adopted by our board of directors on February 15, 2012.

Pursuant to the 2008 Incentive Equity Plan, we granted each of the named executive officers Class A-2 Common Units and, in Mr. Mazzei’s case, Series B Participating Preferred Units, under individual grant agreements. See “—Summary Compensation Table” for the number of units granted.

2013 Omnibus Incentive Plan

In connection with this offering, we intend to adopt the Ladder Capital Corp 2013 Omnibus Incentive Plan, or the 2013 Omnibus Incentive Plan. The 2013 Omnibus Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of us and our subsidiaries, as well as others performing consulting or advisory services for us, are eligible for grants under the 2013 Omnibus Incentive Plan. The purpose of the 2013 Omnibus Incentive Plan is to provide incentives that will attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either

156

through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. Set forth below is a summary of the material terms of the 2013 Omnibus Incentive Plan. For further information about the 2013 Omnibus Incentive Plan, we refer you to the complete copy of the 2013 Omnibus Incentive Plan, which is attached as an exhibit to the registration statement, of which this prospectus is a part.

Administration

The 2013 Omnibus Incentive Plan is administered by the compensation committee of our board of directors. Among the compensation committee’s powers is to determine the form, amount and other terms and conditions of awards; clarify, construe or resolve any ambiguity in any provision of the 2013 Omnibus Incentive Plan or any award agreement; amend the terms of outstanding awards; and adopt such rules, forms, instruments and guidelines for administering the 2013 Omnibus Incentive Plan as it deems necessary or proper. The compensation committee has authority to administer and interpret the 2013 Omnibus Incentive Plan, to grant discretionary awards under the 2013 Omnibus Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the 2013 Omnibus Incentive Plan and the awards thereunder as the compensation committee deems necessary or desirable and to delegate authority under the 2013 Omnibus Incentive Plan to our executive officers.

Available Shares

The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2013 Omnibus Incentive Plan or with respect to which awards may be granted may not exceed             shares. The number of shares available for issuance under the 2013 Omnibus Incentive Plan may be subject to adjustment in the event of a reorganization, stock split, merger or similar change in the corporate structure or the outstanding shares of common stock. In the event of any of these occurrences, we may make any adjustments we consider appropriate to, among other things, the number and kind of shares, options or other property available for issuance under the plan or covered by grants previously made under the plan. The shares available for issuance under the 2013 Omnibus Incentive Plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the 2013 Omnibus Incentive Plan are for any reason cancelled, or expire or terminate unexercised, the shares covered by such awards may again be available for the grant of awards under the 2013 Omnibus Incentive Plan.

The maximum number of shares of our common stock with respect to which any stock option, stock appreciation right, shares of restricted stock or other stock-based awards that are subject to the attainment of specified performance goals and intended to satisfy Section 162(m) of the Internal Revenue Code and may be granted under the 2013 Omnibus Incentive Plan during any fiscal year to any eligible individual will be             shares (per type of award). The total number of shares of our common stock with respect to all awards that may be granted under the 2013 Omnibus Incentive Plan during any fiscal year to any eligible individual will be             shares. There are no annual limits on the number of shares of our common stock with respect to an award of restricted stock that are not subject to the attainment of specified performance goals to eligible individuals. The maximum number of shares of our common stock subject to any performance award which may be granted under the 2013 Omnibus Incentive Plan during any fiscal year to any eligible individual will be             shares. The

157

maximum value of a cash payment made under a performance award which may be granted under the 2013 Omnibus Incentive Plan during any fiscal year to any eligible individual will be $        .

Eligibility for Participation

Members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates are eligible to receive awards under the 2013 Omnibus Incentive Plan.

Award Agreement

Awards granted under the 2013 Omnibus Incentive Plan are evidenced by award agreements, which need not be identical, that provide additional terms, conditions, restrictions and/or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards in the event of a change of control or conditions regarding the participant’s employment, as determined by the compensation committee.

Stock Options

The compensation committee may grant nonqualified stock options to eligible individuals and incentive stock options only to eligible employees. The compensation committee will determine the number of shares of our common stock subject to each option, the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a ten percent stockholder, the exercise price, the vesting schedule, if any, and the other material terms of each option. No incentive stock option or nonqualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a ten percent stockholder, 110% of such share’s fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the compensation committee at grant and the exercisability of such options may be accelerated by the compensation committee.

Stock Appreciation Rights

The compensation committee may grant stock appreciation rights, which we refer to as SARs, either with a stock option, which may be exercised only at such times and to the extent the related option is exercisable, which we refer to as a Tandem SAR, or independent of a stock option, which we refer to as a Non-Tandem SAR. A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the compensation committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by a SAR will be the exercise price per share of the related option in the case of a Tandem SAR and will be the fair market value of our common stock on the date of grant in the case of a Non-Tandem SAR. The compensation committee may also grant limited SARs, either as Tandem SARs or Non-Tandem SARs, which may become exercisable only upon the occurrence of a change in control, as defined in the 2013 Omnibus Incentive Plan, or such other event as the compensation committee may designate at the time of grant or thereafter.

158

Restricted Stock

The compensation committee may award shares of restricted stock. Except as otherwise provided by the compensation committee upon the award of restricted stock, the recipient generally has the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The compensation committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period.

Recipients of restricted stock are required to enter into a restricted stock agreement with us that states the restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse.

If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the compensation committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances. Section 162(m) of the Internal Revenue Code requires that performance awards be based upon objective performance measures. The performance goals for performance-based restricted stock will be based on one or more of the objective criteria set forth on Exhibit A to the 2013 Omnibus Incentive Plan and are discussed in general below.

Other Stock-Based Awards

The compensation committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock and deferred stock units under the 2013 Omnibus Incentive Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The compensation committee may determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals for purposes of compliance with Section 162(m) of the Internal Revenue Code and/or a minimum vesting period. The performance goals for performance-based other stock-based awards will be based on one or more of the objective criteria set forth on Exhibit A to the 2013 Omnibus Incentive Plan and discussed in general below.

Other Cash-Based Awards

The compensation committee may grant awards payable in cash. Cash-based awards will be in such form, and dependent on such conditions, as the compensation committee will determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the compensation committee may accelerate the vesting of such award in its discretion.

159

Performance Awards

The compensation committee may grant a performance award to a participant payable upon the attainment of specific performance goals. The compensation committee may grant performance awards that are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code as well as performance awards that are not intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the Compensation Committee. Based on service, performance and/or other factors or criteria, the compensation committee may, at or after grant, accelerate the vesting of all or any part of any performance award.

Performance Goals

The compensation committee may grant awards of restricted stock, performance awards, and other stock-based awards that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code. These awards may be granted, vest and be paid based on the attainment of specified performance goals established by the compensation committee. These performance goals may be based on the attainment of a certain target level of, or a specified increase or decrease in, one or more of the following measures selected by the compensation committee: (1) earnings per share; (2) operating income; (3) gross income; (4) net income, before or after taxes; (5) cash flow; (6) gross profit; (7) gross profit return on investment; (8) gross margin return on investment; (9) gross margin; (10) operating margin; (11) working capital; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) revenue growth; (21) annual recurring revenues; (22) recurring revenues; (23) license revenues; (24) sales or market share; (25) total shareholder return; (26) economic value added; (27) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the compensation committee; (28) the fair market value of a share of our common stock; (29) the growth in the value of an investment in our common stock assuming the reinvestment of dividends; or (30) reduction in operating expenses.

To the extent permitted by law, the compensation committee may also exclude the impact of an event or occurrence which the compensation committee determines should be appropriately excluded, such as (1) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (2) an event either not directly related to our operations or not within the reasonable control of management; or (3) a change in accounting standards required by generally accepted accounting principles.

Performance goals may also be based on an individual participant’s performance goals, as determined by the compensation committee.

In addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The compensation committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

160

Change in Control

In connection with a change in control, as defined in the 2013 Omnibus Incentive Plan, the compensation committee may accelerate vesting of outstanding awards under the 2013 Omnibus Incentive Plan. In addition, such awards may be, in the discretion of the committee, (1) assumed and continued or substituted in accordance with applicable law; (2) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the awards; or (3) cancelled if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. The compensation committee may also provide for accelerated vesting or lapse of restrictions of an award at any time.

Stockholder Rights

Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock, a participant has no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.

Amendment and Termination

Notwithstanding any other provision of the 2013 Omnibus Incentive Plan, our board of directors may at any time amend any or all of the provisions of the 2013 Omnibus Incentive Plan, or suspend or terminate it entirely, retroactively or otherwise, subject to stockholder approval in certain instances; provided, however, that, unless otherwise required by law or specifically provided in the 2013 Omnibus Incentive Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.

Transferability

Awards granted under the 2013 Omnibus Incentive Plan generally are nontransferable, other than by will or the laws of descent and distribution, except that the committee may provide for the transferability of nonqualified stock options at the time of grant or thereafter to certain family members.

Recoupment of Awards

The 2013 Omnibus Incentive Plan provides that awards granted under the 2013 Omnibus Incentive Plan are subject to any recoupment policy that we may have in place or any obligation that we may have regarding the clawback of “incentive-based compensation” under the Securities Exchange Act of 1934 or under any applicable rules and regulations promulgated by the Securities and Exchange Commission.

Effective Date and Term

The 2013 Omnibus Incentive Plan was adopted by the board of directors on                     , 2013 and approved by shareholders on                     , 2013. No award will be granted under the 2013 Omnibus Incentive Plan on or after                     , 2023. Any award outstanding under the 2013 Omnibus Incentive Plan at the time of termination will remain in effect until such award is exercised or has expired in accordance with its terms.

161

Director Compensation

The following table shows the compensation earned during the fiscal year ended December 31, 2012, by each of our directors who are not Named Executive Officers.

Director Compensation Table For the Year Ended December 31, 2012

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Alan Fishman	$	300,000		—		—		—		—		—	$	300,000

Narrative Disclosure Regarding Director Compensation Table

None of our directors, other than Alan Fishman, received any compensation from us for service on the board of directors. Ladder Capital Finance LLC has entered into a director agreement with Alan Fishman, which provides Alan Fishman with a $300,000 fee per year for being our Chairman, and which terminates upon written notice by Alan Fishman or TowerBrook and GI Partners or upon sale of the Company.

Compensation Policies and Practices as They Relate to Risk Management

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respect areas of oversight. In particular, the risk and underwriting committee is responsible for monitoring and assessing strategic risk exposure, our major financial risk exposures and the steps our management has taken to monitor and control these exposures, reviewing with management the process by which risk assessment and management is undertaken, and monitoring compliance with legal and regulatory requirements. Our audit committee is responsible for reviewing the adequacy and effectiveness of our internal controls over financial reporting with our independent auditors. Our compensation committee assesses and monitors whether any of our compensation policies and programs are reasonably likely to have a material adverse effect on the Company.

Compensation Committee Interlocks and Insider Participation

No member of the compensation committee is or has been one of our officers or employees or has had any relationship with us requiring disclosure under the SEC’s rules and regulations.

162

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Amended and Restated Limited Liability Limited Partnership Agreement of LCFH

As a result of the Reorganization Transactions and Offering Transactions, Ladder Capital Corp will hold LP Units in LCFH and will be the General Partner of LCFH. Accordingly, Ladder Capital Corp will operate and control all of the business and affairs of LCFH and, through LCFH and its operating entity subsidiaries, conduct our business.

Immediately prior to this offering, the limited liability limited partnership agreement of LCFH will be amended and restated to, among other things, designate Ladder Capital Corp as the General Partner of LCFH and establish the LP Units. Under the LLLP agreement, Ladder Capital Corp has the right to determine when distributions will be made to unitholders of LCFH and the amount of any such distributions. If a distribution is authorized, such distribution will be made to the holders of LP Units pro rata in accordance with the percentages of their respective limited partnership interests.

The LLLP Agreement will also provide that, from time to time, typically once a             , existing holders of LP Units (or certain transferees thereof) will have the right to exchange an equal number of LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any Class B shares exchanged pursuant to the exchange provisions of the LLLP Agreement will be cancelled.

The unitholders of LCFH, including Ladder Capital Corp, will incur U.S. federal, state and local income taxes on their proportionate share of any taxable income of LCFH. Net profits and net losses of LCFH will generally be allocated to its unitholders (including Ladder Capital Corp) pro rata in accordance with their respective share of the net profits and net losses of LCFH. The amended and restated LLLP agreement will provide for cash distributions, which we refer to as “tax distributions,” to the holders of the LP Units if Ladder Capital Corp, as the General Partner of LCFH, determines that the taxable income of the relevant unitholder will give rise to taxable income for such holder. Generally, these tax distributions will be computed based on our estimate of the taxable income of LCFH allocable to a holder of LP Units multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses and the character of our income). Tax distributions will be made only to the extent all distributions from LCFH for the relevant year were insufficient to cover such tax liabilities. Any distributions will be subject to available cash and applicable law and contractual restrictions (including pursuant to our debt instruments).

Contribution Agreement with Michael Mazzei

During June 2012, LCFH entered into a Contribution Agreement with Michael Mazzei and a Mazzei Trust pursuant to which (i) Mazzei Trust purchased 24,193.55 of LCFH’s Series B participating preferred units for $3 million and (ii) LCFH granted to Michael Mazzei a one-year option to purchase up to 24,193.55 of its Series B participating preferred units at an exercise price of $124.00 per Series B participating preferred unit. Mr. Mazzei exercised his option in respect of 14,516.13 Series B Participating Preferred Units on May 29, 2013 at an exercise price of $124 per unit. The remaining options held by Mr. Mazzei terminated on May 29, 2013.

163

Employment Agreements

During January 2013, Ladder Capital Finance LLC entered into an amended and restated employment agreement with Mr. Harris, which will remain in effect until Mr. Harris ceases to be an employee of Ladder Capital Finance LLC. If Mr. Harris’ employment is terminated by Ladder Capital Finance LLC without cause or if Mr. Harris’ resigns for good reason, then (i) he is entitled under his employment agreement to receive severance payments of up to $5.0 million and to continue to receive certain employee benefits for one year following his termination date and (ii) he will only be subject to non-competition and non-solicitation provisions for a one-year period post-employment if Ladder Capital Finance LLC elects to pay him an additional $5.0 million.

During September 2008, Ladder Capital Finance LLC entered into a four-year employment agreement with each of Greta Guggenheim, Pamela McCormack and Robert Perelman, with each such employment agreement automatically renewing for one-year terms unless a non-renewal notice is provided by either party. If Greta Guggenheim’s, Pamela McCormack’s or Robert Perelman’s employment is terminated by Ladder Capital Finance LLC without cause or if she or he resigns for good reason, then she or he will only be subject to non-competition and non-solicitation provisions for up to six months post-employment to the extent that Ladder Capital Finance LLC elects to continue to pay her or his base salary and provides her or him with certain employee benefits during such period.

During October 2008, Ladder Capital Finance LLC entered into a four-year employment agreement with Marc Fox (which employment agreement was amended during January 2013), which automatically renews for one-year terms unless a non-renewal notice is provided by either party. If Mr. Fox ceases to be employed by Ladder Capital Finance LLC, then he will be entitled to continue to receive his base salary and certain employee benefits for a period of up to 90 days following his termination date. Further, following his separation from Ladder Capital Finance LLC, Mr. Fox agrees that he will not compete with Ladder Capital Finance LLC for a period of 60 days.

During October 2010, Ladder Capital Finance LLC entered into a four-year employment agreement with Thomas Harney (which employment agreement was amended during January 2013), which automatically renews for one-year terms unless a non-renewal notice is provided by either party. If Mr. Harney ceases to be employed by Ladder Capital Finance LLC, then he will be entitled to continue to receive his base salary and certain employee benefits for a period of up to 180 days following his termination date. Further, following his separation from Ladder Capital Finance LLC, Mr. Harney agrees that he will not compete with Ladder Capital Finance LLC for a period of 60 days.

During 2012, Ladder Capital Finance LLC entered into an employment agreement with Michael Mazzei, which will remain in effect until Mr. Mazzei ceases to be an employee of Ladder Capital Finance LLC. If Mr. Mazzei’s employment is terminated by Ladder Capital Finance LLC without cause or Mr. Mazzei resigns with good reason, then (i) he will be entitled to continue to receive his base salary and certain employee benefits for a period of up to one year following his termination date as well as a pro rata bonus (if any) with respect to the fiscal year in which such termination of employment occurs and (ii) he will only be subject to non-competition and certain non-solicitation provisions for a one-year period post-employment if Ladder Capital Finance LLC elects to pay him an additional $1.5 million.

164

Director Agreement with Alan Fishman

Ladder Capital Finance LLC has entered into a director agreement with Alan Fishman, which provides Alan Fishman with a $300,000 fee per year for being Chairman of Ladder, and which terminates upon written notice by Alan Fishman or TowerBrook and GI Partners or upon sale of LCFH.

2008 Incentive Equity Plan and Equity Grant Agreements

Under our 2008 Incentive Equity Plan, as amended, we have entered into equity grant agreements with certain of our executives and directors. The equity grant agreements provide the grantees with our Class A-2 common units and, in one case, our Series B participating preferred units that vest over time. These Class A-2 common units and Series B participating preferred units are forfeitable upon certain events such as termination of employment and are subject to certain accelerated vesting upon certain events such as a sale of the Company. Subject to certain requirements, we have the right under the 2008 Incentive Equity Plan to repurchase Class A-2 common units and Series B participating preferred units granted under the equity grant agreements following the termination of employment or directorship of the applicable executive or director. Forfeiture provisions and repurchase rights under our equity grant agreements will apply to LP Units issued to the existing owners of LCFH in the Reorganization Transactions.

Meridian Loan Referral Agreement

Ladder Capital Finance LLC and Meridian Capital Group LLC are parties to a Loan Referral Agreement pursuant to which Meridian Capital Group LLC may be entitled to receive from Ladder Capital Finance LLC certain fees for any commercial real estate loan originated by Ladder Capital Finance LLC as a result of a referral of a prospective commercial real estate loan from Meridian Capital Group LLC.

Registration Rights Agreement

Effective upon consummation of this offering, we will enter into an amended and restated registration rights agreement pursuant to which we may be required to register the sale of shares of our Class A common stock held by certain existing unitholders of LCFH upon exchange of LP Units held by them. Under the registration rights agreement, certain of the existing unitholders of LCFH have the right to request us to register the sale of their shares and may require us to make available shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition, certain of the existing unitholders of LCFH will have the ability to exercise certain piggyback registration rights in connection with registered offerings requested by any of such holders or initiated by us.

Tax Receivable Agreement

The existing owners of LCFH may from time to time (subject to the terms of the LLLP Agreement regarding exchange rights) cause LCFH to exchange an equal number of LP Units and shares of Class B common stock for shares of Class A common stock of Ladder Capital Corp on a one—for—one basis. LCFH (and each of its subsidiaries classified as a partnership for federal income tax purposes) intends to make an election under Section 754 of the Code effective for the taxable year in which the initial purchase occurs and each subsequent taxable year in which an exchange of LP Units and shares of Class B common stock for shares of Class A common stock occurs. The exchanges of LP Units and shares of Class B common stock for shares of Class A common stock are expected to result, with respect to Ladder Capital Corp, in increases in the tax basis of the assets of LCFH that otherwise would not have been available. These increases in tax

165

basis may reduce the amount of tax that Ladder Capital Corp would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets.

We will enter into a tax receivable agreement with certain existing holders of LP Units that will provide for the payment from time to time by Ladder Capital Corp to such persons of 85% of the amount of the benefits, if any, that Ladder Capital Corp realizes or under certain circumstances (such as a change of control) is deemed to realize as a result of (i) the aforementioned increases in tax basis (ii) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (iii) any deemed interest deductions arising from payments made by us under the tax receivable agreement. These payment obligations are obligations of Ladder Capital Corp and not of LCFH. For purposes of the tax receivable agreement, subject to certain exceptions noted below, the benefit deemed realized by Ladder Capital Corp generally will be computed by comparing the actual income tax liability of Ladder Capital Corp (calculated with certain assumptions) to the amount of such taxes that Ladder Capital Corp would have been required to pay had there been no increase to the tax basis of the assets of LCFH as a result of the purchases or exchanges of LP Units and had Ladder Capital Corp not derived any tax benefits in respect of payments made under the tax receivable agreement. The term of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless (i) Ladder Capital Corp exercises its right to terminate the tax receivable agreement for an amount based on the present value of the agreed payments remaining to be made under the agreement or (ii) Ladder Capital Corp breaches any of its material obligations under the tax receivable agreement in which case all obligations generally will be accelerated and due as if Ladder Capital Corp had exercised its right to terminate the agreement. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including:

• the timing of any subsequent exchanges of LP Units—for instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the depreciable or amortizable assets of LCFH at the time of each exchange;

• the price of shares of our Class A common stock at or around the time of the exchange—the increase in any tax deductions, as well as the tax basis increase in other assets, of LCFH is affected by the price of shares of our Class A common stock at the time of the exchange;

• the extent to which such exchanges are taxable—if an exchange is not taxable for any reason, increased deductions will not be available;

• the amount and timing of our income—Ladder Capital Corp generally will be required to pay 85% of the deemed benefits as and when deemed realized; and

• the allocation of basis increases among the assets of LCFH and certain tax elections affecting depreciation.

If LCFH does not have taxable income, Ladder Capital Corp generally is not required (absent circumstances requiring an early termination payment) to make payments under the tax receivable agreement for that taxable year because no benefit actually will have been realized. Nevertheless, any tax benefits that do not result in realized benefits in a given tax year likely will generate tax attributes that may be utilized to generate benefits in previous or future tax years and the utilization of such tax attributes will result in payments under the tax receivable

166

agreement. We expect that the payments that we may make under the tax receivable agreement will be substantial. Ladder Capital Corp will have the right to terminate the tax receivable agreement by making payments to the existing owners of LCFH calculated by reference to the present value of all future payments that the existing owners of LCFH would have been entitled to receive under the tax receivable agreement using certain valuation assumptions, including assumptions that any LP Units that have not been exchanged are deemed exchanged for the market value of the Class A common stock at the time of termination and that LCFH will have sufficient taxable income in each future taxable year to fully realize all potential tax savings. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, (a) the payments under the tax receivable agreement exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement and/or (b) distributions to Ladder Capital Corp by LCFH are not sufficient to permit Ladder Capital Corp to make payments under the tax receivable agreement after it has paid its taxes and other obligations. Ladder Capital Corp’s obligations pursuant to the tax receivable agreement will rank pari passu with its other general trade creditors. The payments under the tax receivable agreement are not conditioned upon any persons continued ownership of us.

The effects of the tax receivable agreement on our consolidated balance sheet as a result of our purchase of LP Units with our proceeds from this offering are as follows:

• we will record an increase of $         in deferred tax assets (or $         if the underwriters exercise their option to purchase additional shares) for the estimated income tax effects of the increase in the tax basis of the assets owned by Ladder Capital Corp based on enacted federal, state and local income tax rates at the date of the transaction. To the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis of expected future earnings, we will reduce the deferred tax asset with a valuation allowance;

• we will record     % of the estimated realizable tax benefit resulting from (i) the increase in the tax basis of the purchased interests as noted above and (ii) certain other tax benefits related to entering into the tax receivable agreement; and

• we will record an increase to additional paid-in capital in an amount equal to the difference between the increase in deferred tax assets and the increase in liability due to the existing owners of LCFH under the tax receivable agreement. The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the tax receivable agreement have been estimated. All of the effects of changes in any of our estimates after the date of the purchase will be included in our net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income.

In certain instances, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement. The tax receivable agreement will provide that upon certain changes of control, or if, at any time, we elect an early termination of the tax receivable agreement, the amount of our (or our successor’s) obligations with respect to exchanged or acquired LP Units (whether exchanged or acquired before or after such transaction) would be based on certain assumptions. These assumptions will include the assumptions that (a) we will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement and (b) that the subsidiaries of LCFH will sell certain nonamortizable assets (and realize certain related tax benefits) no later than a specified date. Accordingly, payments under the tax receivable agreement may be made years in advance of the actual realization, if any, of the anticipated future tax benefits and may be significantly greater than the actual benefits we

167

realize in respect of the tax attributes subject to the tax receivable agreement. In case of an early termination, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity and there is no assurance that we will be able to finance these obligations. Moreover, payments under the tax receivable agreement will be based on the tax reporting positions that we determine in accordance with the tax receivable agreement. Although we are not aware of any issue that would cause the IRS to challenge a tax basis increase, we will not be reimbursed for any payments previously made under the tax receivable agreement if the IRS subsequently disallows part or all of the tax benefits that gave rise to such prior payments, although future payments under the tax receivable agreement will be reduced on account of such disallowances. As a result, in certain circumstances, payments could be made under the tax receivable agreement that are significantly in excess of the benefits that we actually realize in respect of (a) the increases in tax basis resulting from our purchases or exchanges of LP Units (b) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (c) any deemed interest deductions arising from our payments under the tax receivable agreement. Decisions made by the existing owners of LCFH in the course of running our business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments that we are required to make under the tax receivable agreement. For example, the earlier disposition of assets following an exchange or acquisition transaction generally will accelerate payments under the tax receivable agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase LCFH’s existing owners’ tax liability without giving rise to any obligations to make payments under the tax receivable agreement. Payments generally are due under the tax receivable agreement within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus          basis points from the due date (without extensions) of such tax return.

168

PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our Class A common stock and LP Units, for:

• each beneficial owner of more than 5% of any class of our outstanding shares;

• each of our named executive officers;

• each of our directors; and

• all of our executive officers, directors as a group.

The number of LP Units outstanding and percentage of beneficial ownership before this offering set forth below is based on the number of LP Units outstanding immediately prior to the consummation of the Offering Transactions after giving effect to the Reorganization Transactions. The number of shares of our Class A common stock and percentage of beneficial ownership after this offering set forth below is based on the shares of our Class A common stock outstanding after the Offering Transactions, assuming that all the vested and unvested LP Units outstanding after giving effect to the Reorganization Transactions and Offering Transactions, except those held by Ladder Capital Corp, together with all outstanding Class B common stock are exchanged into shares of our Class A common stock.

Beneficial ownership is determined in accordance with SEC rules. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The table set forth below reflects the inclusion of both vested and unvested LP Units. Except as otherwise indicated, the address for each of our principal stockholders is c/o Ladder Capital Finance Holdings LLLP, 345 Park Avenue, 8th Floor, New York, NY 10154.

	LP Units after giving effect to the Reorganization Transactions and before the Offering Transactions		Class A common stock owned after giving effect to the Reorganization Transactions and Offering Transactions(1)		Class A common stock owned after giving effect to the Reorganization Transactions and Offering Transactions, assuming exercise in full of the over- allotment option(1)
Name	Number	Percentage	Number	Percentage	Number	Percentage
Principal Stockholders:
Entities affiliated with GI Partners(2)
Entities affiliated with TowerBrook(3)
GP09 Ladder Limited Partnership(4)
OCP LCF Investment, Inc.(5)
Meridian LCF LLC(6)
Executive Officers, Directors:
Alan Fishman
Brian Harris and a Harris Trust(7)
Jonathan Bilzin(3)
Greta Guggenheim
Howard Park(2)
Michael Mazzei and a Mazzei Trust(8)
Thomas Harney
Executive Officers and Directors as a group (10 individuals)

169

(1) Assumes all vested and unvested LP Units and Class B common stock outstanding after the Reorganization Transactions and the Offering Transactions, except LP Units held by Ladder Capital Corp, are exchanged for shares of our Class A common stock.

(2) Includes LP Units owned by GI Ladder Holdco LLC, GI Ladder Holdco ECI Blocker, Inc. and GI Ladder Holdco UBTI Blocker, Inc. (collectively, the “GI Holdcos”), which are owned by GI Partners Fund III L.P., GI Partners Fund III-A L.P. and GI Partners Fund III-B L.P. GI Partners Fund III L.P., GI Partners Fund III-A L.P. and GI Partners Fund III-B L.P., three affiliated investment funds (collectively, the “GI Funds”) that are affiliates of GI Partners. GI Partners may be deemed to be the beneficial owner of LP Units beneficially owned by the GI Holdcos and the GI Funds , but disclaims such beneficial ownership pursuant to rules under the Securities Exchange Act of 1934, as amended. Mr. Park is a managing director of GI Partners, and may be deemed to be the beneficial owner of the securities so beneficially owned by the GI Holdcos and the GI Funds, but disclaim such beneficial ownership (except as to any pecuniary interest therein) pursuant to rules under the Securities Exchange Act of 1934, as amended. The address of the GI Holdcos and the GI Funds is c/o GI Partners, 2180 Sand Hill Road, Suite 210, Menlo Park, California 94025.

(3) Comprises LP Units owned by TCP Ladder Blocker, Inc. and TI II Ladder Holdings, LLC (collectively, the “TowerBrook Holdcos”). TCP Ladder Blocker, Inc. is owned by TowerBrook Investors II AIV, L.P. TI II Ladder Holdings, LLC is owned by TowerBrook Investors II, L.P. and TowerBrook Investors II Executive Fund, L.P. TowerBrook Investors II AIV, L.P., TowerBrook Investors II, L.P. and TowerBrook Investors II Executive Fund, L.P. (collectively, the “TowerBrook Funds”) are advised by TowerBrook. The natural persons that have voting or investment power over LP Units beneficially owned by the TowerBrook Holdcos and the TowerBrook Funds are Neal Moszkowski and Ramez Sousou. TowerBrook may be deemed to be the beneficial owner of LP Units beneficially owned by the TowerBrook Holdcos and the TowerBrook Funds, but disclaims such beneficial ownership pursuant to rules under the Securities Exchange Act of 1934, as amended. Mr. Bilzin is a managing director of TowerBrook and may be deemed to be the beneficial owner of LP Units beneficially owned by the TowerBrook Holdcos and the TowerBrook Funds, but disclaims such beneficial ownership (except as to any pecuniary interest therein) pursuant to rules under the Securities Exchange Act of 1934, as amended. The address of the TowerBrook Holdcos and the TowerBrook Funds is c/o TowerBrook Capital Partners L.P., 65 East 55th Street, 27th Floor, New York, New York 10022.

(4) GP09 Ladder Limited Partnership is owned by GP09 Ladder Holdings, Inc., GP09 GV Ladder Capital Ltd., GP09 PX Ladder Capital Ltd. and GP09 PX (LAPP) Ladder Capital Ltd., all of which are directly or indirectly owned by entities advised by Alberta Investment Management Corporation. The address for GP09 Ladder Limited Partnership is 1100 10830 Jasper Avenue, Edmonton, Alberta Canada, T5J 2B3.

(5) OCP LCF Investment, Inc. is owned by OCP LCF Holdings Inc., and OCP LCF Holdings Inc. is a wholly owned subsidiary of OMERS Administration Corporation. The address for OCP LCF Investment, Inc. is c/o OMERS Private Equity Inc., Royal Bank Plaza, Suite 2010, Toronto, Ontario, M5J 2J2.

(6) Comprises LP Units owned by Meridian LCF LLC. Meridian LCF LLC is indirectly owned by Meridian Capital Group, LLC. Ralph Herzka is the chief executive officer of Meridian Capital Group, LLC, and may be deemed to be the beneficial owner of LP Units beneficially owned by Meridian LCF LLC and Meridian Capital Group, LLC, but disclaims such beneficial ownership (except as to any pecuniary interest therein) pursuant to rules under the Securities Exchange Act of 1934, as amended. The address for Meridian LCF LLC and Meridian Capital Group, LLC is One Battery Park Plaza, 26th Floor, New York, New York 10024.

(7) All LP Units owned by Betsy A. Harris 2012 Family Trust were initially issued to Mr. Harris, and were subsequently transferred to Betsy A. Harris 2012 Family Trust. Mr. Harris is a trustee of Betsy A. Harris 2012 Family Trust.

(8) As of March 31, 2013, Michael Mazzei owned              LP Units, and Christina Mazzei and Caroline Mazzei Irrevocable Trust Dated 9/3/2009 owned              LP Units. Pursuant to an equity grant agreement that Mr. Mazzei entered with the Company in June 2012, Mr. Mazzei exercised his option in respect of 14,516.13 Series B Participating Preferred Units on May 29, 2013 at an exercise price of $124 per unit. The remaining options held by Mr. Mazzei terminated on May 29, 2013.

170

DESCRIPTION OF CAPITAL STOCK

The following is a description of the material terms of our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect upon consummation of this offering. We refer you to our amended and restated certificate of incorporation and amended and restated bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus forms a part.

Authorized Capitalization

Upon completion of this offering, our authorized capital stock will consist of              shares of Class A common stock, par value $0.001 per share, of which              shares will be issued and outstanding,              shares of Class B common stock, par value $0.001 per share, of which              shares will be issued and outstanding, and              shares of preferred stock, par value $0.001 per share, none of which will be issued and outstanding.

Unless our board of directors determines otherwise, we will issue all shares of our capital stock in uncertificated form.

Class A Common Stock

Voting Rights

Holders of shares of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. The holders of Class A common stock do not have cumulative voting rights in the election of directors.

Dividend Rights

Subject to the rights of the holders of any preferred stock that may be outstanding and any contractual or statutory restrictions, holders of our Class A common stock are entitled to receive equally and ratably, share for share, dividends as may be declared by our board of directors out of funds legally available to pay dividends. Dividends upon our Class A common stock may be declared by the board of directors at any regular or special meeting, and may be paid in cash, in property, or in shares of capital stock. Before payment of any dividend, there may be set aside out of any of our funds available for dividends, such sums as the board of directors deems proper as reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any of our property, or for any proper purpose, and the board of directors may modify or abolish any such reserve.

Liquidation Rights

Upon liquidation, dissolution, distribution of assets or other winding up, the holders of Class A common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock.

Other Matters

The shares of Class A common stock have no preemptive or conversion rights and are not subject to further calls or assessment by us. There are no redemption or sinking fund provisions applicable to the Class A common stock. All outstanding shares of our Class A common stock, including the Class A common stock offered in this offering, are fully paid and non—assessable.

171

Class B Common Stock

Voting Rights

Holders of shares of Class B common stock are entitled to one vote for each share held of record by such holder and all matters submitted to a vote of stockholders. Accordingly, the existing owners of LCFH will, as holders of Class B common stock, collectively have a number of votes in Ladder Capital Corp that is equal to the aggregate number of LP Units that they hold. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law.

No Dividend or Liquidation Rights

Holders of our Class B common stock do not have any right to receive dividends or to receive a distribution upon a liquidation or winding up of Ladder Capital Corp.

Exchange for Class A Common Stock

Pursuant to the LLLP Agreement, the existing owners of LCFH may from time to time beginning 181 days after the date of this prospectus (subject to the conditions therein) exchange an equal number of LP Units and Class B common stock for shares of our Class A common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications. See “Certain Relationships and Related Party Transactions—Amended and Restated Limited Liability Limited Partnership Agreement of LCFH.”

Preferred Stock

Our certificate of incorporation authorizes our board of directors to establish one or more series of preferred stock and to determine, with respect to any series of preferred stock, the terms and rights of that series, including:

• the designation of the series;

• the number of shares of the series which our board may, except where otherwise provided in the preferred stock designation, increase or decrease, but not below the number of shares then outstanding;

• whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;

• the dates at which dividends, if any, will be payable;

• the redemption rights and price or prices, if any, for shares of the series;

• the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;

• the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding—up of the affairs of our company, or upon any distribution of assets of our company;

• whether the shares of the series will be convertible into shares of any other class or series, or any other security, of our company or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;

172

• the preferences and special rights, if any, of the series and the qualifications and restrictions, if any, of the series;

• the voting rights, if any, of the holders of the series; and

• such other rights, powers and preferences with respect to the series as our board of directors may deem advisable.

Authorized but Unissued Capital Stock

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NYSE, which would apply if and for so long as our Class A common stock is listed on the NYSE, require stockholder approval of certain issuances (other than a public offering) equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Class A common stock, as well as for certain issuances of stock in compensatory transactions. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. One of the effects of the existence of unissued and unreserved Class A common stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of Class A common stock at prices higher than prevailing market prices.

Anti–Takeover Effects of Certain Provisions of Delaware Law and our Certificate of Incorporation and Bylaws

Certain provisions of our certificate of incorporation and bylaws, which are summarized in the following paragraphs, may have an anti—takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.

Undesignated Preferred Stock

The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us or otherwise effect a change in control of us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

No Cumulative Voting

The Delaware General Corporation Law, or DGCL, provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our certificate of incorporation provides otherwise. Our certificate of incorporation prohibits cumulative voting.

Calling of Special Meetings of Stockholders

Our bylaws provide that special meetings of our stockholders may be called at any time only by the chief executive officer or the board of directors.

173

Stockholder Action by Written Consent

The DGCL permits stockholder action by written consent unless otherwise provided by our certificate of incorporation. Our certificate of incorporation precludes stockholder action by written consent.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide us with certain information. Our bylaws allow the presiding officer at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed.

These provisions may defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

Removal of Directors; Vacancies

Our certificate of incorporation provides that directors may be removed with or without cause upon the affirmative vote of holders of at least a majority of the voting power of all the then outstanding shares of stock entitled to vote generally in the election of directors. In addition, our bylaws provide that any newly–created directorship on the board of directors that results from an increase in the number of directors and any vacancy occurring on the board of directors shall be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

Delaware Anti—Takeover Statute

We are subject to Section 203 of the DGCL. Subject to specified exceptions, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder. “Business combinations” include mergers, asset sales and other transactions resulting in a financial benefit to the “interested stockholder.” Subject to various exceptions, an “interested stockholder” is a person who together with his or her affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s outstanding voting stock. These restrictions generally prohibit or delay the accomplishment of mergers or other takeover or change in control attempts.

Limitations on Liability and Indemnification of Officers and Directors

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties. Our certificate of incorporation includes a provision that eliminates the personal liability of directors for monetary damages for breach of fiduciary duty as a director, except:

• for breach of duty of loyalty;

• for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;

• under Section 174 of the DGCL (unlawful dividends); or

• for transactions from which the director derived improper personal benefit.

174

Our certificate of incorporation and bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by the DGCL. We are also expressly authorized to, and do, carry directors’ and officers’ insurance providing coverage for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We have entered into indemnification agreements with each of our directors and officers providing for additional indemnification protection beyond that provided by the directors’ and officers’ liability insurance policy. In the indemnification agreements, we have agreed, subject to certain exceptions, to indemnify and hold harmless the director or officer to the maximum extent then authorized or permitted by the provisions of the certificate of incorporation, the DGCL, or by any amendment(s) thereto.

There is currently no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Corporate Opportunity

Neither TowerBrook nor GI Partners have any obligation to offer us an opportunity to participate in business opportunities presented to TowerBrook or GI Partners even if the opportunity is one that we might reasonably have pursued, and neither TowerBrook nor GI Partners will be liable to us or our stockholders for breach of any duty by reason of any such activities unless, in the case of any person who is our director or officer, such business opportunity is expressly offered to such director or officer solely in his or her capacity as our officer or director. Stockholders will be deemed to have notice of and consented to this provision of our certificate of incorporation.

Choice of Forum

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a breach of fiduciary duty; (c) any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws; or (d) any action asserting a claim against us that is governed by the internal affairs doctrine. However, several lawsuits involving other companies are currently pending challenging the validity of choice of forum provisions in certificates of incorporation, and it is possible that a court could rule that such provision is inapplicable or unenforceable.

Transfer Agent and Registrar

The transfer agent and registrar for our Class A common stock will be American Stock Transfer & Trust Company, LLC.

New York Stock Exchange Listing

We intend to apply to list our Class A common stock on the NYSE under the symbol “LADR.”

175

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our Class A common stock. No prediction can be made as to the effect, if any, future sales of shares, or the availability for future sales of shares, will have on the market price of our Class A common stock prevailing from time to time. The sale of substantial amounts of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our Class A common stock.

Currently, 1,000 shares our Class A common stock are outstanding and owned by LCFH and no shares of our Class B common stock are outstanding. In connection with the offering, all 1,000 shares of our Class A common stock held by LCFH will be canceled. Prior to the purchase by Ladder Capital Corp of LP Units with the proceeds of this offering, we intend to cause LCFH to distribute Class B common stock to each holder of LP Units in an amount equal to the number of LP Units held by such existing unitholder with any shares of Class B common stock not so distributed to be retained in treasury by LCFH. There are currently            unitholders of LCFH. Upon consummation of this offering, we will have outstanding            shares of Class A common stock (or a maximum of              shares of Class A common stock if the underwriters exercise their over-allotment option to purchase additional shares). The shares of Class A common stock sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any Class A common stock held by our “affiliates,” as defined in Rule 144, which would be subject to the limitations and restrictions described below.

In addition, pursuant to certain provisions of the amended and restated LLLP Agreement, the existing unitholders of LCFH can from time to time beginning 181 days after the date of this prospectus, typically once a             , exchange with LCFH an equal number of LP Units and Class B common stock for shares of Ladder Capital Corp Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Upon consummation of this offering, the existing owners of LCFH (other than Ladder Capital Corp or any of its subsidiaries) will hold            LP Units (or            LP Units if the underwriters exercise in full their option to purchase additional shares of Class A common stock), all of which will be exchangeable together with an equal number of shares of Class B common stock for shares of our Class A common stock. The shares of Class A common stock we issue upon such exchanges would be “restricted securities” as defined in Rule 144 unless we register such issuances. However, we will enter into one or more registration rights agreements with certain of the existing owners of LCFH that will require us to register under the Securities Act these shares of Class A common stock. See “—Registration Rights” and “Certain Relationships and Related Person Transactions—Registration Rights Agreement.”

Under the terms of the amended and restated LLLP agreement of LCFH, all of the LP Units received by the existing unitholders of LCFH in the Reorganization Transactions will be subject to restrictions on disposition. Additionally, consistent with the terms of the underlying unit grant agreements executed at the time of original grant, LP Units received by existing unitholders of LCFH will be subject to vesting and forfeiture on the same basis as the units which were exchanged for the LP Units.

In addition,              shares of Class A common stock may be granted under our 2013 Omnibus Incentive Plan. See “Executive and Director Compensation—Employee Benefit Plans—2013 Omnibus Incentive Plan.” We intend to file one or more registration statements on Form S-8 under the Securities Act to register Class A common stock issued or reserved for issuance under our stock incentive plan. Any such Form S-8 registration statement will automatically become effective upon filing. Accordingly, shares registered under such

176

registration statement will be available for sale in the open market, unless such shares are subject to vesting restrictions with us or the lock-up restrictions described below.

Registration Rights

Effective upon consummation of this offering, we will enter into an amended and restated registration rights agreement with certain of the existing unitholders of LCFH pursuant to which we will grant them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of our Class A common stock (and other securities convertible into or exchangeable or exercisable for shares of our Class A common stock) held or acquired by them. Such securities registered under any registration statement will be available for sale in the open market unless restrictions apply.

Lock-Up of our Class A common stock

We and certain of the existing unitholders of LCFH have agreed with the underwriters, subject to certain exceptions described below, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of our Class A common stock, or any options or warrants to purchase any shares of our Class A common stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of our Class A common stock, including any LP Units, or any such substantially similar securities, whether owned directly by such member (including holding as a custodian) or with respect to which such member has beneficial ownership within the rules and regulations of the SEC, during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. Currently, the underwriters have no current intention to release the aforementioned holders of our Class A common stock from the lock-up restrictions described above.

Our lock-up agreement will provide exceptions for, among other things, the issuance by us of securities pursuant to any employee benefit plan which may (by their express provisions or pursuant to any exchange offer) be or become exercisable, convertible or exchangeable for shares of our Class A common stock.

Rule 144

The shares of Class A common stock to be issued upon exchange of our New Class A common Units will be, when issued, “restricted” securities under the meaning of Rule 144 under the Securities Act, and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemption provided by Rule 144.

In general, under Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an “affiliate” of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those securities, subject only to the availability of current public information about us. As defined in Rule 144, an “affiliate” of an issuer is a person that directly, or indirectly, through one or more intermediaries, controls, or is under common control with the issuer. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those securities without regard to the provisions of Rule 144.

177

A person (or persons whose securities are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of securities that does not exceed the greater of one percent of the then outstanding shares of securities of such class or the average weekly trading volume of securities of such class during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us (which requires that we are current in our periodic reports under the Exchange Act).

178

U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

The following is a summary of material U.S. federal income tax consequences to non-U.S. holders, as defined below, of the purchase, ownership and disposition of shares of our Class A common stock. This summary deals only with non-U.S. holders of shares of Class A common stock that purchase the shares in this offering and will hold such shares as capital assets within the meaning of section 1221 of the Code.

For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of shares of our Class A common stock that, for U.S. federal income tax purposes, is not any of the following:

• an individual who is a citizen or resident of the United States;

• a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.

This summary is based upon provisions of the U.S. Internal Revenue Code of 1986, as amended, or the Code, U.S. Treasury regulations promulgated under the Code, rulings and other administrative pronouncements, and judicial decisions, all as of the date hereof. These authorities are subject to different interpretations and may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. This summary does not address all aspects of U.S. federal income taxation and does not deal with non-U.S., state, local, alternative minimum, estate and gift, or other tax considerations that may be relevant to non-U.S. holders in light of their particular circumstances. In addition, this summary does not describe the U.S. federal income tax consequences applicable to you if you are subject to special treatment under U.S. federal income tax laws (including if you are a U.S. expatriate or subject to the U.S. anti-inversion rules, a bank or other financial institution, an insurance company, a tax-exempt organization, a broker, dealer, or trader in securities or currencies, a regulate investment company, a real estate investment trust, a “controlled foreign corporation,” a “passive foreign investment company,” a partnership or other pass-through entity for U.S. federal income tax purposes (or an investor in such a pass-through entity), a person who acquired shares of our common stock as compensation or otherwise in connection with the performance of services, or a person who has acquired shares of our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment). We cannot assure you that a change in law will not significantly alter the tax considerations described in this summary.

We have not and will not seek any rulings from the U.S. Internal Revenue Service, or the IRS, regarding the matters discussed below. There can be no assurance that the IRS will not take positions concerning the tax consequences of the ownership or disposition of shares of our Class A common stock that differ from those discussed below.

If any entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares of our Class A common stock, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partner and the partnership. If you are a partner of a partnership holding shares of our Class A common stock, you should consult your tax advisors.

179

This summary is for general information only and is not intended to constitute a complete description of all tax consequences for non-U.S. holders relating to the ownership and disposition of shares of our Class A common stock. If you are considering the purchase of shares of our Class A common stock, you should consult your tax advisors concerning the particular U.S. federal income tax consequences to you of the ownership and disposition of shares of our Class A common stock, as well as the consequences to you arising under the laws of any other applicable taxing jurisdiction in light of your particular circumstances.

Dividends

In general, cash distributions on shares of our Class A common stock will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent any such distributions exceed both our current and our accumulated earnings and profits, they will first be treated as a return of capital reducing your tax basis in our Class A common stock, but not below zero, and thereafter will be treated as gain from the sale of stock, the treatment of which is discussed under “Gain on Disposition of Shares of Class A Common Stock.”

Dividends paid to a non-U.S. holder generally will be subject to a U.S. withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty. A non-U.S. holder of shares of our Class A common stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends generally will be required (a) to complete IRS Form W-8BEN (or other applicable form) and certify under penalty of perjury that such holder is not a U.S. person as defined under the Code and is eligible for treaty benefits, or (b) if such holder’s shares of our Class A common stock are held through certain foreign intermediaries or foreign partnerships, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. This certification must be provided to us or our paying agent prior to the payment to you of any dividends and must be updated periodically.

Dividends paid to a non-U.S. holder that are effectively connected with the conduct of a trade or business within the United States by such non-U.S. holder (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment) generally will not be subject to the aforementioned withholding tax, provided certain certification and disclosure requirements are satisfied (including providing a properly completed IRS Form W-8ECI). Instead, such dividends generally will be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code. A non-U.S. holder that is treated as a corporation for U.S. federal income tax purposes may be subject to an additional “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on earnings and profits attributable to dividends that are effectively connected with its conduct of a U.S. trade or business (and, if an income tax treaty applies, are attributable to its U.S. permanent establishment).

A non-U.S. holder of shares of our Class A common stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

180

Gain on Disposition of Shares of Class A Common Stock

Subject to the discussions below on the backup withholding tax and the FATCA legislation, any gain realized by a non-U.S. holder on the sale or other disposition of shares of our Class A common stock generally will not be subject to U.S. federal income tax unless:

• the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment);

• the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or

• we are or have been a U.S. real property holding corporation for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held shares of our common stock.

In the case of a non-U.S. holder described in the first bullet point above, any gain generally will be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code, and a non-U.S. holder that is a foreign corporation may also be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits attributable to such gain (or, if an income tax treaty applies, at such lower rate as may be specified by the treaty on its gains attributable to its U.S. permanent establishment). Except as otherwise provided by an applicable income tax treaty, an individual non-U.S. holder described in the second bullet point above will be subject to a 30% tax on any gain derived from the sale or disposition, which may be offset by certain U.S. source capital losses provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses, even though the individual is not considered a resident of the United States under the Code. We believe we are not and, although no assurance can be given, do not anticipate becoming a U.S. real property holding corporation for U.S. federal income tax purposes. If we are, or become, a U.S. real property holding corporation, then, as long as our Class A common stock is regularly traded on an established securities market, any gain from the sale or other taxable disposition of our Class A common stock will not be subject to the 10% withholding tax on the disposition of a U.S. real property interest unless a non-U.S. holder owns more than 5% of all our outstanding Class A common stock at any time within the time period described above. You should consult your own tax advisor about the consequences that could result if we are, or become, a U.S. real property holding corporation.

Information Reporting and Backup Withholding

The amount of dividends paid to each non-U.S. holder, and the tax withheld with respect to such dividends generally will be reported annually to the IRS and to each such holder, regardless of whether withholding was reduced or eliminated by an applicable tax treaty. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides or is established under the provisions of an applicable income tax treaty or agreement.

A non-U.S. holder generally will be subject to backup withholding for dividends paid to such holder unless such holder certifies under penalty of perjury (usually on an IRS Form W-8BEN) that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code), or such holder otherwise establishes an exemption. Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale of shares of our common stock within the United States or conducted through certain U.S.-related financial

181

intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Foreign Account Tax Compliance Act

Legislation and administrative guidance, which will be phased in beginning on January 1, 2014, the FATCA legislation, generally will impose a withholding tax of 30% on any dividends on our Class A common stock paid to certain “foreign financial institutions,” as specifically defined under such rules, unless such institution enters into an agreement with the U.S. government to, among other things, collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or another exception applies. The FATCA legislation will also generally impose a withholding tax of 30% on any dividends on our Class A common stock paid to a non-financial foreign entity unless such entity provides the withholding agent with either a certification that such entity does not have any substantial U.S. owners or a certification identifying the direct and indirect substantial U.S. owners of the entity and meets certain other specified requirements. Finally, beginning on January 1, 2017 withholding of 30% also generally will apply to the gross proceeds of a disposition of our Class A common stock paid to a foreign financial institution or to a non-financial foreign entity unless the reporting and certification requirements described above have been met or another exception applies. Under certain circumstances, a non-U.S. holder of our Class A common stock may be eligible for refunds or credits of such taxes. Investors are encouraged to consult with their tax advisors regarding the possible implications of the FATCA legislation on their investment in our Class A common stock.

THE SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS ABOVE IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. POTENTIAL PURCHASERS OF OUR CLASS A COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSIDERATIONS OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A COMMON STOCK.

182

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representatives Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC have severally agreed to purchase from us the following respective number of shares of Class A common stock at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:

Underwriters	Number of Shares
Deutsche Bank Securities Inc.
Citigroup Global Markets Inc.
Wells Fargo Securities, LLC
Merrill Lynch, Pierce, Fenner & Smith                     Incorporated
J.P. Morgan Securities LLC
Total

The underwriting agreement provides that the obligations of the several underwriters to purchase the shares of Class A common stock offered hereby are subject to certain conditions precedent and that the underwriters will purchase all of the shares of Class A common stock offered by this prospectus, other than those covered by the option to purchase additional shares described below, if any of these shares are purchased. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or this offering may be terminated.

We have agreed to indemnify the underwriters against some specified types of liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of any of these liabilities.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

We have been advised by the representatives of the underwriters that the underwriters propose to offer the shares of Class A common stock to the public at the public offering price set forth on the cover of this prospectus and to dealers at a price that represents a concession not in excess of $        per share under the public offering price. The underwriters may allow, and these dealers may re-allow, a concession of not more than $        per share to other dealers. After the initial public offering, representatives of the underwriters may change the offering price and other selling terms. This offering of the shares of Class A common stock by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

183

The underwriting discounts and commissions per share are equal to the public offering price per share of Class A common stock less the amount paid by the underwriters to us per share of Class A common stock. The underwriting discounts and commissions are    % of the initial public offering price. We have agreed to pay the underwriters the following discounts and commissions, assuming either no exercise or full exercise by the underwriters of the underwriters’ option to purchase additional shares:

		Total Fees
	Per Share	Without Exercise of Option to Purchase Additional Shares	With Full Exercise of Option to Purchase Additional Shares
Discounts and commissions            paid by us	$	$	$

In addition, we estimate that our share of the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $        . We have agreed with the underwriters to pay all fees and expenses related to the review and qualification of this offering by the Financial Industry Regulatory Authority, Inc. and “blue sky” expenses and the cost of any aircraft chartered in connection with the road show for this offering.

The representatives of the underwriters have advised us that the underwriters do not intend to confirm sales of more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Option to Purchase Additional Shares

We have granted to the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to purchase up to            additional shares of Class A common stock at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus. To the extent that the underwriters exercise this option, each of the underwriters will become obligated, subject to conditions, to purchase approximately the same percentage of these additional shares of Class A common stock as the number of shares of Class A common stock to be purchased by it in the above table bears to the total number of shares of Class A common stock offered by this prospectus. We will be obligated, pursuant to the option, to sell these additional shares of Class A common stock to the underwriters to the extent the option is exercised. If any additional shares of Class A common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the initial shares referred to in the above table are being offered.

No Sales of Similar Securities

Each of our officers, directors and director nominees, and all of our stockholders and holders of options and warrants to purchase our stock, have agreed not to offer, sell, contract to sell or otherwise dispose of, or enter into any transaction that is designed to, or could be expected to, result in the disposition of any shares of our Class A common stock or other securities convertible into or exchangeable or exercisable for shares of our Class A common stock or derivatives of our Class A common stock owned by these persons prior to this offering or Class A common stock issuable upon exercise of options or warrants held by these persons for a period of 180 days after the date of this prospectus without the prior written consent of Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. This consent may be given at any time without public notice. We have entered into a similar agreement with Deutsche Bank Securities Inc. and Citigroup Global Markets Inc., except that without such consent we may grant options and sell shares pursuant to our 2013 Incentive Equity Plan. There are no agreements between Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. and any of our stockholders or affiliates releasing them from these lock-up agreements prior to the expiration of the 180-day period.

184

Price Stabilization, Short Positions and Penalty Bids

In connection with this offering, the underwriters may purchase and sell shares of our Class A common stock in the open market. These transactions may include short sales, purchases to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares of Class A common stock from us in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares of Class A common stock pursuant to the option granted to them. “Naked” short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if underwriters are concerned that there may be downward pressure on the price of the shares in the open market prior to the completion of this offering. Stabilizing transactions consist of various bids for or purchases of our Class A common stock made by the underwriters in the open market prior to the completion of this offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the other underwriters a portion of the underwriting discount received by it because the representatives of the underwriters have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions may have the effect of preventing or slowing a decline in the market price of our Class A common stock. Additionally, these purchases, along with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our Class A common stock. As a result, the price of our Class A common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise.

New York Stock Exchange Listing

We intend to apply to list the shares of Class A common stock on the New York Stock Exchange under the symbol “LADR.”

Pricing of this Offering

Prior to this offering, there has been no public market for our Class A common stock. Consequently, the initial public offering price of our Class A common stock will be determined by negotiation among us and the representatives of the underwriters. Among the primary factors that will be considered in determining the public offering price are:

• prevailing market conditions;

• our results of operations in recent periods and our book value as of the end of the most recent period;

• the present stage of our development;

• the market capitalizations and stages of development of other companies that we and the representatives of the underwriters believe to be comparable to our business; and

185

• estimates of our business potential.

An active trading market for shares of Class A common stock may not develop. It is also possible that, after the offering, shares of Class A common stock will not trade in the public market at or above the initial public offering price.

Electronic Offer, Sale and Distribution of Shares

In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail. In addition, Deutsche Bank Securities Inc. may facilitate Internet distribution for this offering to certain of its Internet subscription customers. Deutsche Bank Securities Inc. may allocate a limited number of shares for sale to its online brokerage customers. A prospectus in electronic format is being made available on Internet web sites maintained by one or more of the lead underwriters of this offering and may be made available on web sites maintained by other underwriters. Other than the prospectus in electronic format, the information on any underwriter’s web site and any information contained in any other web site maintained by an underwriter is not part of the prospectus or the registration statement of which the prospectus forms a part.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. Examples include, but are not limited to:

• Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC acted as underwriters in connection with the offering of our Notes by two of our subsidiaries;

• Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, or certain of their affiliates, have had and may in the future have certain roles in connection with our securitizations, including but not limited to, as underwriter, co-manager, trustee, certificate administrator and/or master servicer;

• Deutsche Bank Securities, Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, or certain of their affiliates, are counterparties to financing arrangements with certain of our subsidiaries, including, as applicable, our existing revolving credit facility, master repurchase agreements relating to loans and/or securities, global master securities lending agreements and a master mortgage loan securities contract;

• Deutsche Bank Securities, Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, or certain of their affiliates, are counterparties to International Swap Dealers Association, Inc. Master Agreements with one of our subsidiaries;

• Affiliates of Wells Fargo Securities, LLC act as loan servicer for our conduit loans, document custodian for all of our loans and custodian for our managed account securities; and

• J.P. Morgan Securities LLC and its affiliates act as our prime broker and also provide us with securities pricing services.

From time to time, we may also co-fund commercial real estate mortgage loans or enter into other commercial real estate financing transactions with certain of the underwriters and/or their affiliates.

186

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. Additionally, certain of the underwriters and/or their affiliates may in the future be the seller, buyer or broker for our trades in securities issued by third parties. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Selling Restrictions

Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors, as defined in the Prospectus Directive) subject to obtaining the prior consent of the representative for any such offer; or

(c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms for the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including the PD 2010 Amending Directive to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression 2010 PD Amending Directive means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

This prospectus and any other material in relation to the shares described herein is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospective Directive (“qualified investors”) that also (i) have professional experience in matters relating to investments falling

187

within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order, (ii) who fall within Article 49(2)(a) to (d) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). The shares are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents.

Notice to Prospective Investors in Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (the “SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this prospectus nor any other offering or marketing material relating to the offering, the issuer, the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (the “FINMA”), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (the “CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

Notice to Prospective Investors in Hong Kong

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for

188

subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

Notice to Prospective Investors in Japan

Our securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “Financial Instruments and Exchange Law”) and our securities will not be offered or sold, directly or indirectly, in Japan, or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan, or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Notice to Prospective Investors in Qatar

The shares described in this prospectus have not been, and will not be, offered, sold or delivered, at any time, directly or indirectly in the State of Qatar in a manner that would constitute a public offering. This prospectus has not been, and will not be, registered with or approved by the Qatar Financial Markets Authority or Qatar Central Bank and may not be publicly distributed. This prospectus is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

Notice to Prospective Investors in Saudi Arabia

No offering, whether directly or indirectly, will be made to an investor in the Kingdom of Saudi Arabia unless such offering is in accordance with the applicable laws of the Kingdom of Saudi Arabia and the rules and regulations of the Capital Market Authority, including the Capital Market Law of the Kingdom of Saudi Arabia. The shares will not be marketed or sold in the Kingdom of Saudi Arabia by us or the underwriters.

This prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Office of Securities Regulation issued by the Capital Market Authority. The Saudi Arabian Capital Market Authority does not make any representation as to the accuracy or completeness of this prospectus and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus.

189

Prospective purchasers of the shares offered hereby should conduct their own due diligence on the accuracy of the information relating to the shares. If you do not understand the contents of this prospectus, you should consult an authorized financial advisor.

Notice to Prospective Investors in the United Arab Emirates

This offering has not been approved or licensed by the Central Bank of the United Arab Emirates (UAE), Securities and Commodities Authority of the UAE and/or any other relevant licensing authority in the UAE including any licensing authority incorporated under the laws and regulations of any of the free zones established and operating in the territory of the UAE, in particular the Dubai Financial Services Authority (DFSA), a regulatory authority of the Dubai International Financial Centre (DIFC). The offering does not constitute a public offer of securities in the UAE, DIFC and/or any other free zone in accordance with the Commercial Companies Law, Federal Law No 8 of 1984 (as amended), DFSA Offered Securities Rules and NASDAQ Dubai Listing Rules, accordingly, or otherwise. The shares may not be offered to the public in the UAE and/or any of the free zones.

The shares may be offered and issued only to a limited number of investors in the UAE or any of its free zones who qualify as sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned.

Notice to Prospective Investors in Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

190

MARKET, INDUSTRY AND OTHER DATA

This prospectus contains statistical data and estimates, including those relating to market size, competitive position and growth rates of the markets in which we participate, that we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions have been verified by any independent source.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed upon for us by Kirkland & Ellis LLP, New York, New York. Skadden, Arps, Slate, Meagher  & Flom LLP and Affiliates, New York, New York is representing the underwriters in this offering.

EXPERTS

The financial statements as of December 31, 2012 and December 31, 2011 and for each of the three years in the period ended December 31, 2012, the audited statements of revenue and certain expenses of the Abingdon, Aiken, Johnson City, Ooltewah, Palmview, Middleburg and Satsuma properties for the year ended December 31, 2011, and the balance sheet of Ladder Capital Corp as of May 30, 2013 included in this Prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of such firm as experts in auditing and accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Class A common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information about us and our Class A common stock offered hereby, we refer you to the registration statement and the exhibits and schedules filed thereto. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. Upon completion of this offering, we will be required to file periodic reports, proxy statements and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the Public Reference Room of the SEC, 100 F Street, N.E., Room 1580, Washington D.C. 20549. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that site is www.sec.gov.

191

INDEX TO FINANCIAL STATEMENTS

	Page
Audited financial statements of Ladder Capital Corp
Report of independent registered public accounting firm		F-2
Balance sheet as of May 30, 2013		F-3
Notes to balance sheet		F-4
Audited consolidated financial statements of LCFH
Report of independent registered public accounting firm		F-5
Consolidated balance sheets as of December 31, 2012 and 2011		F-6
Consolidated statements of income for the years ended December 31, 2012, 2011 and 2010		F-7
Consolidated statements of comprehensive income for the years ended December 31, 2012, 2011 and 2010		F-8
Consolidated statements of changes in capital for the years ended December 31, 2012, 2011 and 2010		F-9
Consolidated statements of cash flows for the years ended December 31, 2012, 2011 and 2010		F-10
Notes to consolidated financial statements		F-11
Unaudited consolidated financial statements of LCFH
Consolidated balance sheets as of March 31, 2013 and December 31, 2012		F-46
Consolidated statements of income for the three months ended March 31, 2013 and 2012		F-47
Consolidated statements of comprehensive income for the three months ended March 31, 2013 and 2012		F-48
Consolidated statements of changes in capital for the three months ended March 31, 2013		F-49
Consolidated statements of cash flows for the three months ended March 31, 2013, and 2012		F-50
Notes to consolidated financial statements		F-51
Financial Statement Schedules
Schedule III—Real estate and accumulated depreciation		S-1
Schedule IV—Mortgage loans on real estate		S-3

All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Board of Directors and Stockholders of Ladder Capital Corp

In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial position of Ladder Capital Corp at May 30, 2013 in conformity with accounting principles generally accepted in the United States of America. The balance sheet is the responsibility of the Company’s management. Our responsibility is to express an opinion on the balance sheet based on our audit. We conducted our audit of this statement in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

June 27, 2013

F-2

LADDER CAPITAL CORP

BALANCE SHEET

MAY 30, 2013

Asset	$	1
Cash
Commitments and Contingencies (Note 4)
Stockholder’s Equity
Common Stock, par value $0.001 per share, 1,000 shares authorized, 1,000 issued and outstanding	$	1
Total Stockholder’s Equity	$	1

The accompanying notes are an integral part of this financial statement

F-3

LADDER CAPITAL CORP

NOTES TO BALANCE SHEET

MAY 30, 2013

1.     ORGANIZATION AND INITIAL PUBLIC OFFERING

Ladder Capital Corp (the “Corporation”) was formed as a Delaware corporation on May 21, 2013. The Corporation intends to conduct an initial public offering of common stock (the “IPO”) anticipated to be finalized in 2013. The Corporation intends to use the net proceeds from the IPO to purchase newly issued LP Units from Ladder Capital Finance Holdings LLLP (“LCFH”) and pursuant to a reorganization into a holding corporation structure, the Corporation will become a holding corporation and its sole asset is expected to be a controlling equity interest in LCFH. The Corporation will be sole general partner of LCFH and will operate and control all of the business and affairs of LCFH and, through LCFH and its subsidiaries, continue to conduct the business now conducted by these subsidiaries. The proceeds received by LCFH in connection with the sale of newly issued LP Units will be used for loan origination, real estate businesses and for general corporate purposes.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The Balance Sheet has been prepared in accordance with accounting principles generally accepted in the United States of America. Separate statements of income, changes in stockholders’ equity and cash flows have not been presented in the financial statements because there have been no activities of this entity.

Use of Estimates

The preparation of the balance sheet in conformity with accounting principles generally accepted in the United States requires management 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 balance sheet. Actual results could differ from those estimates.

Cash

The Corporation maintains cash accounts at financial institutions, which are insured up to a maximum of $250,000. At May 30, 2013, the balance did not exceed the insured limits.

3.     STOCKHOLDER’S EQUITY

The Corporation is authorized to issue 1,000 shares of common stock, par value $0.001 per share (“Common Stock”). The Corporation has issued 1,000 shares of Common Stock in exchange for $1.00, all of which were held by LCFH at May 21, 2013.

4.     COMMITMENTS AND CONTINGENCIES

The Corporation may, from time to time, be a defendant in litigation arising in the normal course of business. Management does not expect the outcome of such litigation, it any, to have a material adverse effect on the financial position of the Corporation. In the normal course of business, the Corporation may, from time to time, enter into contracts or agreements with other parties that commit the Corporation to specific or contingent liabilities.

5.     SUBSEQUENT EVENTS

Subsequent events have been evaluated through June 27, 2013, the date the financial statements were available to be issued.

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Ladder Capital Finance Holdings LLLP

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, changes in capital and cash flows present fairly, in all material respects, the financial position of Ladder Capital Finance Holdings LLLP and its subsidiaries at December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 21 of this registration statement present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/    PRICEWATERHOUSECOOPERS LLP

New York, New York

March 28, 2013, except for Note 14, the Master Repurchase Agreement paragraph in Note 16, the financial statement schedules and the effects of the Registration paragraph described in Note 2 to the consolidated financial statements, as to which the date is April 29, 2013, and except for the earnings per unit information included in Note 15 and the consolidated statement of income, as to which the date is June 27, 2013.

F-5

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2012 AND 2011

	2012		2011
Assets
Cash and cash equivalents	$	43,795,663	$	83,350,445
Cash collateral held by broker		65,373,470		55,279,701
Real estate securities, available-for-sale:
Investment grade commercial mortgage backed securities		806,773,207		1,644,748,001
GN construction securities		51,842,317		31,695,186
GN permanent securities		108,807,295		145,643,134
FNMA securities		—		4,296,061
Interest only securities		158,138,700		118,688,069
Mortgage loan receivables held for investment, at amortized cost		326,318,550		255,196,384
Mortgage loan receivables held for sale		623,332,620		258,841,725
Real estate		380,021,672		28,834,713
Investment in equity method investee		12,674,652		9,726,130
FHLB stock		13,100,000		—
Derivative instruments		5,694,519		1,819
Due from brokers		1,901,713		218,690
Accrued interest receivable		12,082,604		11,764,524
Other assets		19,172,873		6,104,317
Total assets	$	2,629,029,855	$	2,654,388,899
Liabilities and Capital
Liabilities
Repurchase agreements	$	793,916,703	$	1,597,077,158
Long term financing		103,755,644		18,564,040
Borrowings from the FHLB		262,000,000		—
Senior unsecured notes		325,000,000		—
Due to broker		—		871,802
Derivative instruments		18,515,163		25,743,526
Accrued expenses		19,273,388		19,002,795
Other liabilities		5,379,088		4,067,175
Total liabilities		1,527,839,986		1,665,326,496
Commitments and contingencies
Capital
Partners’ capital
Series A Preferred Units		782,832,687		707,847,217
Series B Preferred Units		272,818,838		257,376,700
Common Units		44,956,178		23,713,486
Total Partners’ Capital		1,100,607,703		988,937,403
Noncontrolling interest		582,166		125,000
Total capital		1,101,189,869		989,062,403
Total liabilities and capital	$	2,629,029,855	$	2,654,388,899

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

F-6

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

	2012		2011			2010
Net interest income
Interest income	$	136,198,204	$	133,297,520		$	129,301,530
Interest expense		36,472,578		35,836,124			48,874,327
Net interest income		99,725,626		97,461,396			80,427,203
Other income
Operating lease income		8,331,338		2,290,291			1,011,631
Sale of securities, net		19,013,960		20,081,114			22,085,626
Sale of loans, net		154,613,009		66,270,758			30,532,843
Sale of real estate, net		1,275,235		—			2,419,423
Fee income		8,787,695		3,144,050			1,402,117
Total other income		192,021,237		91,786,213			57,451,640
Total net interest income and other income		291,746,863		189,247,609			137,878,843
Costs and expenses
Net result from derivative transactions		35,650,989		81,374,126			20,747,083
Operating expenses		72,623,705		35,525,977			26,740,448
Depreciation		3,640,619		1,043,732			408,489
Provision for loan losses		448,833		—			884,995
Total costs and expenses		112,364,146		117,943,835			48,781,015
Income before earnings from investment in equity method investee		179,382,717		71,303,774			89,097,828
Earnings from investment in equity method investee		1,256,109		346,612			—
Income before taxes		180,638,826		71,650,386			89,097,828
Tax expense		2,583,999		1,510,149			599,780
Net income		178,054,827		70,140,237			88,498,048
Net (income) loss attributable to noncontrolling interest		49,084		(15,625	)		—
Net income attributable to preferred and common unit holders	$	178,103,911	$	70,124,612		$	88,498,048
Earnings per common units:
Basic	$	1.70	$	0.77		$	1.21
Diluted	$	1.61	$	0.65		$	0.84
Weighted average common units outstanding:
Basic		20,995,657		18,130,310			14,611,127
Diluted		22,081,046		21,423,312			21,195,690

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

F-7

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

	2012			2011			2010
Net Income	$	178,054,827		$	70,140,237		$	88,498,048
Other comprehensive income (loss)
Unrealized gains on securities
Unrealized gain on real estate securities, available for sale		23,333,876			8,283,100			46,376,601
Reclassification adjustment for gains included in net income		(19,013,960	)		(20,081,114	)		(22,085,626	)
Total other comprehensive income (loss)		4,319,916			(11,798,014	)		24,290,975
Comprehensive income		182,374,743			58,342,223			112,789,023
Comprehensive (income) loss attributable to noncontrolling interest		49,084			(15,625	)		—
Comprehensive income attributable to preferred and common unit holders	$	182,423,827		$	58,326,598		$	112,789,023

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

F-8

LADDER CAPITAL FINANCE HOLDINGS LLLP

STATEMENTS OF CHANGES IN CAPITAL

YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

	Partners’ Capital Units						Total Partners’ Capital
	Series A Preferred Units		Series B Preferred Units		Common Units		Series A Preferred Units			Series B Preferred Units			Common Units			Total Partners’ Capital			Non- controlling Interest			Total
Balance, beginning of period (1/1/2010)		6,115,500		—		20,512,821	$	641,476,550		$	—		$	7,013,893		$	648,490,443		$	—		$	648,490,443
Distributions		—		—		—		(34,357,561	)		—			(8,589,390	)		(42,946,951	)		—			(42,946,951	)
Equity based compensation		—		—		910,491		—			—			173,803			173,803			—			173,803
Net income		—		—		—		70,798,438			—			17,699,610			88,498,048			—			88,498,048
Other comprehensive income		—		—		—		19,432,780			—			4,858,195			24,290,975			—			24,290,975
Balance, end of period (12/31/2010)		6,115,500		—		21,423,312	$	697,350,207		$	—		$	21,156,111		$	718,506,318		$	—		$	718,506,318
Contributions		—		2,075,619		—		—			257,376,700			—			257,376,700			125,000			257,501,700
Series B offering costs		—		—		—		(1,154,614	)		—			(288,654	)		(1,443,268	)		—			(1,443,268	)
Distributions		—		—		—		(35,196,213	)		—			(8,783,428	)		(43,979,641	)		(15,625	)		(43,995,266	)
Equity based compensation		—		—		—		—			—			150,696			150,696			—			150,696
Net income		—		—		—		56,286,248			—			13,838,364			70,124,612			15,625			70,140,237
Other comprehensive income		—		—		—		(9,438,411	)		—			(2,359,603	)		(11,798,014	)		—			(11,798,014	)
Balance, end of period (12/31/2011)		6,115,500		2,075,619		21,423,312		707,847,217			257,376,700			23,713,486			988,937,403			125,000			989,062,403
Contributions		—		24,194		—		—			3,000,000			—			3,000,000			521,875			3,521,875
Distributions		—		—		—		(58,396,459	)		(2,529,456	)		(15,235,385	)		(76,161,300	)		(15,625	)		(76,176,925	)
Equity based compensation		—		31,452		1,127,543		—			1,892,473			515,300			2,407,773			—			2,407,773
Net income (loss)		—		—		—		130,223,357			12,769,399			35,111,155			178,103,911			(49,084	)		178,054,827
Other comprehensive income		—		—		—		3,158,572			309,722			851,622			4,319,916			—			4,319,916
Balance, end of period (12/31/2012)		6,115,500		2,131,265		22,550,855	$	782,832,687		$	272,818,838		$	44,956,178		$	1,100,607,703		$	582,166		$	1,101,189,869

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

F-9

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

	2012			2011			2010
Cash flows from operating activities:
Net income	$	178,054,827		$	70,140,237		$	88,498,048
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,640,619			1,043,732			408,489
Unrealized (gain) loss on derivative instruments		(12,694,838	)		18,467,023			8,444,883
Loan loss provision		448,833			—			884,995
Cash collateral held by broker—derivatives		4,640,186			(17,509,314	)		(13,965,543	)
Amortization of equity based compensation		2,407,773			150,696			173,803
Amortization of deferred financing costs included in interest expense		3,166,115			3,246,199			5,966,211
Accretion/amortization of discount, premium and other fees		35,334,242			23,329,660			(10,355,958	)
Realized gain on sale of real estate securities		(19,013,961	)		(20,081,114	)		(22,085,626	)
Realized gain on sale of mortgage loan receivables		(154,613,009	)		(66,270,758	)		(30,532,843	)
Realized gain on sale of real estate		(1,275,235	)		—			(2,419,423	)
Origination of mortgage loan receivables held for sale		(2,121,380,854	)		(1,139,669,700	)		(623,159,195	)
Repayment of mortgage loan receivables held for sale		75,654,634			19,957,458			1,454,692
Proceeds from sales of mortgage loan receivables held for sale		1,904,189,552			1,444,330,798			358,544,564
Accrued interest receivable		(318,080	)		(811,868	)		(2,706,232	)
Earnings on equity method investee		(1,256,109	)		(346,612	)		—
Distributions of return on capital from investment in equity method investee		1,403,687			—			—
Changes in operating assets and liabilities:
Due to broker		(871,802	)		657,632			214,170
Due from broker		(1,683,023	)		(200,982	)		1,392,126
Other assets		(5,890,951	)		6,048			(185,254	)
Accrued expenses and other liabilities		1,642,506			3,862,937			8,153,655
Net cash provided by (used in) operating activities		(108,414,888	)		340,302,072			(231,274,438	)
Cash flows from investing activities:
Acquisition of fixed assets		(351,041	)		(1,317,417	)		(339,731	)
Purchases of real estate securities		(425,796,392	)		(991,195,238	)		(1,147,217,918	)
Repayment of real estate securities		951,150,951			547,461,630			344,333,563
Proceeds from sales of real estate securities		279,275,981			406,937,614			483,645,609
Purchase of FHLB stock		(13,100,000	)		—			—
Origination and purchases of mortgages held for investment		(341,947,392	)		(304,684,390	)		(160,948,125	)
Repayment of mortgage loan receivables held for investment		204,913,202			44,291,884			68,449,688
Reduction (addition) of cash collateral held by broker		(14,733,955	)		(8,943,268	)		1,192,855
Capital contributions to investment in equity method investee		(9,265,125	)		(9,549,518	)		—
Distributions of return of capital from investment in equity method investee		6,169,025			170,000			—
Purchases of real estate		(428,651,275	)		(3,870,000	)		(63,582,856	)
Proceeds from sale of real estate		75,646,240			—			40,070,429
Net cash provided by (used in) investing activities		283,310,219			(320,698,703	)		(434,396,486	)
Cash flows from financing activities:
Deferred financing costs		(10,599,987	)		(500,000	)		(8,508,714	)
Repayment of repurchase agreement		(12,151,329,521	)		(21,807,839,225	)		(10,993,271,966	)
Proceeds from repurchase agreement		11,348,169,066			21,719,206,391			12,237,547,399
Proceeds from long-term financing		85,228,344			2,940,000			373,331,813
Repayment of long-term financing		(36,740	)		(138,386,154	)		(997,312,406	)
Proceeds from FHLB borrowings		362,000,000			—			—
Repayments of FHLB borrowings		(100,000,000	)		—			—
Proceeds from debt issued		325,000,000			—			—
Purchase of derivative instruments		(226,225	)		(48,375	)		(122,000	)
Partners’ capital contributions		3,000,000			257,376,700			—
Series B offering costs—Series A Preferred		—			(1,154,614	)		—
Series B offering costs—Common Units		—			(288,654	)		—
Partners’ capital distributions		(76,161,300	)		(43,979,641	)		(42,946,951	)
Capital contributed by a noncontrolling interest		521,875			125,000			—
Capital distributed to a noncontrolling interest		(15,625	)		(15,625	)		—
Net cash provided by (used in) financing activities		(214,450,113	)		(12,564,197	)		568,717,175
Net increase / (decrease) in cash		(39,554,782	)		7,039,172			(96,953,749	)
Cash at beginning of period		83,350,445			76,311,273			173,265,022
Cash at end of period	$	43,795,663		$	83,350,445		$	76,311,273
Supplemental information:
Cash paid for interest	$	27,179,564		$	32,329,370		$	43,269,441
Cash paid for taxes	$	589,042		$	1,360,149		$	597,826

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

F-10

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012, 2011 AND 2010

1.    ORGANIZATION AND OPERATIONS

On February 25, 2008, Ladder Capital Finance Holdings LLC (the “LLC”) was organized as a Delaware limited liability company. Effective August 9, 2011, the LLC converted from a limited liability company to a limited liability limited partnership and the members of the LLC were admitted as partners in a newly formed company, Ladder Capital Finance Holdings LLLP (the LLC and Ladder Capital Finance Holding LLLP are collectively referred to as the “Company”). Ladder Capital Finance Holdings LLLP serves as the holding company for its wholly-owned subsidiaries that collectively operate as a specialty finance company that provides comprehensive financing solutions to the commercial real estate industry. The Company’s existence is perpetual unless dissolved and terminated in accordance with the provisions of the corresponding operating agreements.

The Company conducted and completed a private offering of its Series A participating preferred units (the “Offering”) and a private offering of its Series B participating preferred units (the “Series B Offering”) and, through its wholly-owned subsidiaries, is using the proceeds of the Offering and the Series B Offering to originate and invest in a diverse portfolio of real estate-related assets. The Company’s principal business activity is to originate and invest in the following asset classes: fixed-rate commercial mortgages, interim floating-rate commercial mortgages, senior and junior interests in commercial mortgages, mezzanine loans, commercial mortgage-backed securities (“CMBS”), and Government National Mortgage Association (“GNMA”) securities, net leased and other commercial real estate and special investment situations.

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

The consolidated financial statements include the Company’s accounts and those of its subsidiaries which are wholly-owned or controlled by the Company. All significant intercompany transactions and balances have been eliminated.

Certain 2011 amounts have been revised to correctly reflect amounts associated with the noncontrolling interests of the preferred shareholders of the Company’s REIT subsidiary. Specifically, the prior period amounts have been revised to separately reflect noncontrolling interest balances on the consolidated balance sheets and statements of changes in capital and the allocation of $15,625 of income and related distributions to noncontrolling interests on the consolidated statements of income and of cash flows. These balances and amounts had previously classified in the balances and amounts attributable to partners’ capital (common units). Management believes the impact of the revision to the 2011 financial statements is inconsequential.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and

F-11

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the balance sheets. In particular, the estimates used in the pricing process for real estate securities, is inherently subjective and imprecise. Actual results could differ from those estimates.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners. For the Company’s purposes, comprehensive income represents net income, as presented in the consolidated statement of income, adjusted for unrealized gains or losses on securities available for sale adjusted for realized gains or losses on securities sold.

Cash and Cash Equivalents

The Company considers all investments with original maturities of three months or less to be cash equivalents. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $250,000 as of December 31, 2012 and 2011, respectively. At December 31, 2012 and December 31, 2011 and at various times during the years, balances exceeded the insured limits.

Real Estate Securities

The Company designates its real estate securities investments on the date of acquisition of the investment. Real estate securities that the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are designated as available-for-sale and are carried at estimated fair value with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in partners’ capital. Similar treatment is afforded to our portfolio of interest-only securities available for sale. The Company uses the specific identification method when determining the cost of securities sold and the amount reclassified out of accumulated other comprehensive income into earnings. The Company accounts for the changes in the fair value of the unfunded portion of its GNMA Construction securities as available for sale securities. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income. The Company estimates the fair value of its CMBS primarily based on pricing services and broker quotes for the same or similar securities in which it has invested. Different judgments and assumptions could result in materially different estimates of fair value.

When the estimated fair value of an available-for-sale security is less than amortized cost, the Company will consider whether there is an other-than-temporary impairment in the value of the security. An impairment will be considered other-than-temporary based on consideration of several factors, including (i) if the Company intends to sell the security, (ii) if it is more likely than not that the Company will be required to sell the security before recovering its cost, or (iii) the Company does not expect to recover the security’s cost basis (i.e., credit loss). A credit loss will have occurred if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis. If the Company intends to sell an impaired debt

F-12

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

security or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the impairment is other-than-temporary and will be recognized currently in earnings equal to the entire difference between fair value and amortized cost. If a credit loss exists, but the Company does not intend to, nor is it more likely than not that it will be required to sell before recovery, the impairment is other-than-temporary and will be separated into (i) the estimated amount relating to the credit loss, and (ii) the amount relating to all other factors. Only the estimated credit loss amount is recognized currently in earnings, with the remainder of the loss recognized in other comprehensive income. Estimating cash flows and determining whether there is other-than-temporary impairment require management to exercise judgment and make significant assumptions, including, but not limited to, assumptions regarding estimated prepayments, loss assumptions, and assumptions regarding changes in interest rates. As a result, actual impairment losses, and the timing of income recognized on these securities, could differ from reported amounts.

No other-than-temporary impairment charges have been provided for in the financial statements at December 31, 2012 and 2011.

Mortgage Loans Receivable Held for Sale

Loans that the Company intends to sell, subsequent to origination or acquisition, are classified as mortgage loans receivable held for sale, net of any applicable allowance for credit loss. Mortgage loans classified as held for sale are generally subject to a specific marketing strategy or a plan of sale.

Loans held for sale are accounted for at the lower of cost or fair value on an individual basis. Loan origination fees and direct loan origination costs are deferred until the related loans are sold.

Mortgage Loans Receivable Held for Investment

Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding principal balances net of any unearned income, unamortized deferred fees or costs, premiums or discounts and an allowance for loan losses. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, adjusted for actual prepayments.

The Company evaluates each loan classified as mortgage loans receivable held for investment for impairment at least quarterly. Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loans contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.

The Company’s loans are typically collateralized by real estate. As a result, the Company regularly evaluates 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

F-13

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

operating capability of the borrower/sponsor on a loan by loan basis. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data.

Upon the completion of the process above, the Company concluded that no loans were impaired as of December 31, 2012, 2011 or 2010. Significant judgment is required when evaluating loans for impairment, therefore actual results over time could be materially different.

Real Estate

Certain real estate is carried at historical cost less accumulated depreciation. Costs directly related to acquisitions deemed to be business combinations are expensed. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Real estate is depreciated using the straight-line method over the estimated useful lives of the assets which range from twelve to forty-nine years.

Operating real estate assets are stated at cost and consist of land, buildings and improvements, including other costs incurred during their possession, renovation and acquisition. A property acquired not subject to an existing lease is treated as the acquisition of an asset, recorded at its purchase price, allocated between land and building based upon their fair values at the date of acquisition, with acquisition costs capitalized to the basis of the asset acquired. A property acquired with an existing lease is accounted for as a business combination.

The Company allocates the cost of a real estate acquisition that is a business, including the assumption of liabilities, to tangible assets such as land, buildings and improvements and intangible assets and liabilities for in-place leases, above- and below-market leases, and tenant relationships, based on their estimated fair values. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant. Above- and below-market and in-place lease values are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be received and management’s estimate of market lease rates, measured over the non-cancelable terms of the respective leases, plus any extended term for leases with below-market renewal options when these renewals are expected to be exercised. Other intangible assets for in-place leases include estimates of carrying costs, such as real estate taxes, insurance, other operating expenses, and lost rental revenue during the hypothetical expected lease-up periods based on the evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.

Real estate is primarily leased to others on a net basis whereby the tenant is generally responsible for all operating expenses relating to the property, including property taxes,

F-14

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

insurance, maintenance, repairs, renewals and improvements. These leases are for fixed terms of varying length and provide for annual rentals. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in unbilled rent receivable in the consolidated balance sheets.

The following is a schedule of future minimum rent under leases at December 31, 2012:

	Amount
2013	$	18,485,198
2014		18,485,198
2015		18,485,198
2016		18,494,072
2017		18,585,717
Thereafter		277,837,636
Total	$	370,373,019

Investment in Equity Method Investee

The Company holds a non-controlling interest in a partnership. The Company is deemed to exert significant influence over the affairs of the partnership and accounts for this investment using the equity method of accounting. The investment balance is increased each period for additional capital contributions and a share of the entity’s earnings and decreased for cash distributions and a share of the entity’s losses.

Valuation of Financial Instruments

Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, fair values are not necessarily indicative of the amounts the Company could realize upon disposition of the financial instruments. Financial instruments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of pricing observability and will therefore require a lesser degree of judgment to be utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and will require a higher degree of judgment in measuring fair value. Pricing observability is generally affected by such items as the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.

For a further discussion regarding the measurement of financial instruments see Note 8, “Fair Value of Financial Instruments.”

Tuebor/Federal Home Loan Bank Membership

Tuebor Captive Insurance Company LLC (“Tuebor”), a wholly owned subsidiary of the Company, was licensed in Michigan and approved to operate as a captive insurance company as well as being approved to become a member of the Federal Home Loan Bank of Indianapolis

F-15

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

(“FHLB”), with membership finalized with the purchase of stock, in the FHLB on July 11, 2012. That approval allowed Tuebor to purchase capital stock in the FHLB, the prerequisite to obtaining financing on eligible collateral.

Deferred Financing Costs

Fees and expenses incurred in connection with financing transactions are capitalized within other assets in the consolidated balance sheets and amortized over the term of the financing by applying the effective interest rate method and the amortization is reflected in interest expense.

Derivative Instruments

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. To address exposure to interest rates, the Company uses derivatives primarily to economically hedge the fair value variability of fixed rate assets caused by interest rate fluctuations. The Company may use a variety of derivative instruments that are considered conventional, or “plain vanilla” derivatives, including interest rate swaps, futures, caps, collars and floors, to manage interest rate risk.

To determine the fair value of derivative instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, and termination cost may be used to determine fair value. All such methods of measuring fair value for derivative instruments result in an estimate of fair value, and such value may never actually be realized.

The Company recognizes all derivatives on the consolidated balance sheets at fair value. The Company does not generally designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, these derivatives have been recognized currently in net result from derivative transactions in the accompanying consolidated statements of income.

Repurchase Agreements

The Company finances the majority of its mortgage loan receivables held for sale, a portion of its mortgage loan receivables held for investment and the majority of its real estate securities using repurchase agreements. Under a repurchase agreement, an asset is sold to a counterparty to be repurchased at a future date at a predetermined price, which represents the original sales price plus interest. The Company accounts for these repurchase agreements as financings under ASC 860-10-40. Under this standard, for these transactions to be treated as financings, they must be separate transactions and not linked. If the Company finances the purchase of its mortgage loan receivables held for sale, mortgage loan receivables held for investment and real estate securities with repurchase agreements with the same counterparty from which the securities are purchased and both transactions are entered into contemporaneously or in contemplation of each other, the transactions are presumed under GAAP to be part of the same arrangement, or a “Linked Transaction,” unless certain criteria are met. None of the Company’s repurchase agreements are accounted for as linked transactions.

F-16

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

Income Taxes

The Company is a limited liability limited partnership which elected to be treated as a partnership for income tax purposes. Therefore, the Company is generally not subject to U.S. federal and state income taxes; however, certain of the Company’s income is subject to the New York Unincorporated Business Tax.

Income and losses pass through to the partners and are reported by them individually for federal and state income tax purposes. The Company’s sole corporate subsidiary is subject to federal, state and local income tax. The corporate tax payable is not considered to be material to the Company’s financial statements and accordingly is included in other liabilities in the accompanying balance sheet.

The Company’s consolidated real estate investment trust (“REIT”) subsidiary has operated consistent with and has elected to be treated as a real estate investment trust under the Internal Revenue Code. To qualify as a REIT, the subsidiary is required to pay dividends of at least 90% of its ordinary taxable income each year and meet certain other criteria. As a REIT, the subsidiary is subject to corporate taxes, however it is allowed a deduction for the amount of dividends paid to its shareholders/members and only pays taxes on undistributed profits. Accordingly, since the subsidiary expects to continue to distribute in excess of taxable income, no corporate-level current or deferred taxes are provided for by it or in these consolidated financial statements.

The Company determines whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement which could result in the Company recording a tax liability that would reduce partners’ capital.

The Company’s policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as a component of general and administrative expense on its consolidated statements of income. As of December 31, 2012 and 2011, the Company does not have any interest or penalties associated with the underpayment of any income taxes. The last three tax years remain open and subject to examination by tax jurisdictions.

Revenue Recognition

Interest income is accrued based on the outstanding principal amount and contractual terms of the Company’s loans and securities. Discounts or premiums associated with the purchase of loans and investment securities are amortized or accreted into interest income as a yield adjustment on the effective interest method, based on expected cash flows through the expected maturity date of the investment. On at least a quarterly basis, the Company reviews and, if appropriate, makes adjustments to its cash flow projections. The Company has historically collected, and expect to continue to collect, all contractual amounts due on its loans and CMBS. As a result, the Company does not adjust the projected cash flows to reflect anticipated credit losses for these types of investments. If the performance of a credit deteriorated security is more favorable than forecasted, the company will generally accrete more credit discount into interest income than initially or previously expected.

F-17

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

These adjustments are made prospectively beginning in the period subsequent to the determination that a favorable change in performance is projected. Conversely, if the performance of a credit deteriorated security is less favorable than forecasted, an other-than-temporary impairment may be taken, and the amount of discount accreted into income will generally be less than previously expected.

The effective yield on these securities is based on the projected cash flows from each security, which is estimated based on the Company’s observation of the then current information and events and will include assumptions related to interest rates, prepayment rates and the timing and amount of credit losses. On at least a quarterly basis, the Company reviews and, if appropriate, makes adjustments to its cash flow projections based on input and analysis received from external sources, internal models, and its judgment about interest rates, prepayment rates, the timing and amount of credit losses (if applicable), and other factors. Changes in cash flows from those originally projected, or from those estimated at the last evaluation, may result in a prospective change in the yield/interest income recognized on such securities. Actual maturities of the securities are affected by the contractual lives of the associated mortgage collateral, periodic payments of scheduled principal, and repayments of principal. Therefore, actual maturities of the securities will generally be shorter than stated contractual maturities.

For loans that we have not elected to record at fair value under FASB ASC 825 and are classified as held for investment, origination fees and direct loan origination costs are also recognized in interest income over the loan term as a yield adjustment using the effective interest method. For loans classified as held for sale and that we have not elected to record at fair value under FASB ASC 825, origination fees and direct loan origination costs are deferred reducing the basis of the loan and are realized as a portion of the gain/(loss) on sale of loans when sold.

Securitization Results

We recognize gains on sale of loans upon sale to a securitization trust net of any costs related to that sale.

Stock Based Compensation Plan

The Company accounts for its equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant, and generally are time based awards. For time- based awards the Company recognizes compensation expense over the substantive vesting period, on a straight-line basis.

Registration

These financial statements are prepared in conformity with the requirements applicable to a “Non-Accelerated Filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. The Company’s previously issued financial statements were not prepared in compliance with public company reporting requirements. Significant differences from the previously issued statements include segment reporting, as reflected in Note 14, Partners’ capital is now segregated for each of the classes of units in the Consolidated Balance Sheets consistent with the presentation in the Capital Statements, and business combination reporting, as reflected in Note 5.

F-18

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

New Accounting Pronouncements

In April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-02, Receivables (Topic 3 10): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring, (“ASU 2011-02”) clarifies whether loan modifications constitute troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. The adoption of ASU 2011-02 did not have an effect on the Company’s financial position or results of operations.

In April 2011, the FASB issued ASU No. 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements, (“ASU 2011-03”), which changes the assessment of whether repurchase agreement transactions should be accounted for as sales or secured financings. In a typical repurchase agreement transaction, an entity transfers financial assets to the counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. Prior to this update, one of the factors in determining whether sale treatment could be used was whether the transferor maintained effective control of the transferred assets and in order to do so, the transferor must have the ability to repurchase such assets. This ASU changes the assessment of effective control by focusing on a transferor’s contractual rights and obligations with respect to transferred financial assets, rather than whether the transferor has the practical ability to perform in accordance with those rights or obligations. ASU 2011-03 was effective for the Company for the first interim or annual period beginning on or after December 15, 2011. The Company records repurchase agreements as secured borrowings and not sales, and accordingly, the adoption of this update on January 1, 2012 did not have a material impact on the Company’s consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”). ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles related to measuring fair value and requires additional disclosures about fair value measurements. Specifically, the guidance specifies that the concepts of highest and best use and valuation premise in a fair value measurement are only relevant when measuring the fair value of nonfinancial assets whereas they are not relevant when measuring the fair value of financial assets and liabilities. Required disclosures are expanded under the new guidance, especially for fair value measurements that are categorized within Level 3 of the fair value hierarchy, for which quantitative information about the unobservable inputs used, and a narrative description of the valuation processes in place and sensitivity of recurring Level 3 measurements to changes in unobservable inputs will be required. Entities will also be required to disclose the categorization by level of the fair value hierarchy for items that are not measured at fair value in the balance sheet but for which the fair value is required to be disclosed. ASU 2011-04 is effective for annual periods beginning after December 15, 2011, and is to be applied prospectively. The adoption of this guidance did not have a material impact on the Company’s financial position or results of operations.

F-19

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). The amendments in this ASU require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. In December 2011, the FASB deferred portions of this update in its issuance of ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05 (“ASU 2011-12”). The amendment requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-12 defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. ASU 2011-05 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2011, with early adoption permitted, but full retrospective application is required. The adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Company’s financial statement presentation.

In November 2011, the FASB issued ASU 2011-10, Property, Plant and Equipment (Topic 360): Derecognition of in Substance Real Estate—a Scope Clarification (a consensus of the FASB Emerging Issues Task Force) (“ASU 2011-10”). ASU 2011-10 requires a parent company that ceases to have a controlling financial interest in a subsidiary that is in substance real estate because the subsidiary has defaulted on its nonrecourse debt to use the FASB’s Real Estate guidance to determine whether to derecognize the in substance real estate entities. ASU 2011-10 is effective for reporting periods beginning on or after June 15, 2012. The adoption of ASU 2011 -10 did not have a material impact on the Company’s financial position or results of operations.

In December 2011, the FASB released ASU 2011 -11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011 -11”). ASU 2011 -11 requires companies to provide new disclosures about offsetting and related arrangements for financial instruments and derivatives. The provisions of ASU 2011 -11 are effective for reporting periods beginning on or after January 1, 2013, and are required to be applied retrospectively. The adoption of ASU 2011 -11 is not expected to have a material impact on the Company’s financial statement disclosures.

In February 2013, the FASB released ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2013-01 limits the scope of the new balance sheet offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. Our adoption of this standard effective January 1, 2013 is not expected to have a material impact on the Company’s financial statement disclosures.

In February 2013, the FASB released ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 enhances the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 sets requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not

F-20

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

reclassified to net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires companies to present reclassifications by component when reporting changes in AOCI balances. Our adoption of this standard effective January 1, 2013 is not expected to have a material impact on the Company’s financial statement disclosures.

3.    REAL ESTATE SECURITIES

The following is a summary of the Company’s securities at December 31, 2012 and 2011, all of which are classified as available-for-sale and are therefore reported at fair value:

December 31, 2012

					Gross Unrealized									Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses			Carrying Value		# of Securities		Rating (1)		Coupon %			Yield %			Remaining Maturity (years)
	($ in thousands)
CMBS	$	781,271	$	783,454	$	23,763	$	(444	)	$	806,773		93		AAA		5.38	%		4.77	%		1.43
CMBS interest-only		234,463		25,219		1,924		—			27,143		3		AAA		2.11	%		2.70	%		3.28
GNMA interest-only		2,039,528		121,825		2,974		(3,802	)		120,997		31		AAA		1.34	%		8.79	%		2.99
FHLMC interest-only		222,515		9,518		481		—			9,999		2		AAA		0.89	%		5.31	%		2.56
GN construction securities		43,023		44,435		7,459		(6	)		51,843		10		AAA		5.03	%		3.57	%		6.54
GN permanent securities		105,566		109,008		214		(415	)		108,807		18		AAA		5.22	%		3.63	%		2.68
Total	$	3,426,366	$	1,093,459	$	36,815	$	(4,667	)	$	1,125,562

December 31, 2011

					Gross Unrealized									Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses			Carrying Value		# of Securities		Rating (1)		Coupon %			Yield %			Remaining Maturity (years)
	($ in thousands)
CMBS	$	1,619,706	$	1,627,326	$	18,176	$	(754	)	$	1,644,748		136		AAA		5.24	%		4.65	%		1.45
CMBS interest-only		275,293		19,202		122		(71	)		19,253		4		AAA		1.57	%		6.94	%		5.17
GNMA interest-only		1,453,721		92,328		5,425		(71	)		97,682		21		AAA		1.40	%		10.45	%		8.48
FHLMC interest-only		119,418		1,772		—		(19	)		1,753		1		AAA		0.32	%		4.78	%		5.84
FNMA		4,773		4,425		—		(129	)		4,296		1		AAA		7.21	%		8.02	%		9.52
GN construction securities		24,801		25,586		6,109		—			31,695		6		AAA		5.29	%		4.74	%		6.92
GN permanent securities		140,211		146,602		337		(1,296	)		145,643		15		AAA		5.64	%		4.23	%		3.50
Total	$	3,637,923	$	1,917,241	$	30,169	$	(2,340	)	$	1,945,070

(1) Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple credit rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change (including the assignment of a “negative outlook” or “credit watch”) at any time.

F-21

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

The following is a breakdown of the fair value of the Company’s securities by remaining maturity based upon expected cash flows at December 31, 2012 and 2011 ($ in thousands):

December 31, 2012

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	324,559	$	473,049	$	9,165	$	—	$	806,773
CMBS interest-only		—		27,143		—		—		27,143
GNMA interest-only		1,186		119,811		—		—		120,997
FHLMC interest-only		—		9,999		—		—		9,999
GN construction securities		—		5,775		46,068		—		51,843
GN permanent securities		15,489		92,239		1,079		—		108,807
Total	$	341,234	$	728,016	$	56,312	$	—	$	1,125,562

December 31, 2011

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	941,075	$	659,662	$	44,011	$	—	$	1,644,748
CMBS interest-only		832		—		18,421		—		19,253
GNMA interest-only		—		—		1,753		—		1,753
FHLMC interest-only		—		—		93,601		4,081		97,682
FNMA		—		—		4,296		—		4,296
GN construction securities		—		12,307		19,388		—		31,695
GN permanent securities		20,934		84,196		33,686		6,827		145,643
Total	$	962,841	$	756,165	$	215,156	$	10,908	$	1,945,070

4.     MORTGAGE LOAN RECEIVABLES

For the year ended December 31, 2012, the Company originated/purchased $2,463,328,246 first mortgage and mezzanine loan receivables on commercial real estate properties and $15.7 million Federal Housing Authority (“FHA”) commercial mortgage loans and received $280,567,835 of principal repayments on outstanding loans. The Company participated in six securitization transactions by selling originated first mortgage loans totaling $1.599 billion and sold five loans totaling $150.7 million to the partnership described in Note 6.

For the year ended December 31, 2011, the Company originated $1,448,590,615 first mortgage and mezzanine loan receivables on commercial real estate properties and received $64,249,342 of principal repayments on outstanding loans. The Company participated in three securitization transactions by selling originated first mortgage loans totaling $1.014 billion, sold loans totaling $139.9 million to the Partnership described in Note 6, and an additional $229 million as a whole loan sale.

F-22

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

December 31, 2012

	Outstanding Face Amount		Amortized Cost Basis		Weighted Average Yield			Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost	$	331,719,768	$	326,318,550		11.28	%		2.27
Mortgage loan receivables held for sale		623,644,114		623,332,620		4.81	%		8.84
Total	$	955,363,882	$	949,651,170

December 31, 2011

	Outstanding Face Amount		Amortized Cost Basis		Weighted Average Yield			Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost	$	259,088,116	$	255,196,384		9.94	%		1.73
Mortgage loan receivables held for sale		258,841,725		258,841,725		5.56	%		9.50
Total	$	517,929,841	$	514,038,109

The following table summarizes the mortgage loan receivables by loan type:

December 31, 2012

	Outstanding Face Amount		Amortized Cost Basis
Mortgage loan receivables held for sale
First mortgage loan	$	623,644,114	$	623,332,620
Total mortgage loan receivables held for sale		623,644,114		623,332,620
Mortgage loan receivables held for investment, at amortized cost
First mortgage loan		233,610,367		231,826,359
Mezzanine loan		94,346,656		92,629,446
Loan participation		3,762,745		3,762,745
Total mortgage loan receivables held for investment, at amortized cost		331,719,768		328,218,550
Reserve for loan losses		—		1,900,000
Total	$	955,363,882	$	949,651,170

F-23

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

December 31, 2011

	Outstanding Face Amount		Amortized Cost Basis
Mortgage loan receivables held for sale
First mortgage loan	$	258,841,725	$	258,841,725
Total mortgage loan receivables held for sale		258,841,725		258,841,725
Mortgage loan receivables held for investment, at amortized cost
First mortgage loan		233,040,964		230,829,024
Mezzanine loan		20,147,152		19,986,067
Loan participation		5,900,000		5,832,460
Total mortgage loan receivables held for investment, at amortized cost		259,088,116		256,647,551
Reserve for loan losses		—		1,451,167
Total	$	517,929,841	$	514,038,109

As described in Note 2, the Company evaluates each of its loans for impairment at least quarterly. Its loans are typically collateralized by real estate. As a result, the Company regularly evaluates 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. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow 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 at maturity, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data.

Reserve for Loan Losses

	For the year ended December 31,
	2012		2011		2010
Reserve for loan losses at beginning of year	$	1,451,167	$	1,451,167	$	566,172
Reserve for loan losses		448,833		—		884,995
Charge-offs		—		—		—
Reserve for loan losses at end of year	$	1,900,000	$	1,451,167	$	1,451,167

F-24

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

5.     REAL ESTATE

During 2012, the Company purchased 40 retail properties subject to long-term net lease obligations of $309,651,275. During 2011, the Company purchased one retail property subject to a long-term net lease obligation of $3,870,000. In 2012, 13 of these properties were sold for $75,646,207, resulting in a gain on sale of $1,275,235. There were no property sales in 2011. Additionally, the Company acquired, through a majority owned joint venture with an operating partner, 427 residential condominium units for $119,000,000, some of which were subject to residential leases. Real estate consists of the following:

	For the year ended December 31,
	2012			2011
Land		54,234,563			7,361,598
Building(1)		296,432,261			17,282,224
In-place leases and other intangibles(1)		33,415,296			5,158,028
Real estate	$	384,082,120		$	29,801,850
Less: Accumulated depreciation and amortization		(4,060,448	)		(967,137	)
Real estate, net	$	380,021,672		$	28,834,713

(1) The in-place and above/below market lease assets presented above were previously included within the Building line item in the above tables. As such amounts are separately identifiable intangible assets associated with the acquired real estate assets, management has corrected the above disclosure to separately disclose such amounts. There was no impact to real estate, net as previously disclosed or reported.

At December 31, 2012 gross intangible assets totalled $33,415,296 with total accumulated amortization of $996,999, resulting in net intangible assets of $32,418,297. At December 31, 2011 gross intangible assets totalled $5,158,028 with total accumulated amortization of $314,255, resulting in net intangible assets of $4,843,773, respectively. For the years ended December 31, 2012 and 2011, the Company recorded amortization expense of $690,086 and $226,103, respectively.

The following table presents expected amortization during the next five years and thereafter related to the acquired in-place lease intangibles, for property owned as of December 31, 2012:

Year ended December 31,	Amount
2013	$	1,657,686
2014		1,657,686
2015		1,657,686
2016		1,657,686
2017		1,657,686
Thereafter		24,129,867
Total	$	32,418,297

F-25

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

The following unaudited pro forma financial information has been prepared to provide information with regard to real estate acquisitions.

The accompanying unaudited pro forma information for the years ended December 31, 2012 and 2011 combine our historical operations with the purchase of each of the real estate described above, as if those transactions had occurred on January 1, 2011.

The unaudited pro forma information has been prepared based upon our historical consolidated financial statements and certain historical financial information of the acquired properties and should be read in conjunction with the consolidated financial statements and notes thereto. This unaudited pro forma information may not be indicative of the results that actually would have occurred if these transactions had been in effect on the dates indicated, nor do they purport to represent our future results of operations.

	For the year ended December 31, 2012
	Company Historical		Acquisitions		Consolidated Pro Forma
Operating lease income	$	8,331,338	$	11,411,273	$	19,742,611
Net income		178,054,827		12,812,695		190,867,522
	For the year ended December 31, 2011
	Company Historical		Acquisitions		Consolidated Pro Forma
Operating lease income	$	2,290,291	$	16,800,519	$	19,090,810
Net income		70,140,237		8,728,471		78,868,708

The most significant adjustments made in preparing the unaudited pro forma information were to: (i) include the incremental operating lease income, (ii) include the incremental depreciation and, (iii) exclude transaction costs associated with the properties acquired.

Included in operating lease income is base rent, presented on a straight-line basis. The straight-line rent adjustment resulted in an increase to operating lease income of approximately $200,197 and $293,515 for the years ended December 31, 2012 and 2011, respectively.

From the date of acquisition through December 31, 2012, the Company recorded $5,389,246 of operating lease income from the real estate acquisitions.

6.     INVESTMENT IN EQUITY METHOD INVESTEE

On April 15, 2011, the Company entered into a limited partnership agreement and acquired a 100% general partnership interest and a 10% limited partnership interest in Ladder Capital Realty Income Partnership I LP (the “Partnership”). The Partnership was formed to acquire first loan mortgages collateralized by commercial real estate property for purposes of income and/or capital appreciation. The Company accounts for its interest in the Partnership using the equity method of accounting as it exerts significant influence but the unrelated limited partners have substantive participating rights. During the years ended December 31, 2012 and 2011, the Company contributed $9.3 million and $9.5 million, respectively, of cash into the Partnership. Simultaneously with the execution of the Partnership agreement, the Company was engaged as

F-26

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

the Manager and is entitled to a fee based upon the average net equity invested in the Partnership, which is subject to a fee reduction in the event organization expenses (as defined in the Partnership Agreement) exceed $500,000. During the years ended December 31, 2012 and 2011, the Company recorded $744,182 and $356,329, respectively, in management fees, which is reflected in fee income in the consolidated statements of income. During the year ended December 31, 2012, the Company sold five loans to the Partnership for aggregate proceeds of $152.5 million, which exceeded its carrying value by $1.8 million and is included in sale of loans, net on the consolidated statements of operations. At December 31, 2012, the Partnership has total assets and liabilities of $234 million and $108 million, respectively. During the year ended December 31, 2011, the Company sold five loans to the Partnership for aggregate proceeds of $140.9 million, which exceeded its carrying value by $1.0 million and is included in sale of loans, net on the consolidated statements of operations. At December 31, 2011, the Partnership has total assets and liabilities of $144 million and $47 million, respectively. The Company is entitled to distributions based upon its proportionate interest of 10%, and is eligible for additional distributions up to 25% if certain return thresholds are met.

7.     REPURCHASE FACILITIES AND NONRECOURSE DEBT

Repurchase Facilities/Agreements

The Company has entered into multiple committed master repurchase agreements in order to finance its lending activities throughout the fiscal year. The Company has entered into four committed master repurchase agreements, as outlined in the table below, with multiple counterparties totaling $ 1.1 billion of credit capacity. Assets pledged as collateral under these facilities are limited to CMBS securities and whole mortgage loans collateralized by first liens on commercial properties. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum leverage ratios. The Company believes it is in compliance with all covenants as of December 31, 2012 and 2011.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, no event of default exists, and no margin deficit exists, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

F-27

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

December 31, 2012

Committed Amount		Outstanding Amount		Interest Rate(s) at Dec. 31, 2012	Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
$	300,000,000	$	40,806,925	Between 2.459% and 2.958%	9/26/2013	N/A	First mortgage commercial real estate loans & investment grade commercial mortgage backed securities	$	54,603,105	$	61,155,699
$	50,000,000	$	28,995,000	2.708%	1/29/2013	N/A	First mortgage commercial real estate loans	$	37,800,000	$	42,518,901
$	450,000,000	$	133,165,026	Between 2.458% and 3.208%	5/24/2015	Two additional twelve month periods at Company’s option	First mortgage commercial real estate loans	$	225,934,255	$	237,654,929
$	300,000,000	$	23,400,000	2.710%	1/24/2014	N/A	First mortgage commercial real estate loans	$	36,000,000	$	41,080,320

December 31, 2011

Committed Amount		Outstanding Amount		Interest Rate(s) at Dec. 31, 2011	Maturity	Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
$	300,000,000	$	47,141,233	Between 2.528% and 3.028%	9/26/2013	One additional twelve month period at Company’s option	First mortgage commercial real estate loans & investment grade commercial mortgage backed securities	$	68,861,771	$	72,764,682
$	50,000,000	$	7,641,433	2.78%	1/29/2013	N/A	First mortgage commercial real estate loans	$	11,562,313	$	12,171,216
$	300,000,000	$	97,903,132	Between 2.528% and 3.153%	7/2/2012	One additional twelve month period at Company’s option	First mortgage commercial real estate loans	$	196,657,040	$	204,173,500
$	300,000,000	$	—		1/24/2013	One additional twelve month period at Company’s option	First mortgage commercial real estate loans	$	—	$	—

F-28

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

The Company has also entered into a term master repurchase agreement with a major US banking institution to finance CMBS securities. As of December 31, 2012, there are $278,020,851 in borrowings outstanding on the Company’s $600 million committed facility which mature in 2014. The borrowings under this agreement have a funding rate of 1.41% and are collateralized by real estate securities with a fair market value of $324,912,372 at December 31, 2012. As of December 31, 2011, there were $826,134,084 in borrowings outstanding. The borrowings under this agreement had funding rates ranging from 1.45% to 1.48% and are collateralized by real estate securities with a fair market value of $927,391,222 at December 31, 2011.

The Company has also entered into multiple master repurchase agreements with several counterparties. As of December 31, 2012 there was $289,528,900 and at December 31, 2011 there was $618,257,276 outstanding under such facilities with several counterparties. The borrowings under these agreements have less than three month tenors and funding rates range from 0.70% to 1.71%, with typical advance rates between 60% and 95% of the collateral. These borrowings were collateralized by real estate securities with a fair market value of $349,585,161 at December 31, 2012 and $713,226,996 at December 31, 2011.

Nonrecourse Long-Term Financing (TALF)

Commencing in July 2009, the Company participated in the Term Asset-Backed Securities Loan Facility program (“TALF”). Under the TALF program, the Federal Reserve Bank of New York (“FRBNY”) lent on a nonrecourse basis an amount equal to the market value of the asset backed securities (“ABS”) collateralizing the borrowing, less a haircut. Substitution of collateral during the terms of the loans was not allowed. TALF loans were not subject to mark-to-market or re-margining requirements. Any remittance of principal or interest on eligible collateral had to be used immediately to pay interest due on, or reduce the principal amount of, the TALF loan. Collateral haircuts were established by the FRBNY for each class of eligible collateral, based on the price volatility of each class of eligible collateral. The FRBNY assessed a nonrecourse loan fee (0.2% of financed amount) at the inception of each loan transaction. The Company borrowed a total of $1,137,958,984 under the program, at fixed interest rates ranging from 2.72% to 3.87%, with initial maturity dates ranging from July 2012 to March 2015. On March 31, 2010, FRBNY ceased making new loans under the TALF program. In 2011, the Company repaid the remaining borrowings under the TALF program in full and had no liability as of December 31, 2011.

Long Term Debt Financing

During 2012, the Company executed ten term debt agreements to finance real estate held for investment. During 2011, the Company executed one term debt agreement to finance real estate held for investment. These nonrecourse debt agreements are fixed rate financing at rates ranging from 4.85% to 6.75%, maturing in 2020, 2021 and 2022 and totaled $103,755,644 at December 31, 2012 and $18,564,040 at December 31, 2011.

FHLB Financing

On July 11, 2012, Tuebor became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of December 31, 2012, Tuebor had $262 million of borrowings outstanding, with terms of 6 months to 5 years, interest rates of 0.39% to 0.93%, and advance rates of 87% to 95% of the collateral. Collateral for the borrowings was comprised

F-29

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

of $333 million of CMBS and U.S. Agency Securities. Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval.

Senior Unsecured Notes

On September 14, 2012, the Company issued $325 million in principal amount of 7.375% Senior Notes due on October 1, 2017 (the “Notes”) at par. The Notes will pay interest semi-annually in cash in arrears on April 1 and October 1 of each year, beginning on September 19, 2012. The Notes are unsecured and are subject to covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type.

The Company issued the Notes with Ladder Capital Finance Corporation, as co-issuers on a joint and several basis. Ladder Capital Finance Corporation is a 100% owned finance subsidiary of Ladder Capital Finance Holdings LLLP with no assets or operations. None of Ladder Capital Finance Holdings LLLP’s other subsidiaries currently guarantee the Notes.

The following schedule reflects the Company’s borrowings by maturity:

	2012
2013	$	408,330,826
2014		349,420,851
2015		148,165,026
2016		65,000,000
2017		410,000,000
Thereafter		103,755,644
	$	1,484,672,347

8.     FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon market quotations, broker quotations, counterparty quotations or pricing services quotations, which provide valuation estimates based upon reasonable market order indications and are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The fair value of the mortgage loan receivables held for sale is based upon a securitization model utilizing market data from recent securitization spreads and pricing.

F-30

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, that are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at December 31, 2012 and 2011 are as follows:

December 31, 2012

									Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Fair Value			Fair Value Method	Yield %			Remaining Maturity (years)
Assets:		($ in thousands)
CMBS(1)	$	781,271	$	783,454	$	806,773		Broker quotations, pricing services		4.77	%		1.43
CMBS interest-only(1)		234,463		25,219		27,143		Broker quotations, pricing services		2.70	%		3.28
GNMA interest-only(1)		2,039,528		121,825		120,997		Broker quotations, pricing services		8.79	%		2.99
FHLMC interest-only(1)		222,515		9,518		9,999		Broker quotations, pricing services		5.31	%		2.56
GN construction securities(1)		43,023		44,435		51,843		Broker quotations, pricing services		3.57	%		6.54
GN permanent securities(1)		105,566		109,008		108,807		Broker quotations, pricing services		3.63	%		2.68
Mortgage loan receivable held for investment, at amortized cost		331,720		326,319		331,720		Discounted Cash Flow(3)		11.28	%		2.27
Mortgage loan receivable held for sale		623,644		623,333		674,414		Discounted Cash Flow(4)		4.81	%		8.84
FHLB Stock(1)(6)		13,100		13,100		13,100		(6)		3.50	%		N/A
Liabilities:
Repurchase agreements—short term		359,331		359,331		359,331		Discounted Cash Flow(2)		1.47	%		0.13
Repurchase agreements—long term		434,586		434,586		434,586		Discounted Cash Flow(2)		1.87	%		1.47
Long term financing		103,756		103,756		106,517		Discounted Cash Flow(2)		5.35	%		9.32
Borrowings from the FHLB		262,000		262,000		262,787		Discounted Cash Flow(2)		0.61	%		3.06
Senior unsecured notes		325,000		325,000		333,938		Broker quotations, pricing services		7.38	%		4.75
Nonhedge derivatives(1)(5)		904,350		N/A		(12,821	)	Counterparty quotations		N/A			4.32

(1) Measured at fair value on a recurring basis.

(2) Fair value for repurchase agreement liabilities is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. For the nonrecourse term financing, the amortized cost approximates the fair value discounting the expected cash flows. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any security positions.

(3) Fair value for mortgage loan receivable, held for investment is estimated to approximate carrying amount for those assets with short interest rate reset risk (30 days).

(4) Fair value for mortgage loan receivable, held for sale is measured at fair value using a securitization model utilizing market data from recent securitization spreads and pricing.

(5) The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(6) Fair Value for FHLB stock approximates outstanding face amount as the Company is restricted from trading it and can only put the stock back to the FHLB at par.

F-31

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

December 31, 2011

									Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Fair Value			Fair Value Method	Yield %			Remaining Maturity (years)
Assets:		($ in thousands)
CMBS(1)	$	1,619,706	$	1,627,326	$	1,644,748		Broker quotations, pricing services		4.65	%		1.45
CMBS interest-only(1)		275,293		19,202		19,253		Broker quotations, pricing services		6.94	%		5.17
GNMA interest-only(1)		1,453,721		92,328		97,682		Broker quotations, pricing services		10.45	%		8.48
FHLMC interest-only(1)		119,418		1,772		1,753		Broker quotations, pricing services		4.78	%		5.84
FNMA(1)		4,773		4,425		4,296		Broker quotations, pricing services		8.02	%		9.52
GN construction securities(1)		24,801		25,586		31,695		Broker quotations, pricing services		4.74	%		6.92
GN permanent securities(1)		140,211		146,602		145,643		Broker quotations, pricing services		4.23	%		3.50
Mortgage loan receivable held for investment, net		259,088		255,196		259,088		Discounted Cash Flow(3)		9.94	%		1.73
Mortgage loan receivable held for sale		258,842		258,842		272,386		Discounted Cash Flow(4)		5.56	%		9.50
Liabilities:
Repurchase agreements—short term		618,257		618,257		618,257		Discounted Cash Flow(2)		1.28	%		0.08
Repurchase agreements—long term		978,820		978,820		978,820		Discounted Cash Flow(2)		1.67	%		1.16
Long term financing		18,564		18,564		18,700		Discounted Cash Flow(2)		6.59	%		8.88
Nonhedge derivatives(1)(5)		760,850		N/A		(25,742	)	Counterparty quotations		N/A			2.38

(1) Measured at fair value on a recurring basis.

(2) Fair value for repurchase agreement liabilities is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. For the nonrecourse term financing, the amortized cost approximates the fair value discounting the expected cash flows. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any security positions.

(3) Fair value for mortgage loan receivable, held for investment is estimated to approximate carrying amount for those assets with short interest rate reset risk (30 days).

(4) Fair value for mortgage loan receivable, held for sale is measured at fair value using a securitization model utilizing market data from recent securitization spreads and pricing.

(5) The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

F-32

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

Derivative Instruments

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. The following is a breakdown of the derivatives outstanding as of December 31, 2012 and 2011:

December 31, 2012

			Fair Value
Contract Type	Notional		Positive(1)		Negative(1)		Net
Caps
1MO LIB	$	128,750,000	$	21	$	—	$	21
Futures
5-years US T-Note		111,100,000		254,906		1,563		253,344
10-years US T-Note		319,500,000		3,650,938		243,609		3,407,328
Total futures		430,600,000		3,905,844		245,172		3,660,672
Swaps
3MO LIB		174,500,000		—		17,788,614		(17,788,614	)
Total swaps		174,500,000		—		17,788,614		(17,788,614	)
Credit Derivatives
CMBX		67,000,000		1,779,458		—		1,779,458
TRX		68,500,000		—		481,377		(481,377	)
S&P 500 Put Options		4,000,000		3,770		—		3,770
Call Option CBOE SPX Vol Index		31,000,000		5,426		—		5,426
Total credit derivatives		170,500,000		1,788,654		481,377		1,307,277
Total derivatives	$	904,350,000	$	5,694,519	$	18,515,163	$	(12,820,644	)

December 31, 2011

			Fair Value
Contract Type	Notional		Positive(1)		Negative(1)		Net
Caps
1MO LIB	$	240,000,000	$	1,819	$	—	$	1,819
Futures
5-years US T-Note		20,600,000		—		46,672		(46,672	)
10-years US T-Note		176,000,000		—		2,273,453		(2,273,453	)
Total futures		196,600,000		—		2,320,125		(2,320,125	)
Swaps
1MO LIB		10,000,000		—		100,438		(100,438	)
3MO LIB		314,250,000		—		23,322,963		(23,322,963	)
Total swaps		324,250,000		—		23,423,401		(23,423,401	)
Total derivatives	$	760,850,000	$	1,819	$	25,743,526	$	(25,741,707	)

(1) Included in derivative instruments, at fair value, in the accompanying consolidated balance sheet

F-33

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

The following table indicates the net realized gains/(losses) and unrealized appreciation/(depreciation) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010.

	For the years ended December 31,
Contract Type	2012			2011			2010
Caps	$	(1,798	)	$	(97,375	)	$	(523,939	)
Futures		(16,987,085	)		(50,943,683	)		(3,101,616	)
Swaps		(13,616,493	)		(30,333,068	)		(17,121,528	)
Credit Derivatives		(5,045,613	)		—			—
Total	$	(35,650,989	)	$	(81,374,126	)	$	(20,747,083	)

The Company’s counterparties held $32.2 million, $36.8 million and $19.4 million of cash margin as collateral for derivatives as of December 31, 2012, 2011 and 2010, respectively.

Credit Risk-Related Contingent Features

The Company has agreements with certain of its derivative counterparties that contain a provision whereby if the Company defaults on certain of its indebtedness, the Company could also be declared in default on its derivatives, resulting in an acceleration of payment under the derivatives.

Valuation Hierarchy

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP (FASB—Accounting Standards Codification Topic 820), the methodologies used for valuing such instruments have been categorized into three broad levels as follows:

Level 1—Quoted prices in active markets for identical instruments.

Level 2—Valuations based principally on other observable market parameters, including

• Quoted prices in active markets for similar instruments,

• Quoted prices in less active or inactive markets for identical or similar instruments,

• Other observable inputs (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates), and

• Market corroborated inputs (derived principally from or corroborated by observable market data).

Level 3—Valuations based significantly on unobservable inputs.

• Valuations based on third party indications (broker quotes, counterparty quotes or pricing services) which were, in turn, based significantly on unobservable inputs or were otherwise not supportable as Level 2 valuations.

• Valuations based on internal models with significant unobservable inputs.

Pursuant to the authoritative guidance, these levels form a hierarchy. The Company follows this hierarchy for its financial instruments measured at fair value on a recurring basis. The classifications are based on the lowest level of input that is significant to the fair value measurement.

F-34

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

It is the Company’s policy to determine when transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting period.

The following table summarizes the Company’s financial assets and liabilities, that are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at December 31, 2012 and 2011:

December 31, 2012

	Outstanding Face Amount		Fair Value
			Level 1		Level 2			Level 3		Total
	($ in thousands)
Assets:
CMBS*	$	781,271	$	—	$	806,773		$	—	$	806,773
CMBS interest-only*		234,463		—		27,143			—		27,143
GNMA interest-only*		2,039,528		—		120,997			—		120,997
FHLMC interest-only*		222,515		—		9,999			—		9,999
GN construction securities*		43,023		—		51,843			—		51,843
GN permanent securities*		105,566		—		108,807			—		108,807
Mortgage loan receivable held for investment		331,720		—		—			331,720		331,720
Mortgage loan receivable held for sale		623,644		—		—			674,414		674,414
FHLB Stock*		13,100		13,100		—			—		13,100
Liabilities:
Repurchase agreements—short term		359,331		—		359,331			—		359,331
Repurchase agreements—long term		434,586		—		434,586			—		434,586
Long term financing		103,756		—		—			106,517		106,517
Borrowings from the FHLB		262,000		—		—			262,787		262,787
Senior unsecured notes		325,000		—		333,938			—		333,938
Nonhedge derivatives*		904,350		—		(12,821	)		—		(12,821	)

December 31, 2011

	Outstanding Face Amount		Fair Value
			Level 1		Level 2			Level 3		Total
	($ in thousands)
Assets:
CMBS*	$	1,619,706	$	—	$	1,644,748		$	—	$	1,644,748
CMBS interest-only*		275,293		—		19,253			—		19,253
GNMA interest-only*		1,453,721		—		97,682			—		97,682
FHLMC interest-only*		119,418		—		1,753			—		1,753
FNMA*		4,773		—		4,296			—		4,296
GN construction securities*		24,801		—		31,695			—		31,695
GN permanent securities*		140,211		—		145,643			—		145,643
Mortgage loan receivable held for investment		259,088		—		—			259,088		259,088
Mortgage loan receivable held for sale		258,842				—			272,386		272,386
Liabilities:
Repurchase agreements—short term		618,257		—		618,257			—		618,257
Repurchase agreements—long term		978,820		—		978,820			—		978,820
Long term financing		18,564		—		—			18,700		18,700
Nonhedge derivatives*		760,850		—		(25,742	)		—		(25,742	)

* Measured at fair value on a recurring basis. The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

F-35

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

9.     PARTNERS’ CAPITAL

On April 20, 2010, 910,491 Class A-2 Common units were issued to a new member of the management team, with a Threshold Amount, as defined in the Company’s Limited Liability Company Agreement (“LLC Agreement”), and a market value of $0.85 per unit. The Threshold Amount is the dollar amount equal to the amount that would, in the reasonable determination of the Company’s Board of Directors (the “Board”), be distributed with respect to one of the Company’s then issued and outstanding Original Class A-2 Common Units, as defined in the Company’s LLC Agreement, with a Threshold Amount of zero dollars ($0).

On June 4, 2012, 1,127,543 Class A-2 Common Units and 31,451.61 Series B Participating Preferred Units were granted to a new member of the management team. The grants issued are subject to a thirty-six (36) month vesting period, commencing on January 1, 2012. In addition, the new member purchased 24,193.55 Series B Participating Preferred Units as well as received an option to purchase an additional 24,193.55 Series B Participating Preferred Units within one year of grant date at a price of $124 per unit. The fair value of the units at grant date was $130 per unit, and the difference is recognized to deferred compensation expense over the vesting period.

Effective August 9, 2011, the Company converted from a limited liability company to a limited liability limited partnership.

Series B Participating Preferred Units Offering

In August 2011, the Company completed a private offering of its Series B Participating Preferred units. Certain members of the management team, the TowerBrook Funds, GI Partners, as well as other investors purchased 2,075,619 Series B Participating Preferred units of the Company (the “Series B Preferred” or the “Interests”) at a price of $124.00 per unit or $257,376,700. Additional distributions to both the Series A and B Preferred unit holders and Common unit holders will be made based on their relative percentage of outstanding units at the time, as defined in the Limited Liability Limited Partnership Agreement.

Cash Distributions to Partners

Distributions (other than tax distributions which are described below) will be made in the priorities described below at such times and in such amounts as the Company’s Board of Directors determines as follows:

First, to the holders of Series A and B Preferred pro rata based on the then Series A and B Participating Preferred Unreturned Capital Value (as defined in the LLC Agreement) of each such holder’s Interests; and

Second, to the holders of Series A and B Participating Preferred Units and Class A Common Units as follows: (A) to the holders of the Series A and B Participating Preferred Units (pro rata based on the number of then issued and outstanding Series A and B Participating Preferred Units), an amount equal to the product of (x) the Series A and B Participating Preferred Percentage as of the date of such distribution multiplied by (y) the amount to be distributed; and (B) to the holders of the Class A Common Units, (pro rata based on the then Aggregate Class A Common Units Outstanding), including any deemed owners of Class A-2 Common Units, an

F-36

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

amount equal to the product of (xx) the Class A Common Percentage as of the date of such distribution multiplied by (yy) the amount to be distributed, taking into account the relevant Threshold Amounts, as appropriate.

Notwithstanding the foregoing, subject to available liquidity as determined by Company’s Board of Directors, the Company intends to make quarterly tax distributions equal to a partner’s “Quarterly Estimated Tax Amount”, which shall be computed (as more fully described in the Company’s LLC agreement) for each partner as the product of (x) the federal taxable income (or alternative minimum taxable income, as the case may be, allocated by the Company to such partner in respect of the partnership interests of the Company held by such partner and (y) the highest marginal blended federal, state and local income tax rate applicable to an individual residing in New York, NY, taking into account for federal income tax purposes, the deductibility of state and local taxes.

Allocation of Income and Loss

Income and losses are allocated among the partners in a manner to reflect as closely as possible the amount each partner would be distributed under the LLLP agreement upon liquidation of the Company’s assets.

Accumulated Other Comprehensive Income Roll-forward

Accumulated other comprehensive income consists of unrealized gains on investments in real estate securities. The following is the rollforward of accumulated other comprehensive income included in capital:

	Accumulated Other Comprehensive Income
Beginning balance, January 1, 2010	$	15,335,763
change(1)		24,290,975
Ending balance, December 31, 2010		39,626,738
change(1)		(11,798,014	)
Ending balance, December 31, 2011		27,828,724
change(1)		4,319,916
Ending balance, December 31, 2012	$	32,148,640

(1) Amount of change reflects increases (decreases) in unrealized gains/(losses) related to investments in real estate securities, net of reclassification adjustments.

10.     RELATED PARTY TRANSACTIONS

The Company entered into a loan referral agreement with Meridian Capital Group LLC (“Meridian”), which is an affiliate of the chairman of the Company’s board of managers and an investor in the Company. The agreement provides for the payment of referral fees for loans originated pursuant to a formula based on the Company’s net profit, as defined in the agreement, payable annually in arrears. While the arrangement gives rise to a potential conflict of interest, full disclosure is given and the borrower waives the conflict in writing. This agreement is cancelable by the Company based on the occurrence of certain events, or by Meridian for nonpayment of amounts due under the agreement. The Company incurred fees of

F-37

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

$1,683,594 during 2012 for loans originated in accordance with this agreement, of which $1,683,594 is accrued for and paid as of December 31, 2012. The Company incurred fees of $219,597 during 2011 for loans originated in accordance with this agreement, of which $219,597 is accrued for and payable as of December 31, 2011. The Company incurred fees of $437,548 during 2010 for loans originated in accordance with this agreement. These fees are reflected in operating expenses in the accompanying consolidated statement of income.

11.     COMPENSATION PLANS

The 2008 Incentive Equity Plan of the Company, was adopted by the Board on September 22, 2008 (the “2008 Plan”), and provides certain executives, other key employees and directors of the Company or any other Ladder Company (as defined in the 2008 Plan) with additional incentives.

As discussed in Note 9, on April 20, 2010, 910,491 Class A-2 Common Units were granted to an executive of the Company. The grants issued are subject to a forty-two (42) month vesting period, commencing on April 20, 2010. On June 4, 2012, 1,127,543 Class A-2 Common Units and 31,451.61 Series B Participating Preferred Units were granted to a new member of the management team. The grants issued are subject to a thirty-six (36) month vesting period, commencing on January 1, 2012. In addition, the new member purchased 24,193.55 Series B Participating Preferred Units as well as received an option to purchase an additional 24,193.55 Series B Participating Preferred Units within one year of grant date at a price of $124 per unit. The fair value of the units at grant date was $130 per unit, and the difference is recognized to deferred compensation expense over the vesting period.

The Company has estimated the fair value of such units granted utilizing a discounted cash flow model as of the last capital call date. Key input assumptions have been estimated based on certain assumptions with respect to management’s prior experience, current market conditions and projected conditions of the commercial real estate industry. All units issued under the 2008 Plan are amortized over the units’ vesting periods and charged against income. The Company recognized equity-based compensation expense of $2,407,773, $150,696 and $173,803 for the years ended December 31, 2012, 2011 and 2010, respectively.

A summary of the grants is presented below:

	For the Years Ended December 31,
	2012					2011					2010
	Number of Units		Weighted Average Fair Value			Number of Units		Weighted Average Fair Value			Number of Units		Weighted Average Fair Value
Grants—Class A-2 Common Units		1,127,543	$	1,360,106			—	$	—			910,491	$	23,107
Grants—Series B Participating Preferred Units		31,452		4,088,710
Amortization to compensation expense
Class A-2 Common Units				(515,300	)				(150,696	)				(173,803	)
Series B Participating Preferred Units				(1,892,473	)				—					—
Total amortization to compensation expense			$	(2,407,773	)			$	(150,696	)			$	(173,803	)

F-38

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

Deferred Compensation Plan

In February 2012, the employees contributed $2,156,283 to the Phantom Equity Investment Plan. In December 2012, the employees contributed $4,275,371 to the Phantom Equity Investment Plan. Under the plan, there are both elective and mandatory contributions to the plan based upon a minimum level of total compensation. Mandatory contributions are subject to one-third vesting over a three year period following the applicable plan year in which the related compensation was earned. Elective contributions are immediately vested upon contribution. The compensation expense relating to the deferred compensation plan is recognized at the contribution date. The employees receive phantom units of Series B Participating Preferred Units at the fair market value of the units.

12.     COMMITMENTS

Leases

The Company entered into an operating lease for its office space. The lease commenced on January 5, 2009 and expires on May 30, 2015. There is an option to renew the lease for an additional five years at an increased monthly rental. In 2011, the Company entered into 2 new leases for both its primary office space as well as for a secondary space. The lease on the primary office space commenced on October 2, 2011 and expires on January 31, 2022. The lease for the second location commenced on September 15, 2011 and expires on November 30, 2014. In 2012, the Company entered into one new lease for secondary office space. The lease commenced on May 1, 2012 and expires on May 1, 2015. The following is a schedule of future minimum rental payments required under the above operating leases:

Year ended December 31,	Amount
2013	$	1,814,847
2014		1,814,045
2015		1,381,992
2016		1,125,069
2017		1,180,400
Thereafter		4,819,967
Total	$	12,136,320

GN Construction Loan Securities

The Company committed to purchase GNMA construction loan securities over a period of twelve to fifteen months. As of December 31, 2012, the Company’s commitment to purchase these securities at fixed prices ranging from 101.13 to 107.25 was $178,738,909, of which $42,030,253 was funded, with $136,708,656 remaining to be funded. As of December 31, 2011, the Company’s commitment to purchase these securities at fixed prices ranging from 101.13 to 106.63 totaled $144,359,451, of which $28,021,632 was funded, with $116,337,819 remaining to the funded. The fair value of those commitments at December 31, 2012 and 2011 was $3.4 million and $4.1 million, respectively, which was determined by pricing services as adjusted for estimated liquidity discounts and is included in other liabilities on the balance sheet.

F-39

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

13.     RISKS AND UNCERTAINTIES

The following summary of certain risk factors is not intended to be a comprehensive summary of all of the risks of the Company’s investments or all of risks inherent in investing in the Company.

Interest Rate Risk

The nature of the Company’s business exposes it to market risk arising from changes in interest rates. Changes, both increases and decreases, in the rates the Company is able to charge its borrowers, the yields the Company is able to achieve in its securities investments, and the Company’s cost of borrowing directly impacts its net income. The Company’s interest income stream from loans and securities is generally fixed over the life of its assets, whereas it uses floating-rate debt to finance a significant portion of its investments. Another component of interest rate risk is the effect changes in interest rates will have on the market value of the assets the Company acquires. The Company faces the risk that the market value of its assets will increase or decrease at different rates than that of its liabilities, including its hedging instruments. The Company mitigates interest rate risk through utilization of hedging instruments, primarily interest rate swap and futures agreements. Interest rate swap and futures agreements are utilized to hedge against future interest rate increases on the Company’s borrowings and potential adverse changes in the value of certain assets that result from interest rate changes. The Company generally seeks to hedge assets that have a duration longer than two years, including newly originated conduit first mortgage loans, securities in the Company’s CMBS portfolio if long enough in duration, and most of its U.S. Agency Securities portfolio.

Market Value Risk

The Company’s securities investments are reflected at their estimated fair value. The change in estimated fair value of securities available-for-sale is reflected in accumulated other comprehensive income. The estimated fair value of these securities fluctuates primarily due to changes in interest rates and other factors. Generally, in a rising interest rate environment, the estimated fair value of these securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of these securities would be expected to increase. As market volatility increases or liquidity decreases, the market value of the Company’s assets may be adversely impacted. The Company’s fixed rate mortgage loan portfolio is subject to the same risks. However, to the extent those loans are classified as held for sale, they are reflected at the lower of cost or market. Otherwise, held for investment mortgage loans are reflected at values equal to the unpaid principal balances net of certain fees, costs and loan loss allowances.

Liquidity Risk

Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which the Company invests, and may at the same time lead to a significant contraction in short term and long term debt and equity funding sources. A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell the Company’s investments or determine their fair values. As a result, the Company may be unable

F-40

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

to sell its investments, or only able to sell its investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that the Company’s borrowing arrangements or other arrangements for obtaining leverage will continue to be available, or if available, will be available on terms and conditions acceptable to the Company. In addition, a decline in market value of the Company’s assets may have particular adverse consequences in instances where it borrowed money based on the fair value of its assets. A decrease in the market value of the Company’s assets may result in the lender requiring it to post additional collateral or otherwise sell assets at a time when it may not be in the Company’s best interest to do so. Finally, the Company’s captive insurance company subsidiary is subject to state regulations which require that dividends may only be made with regulatory approval.

Credit Risk

The Company is subject to varying degrees of credit risk in connection with its investments. The Company seeks to manage credit risk by performing deep credit fundamental analysis of potential assets and through ongoing asset management. The Company’s investment guidelines do not limit the amount of its equity that may be invested in any type of its assets, however, investments greater than a certain size are subject to review of the Risk and Underwriting Committee of the Board of Directors.

Credit Spread Risk

Credit spread risk is the risk that interest rate spreads between two different financial instruments will change. In general, fixed-rate commercial mortgages and CMBS are priced based on a spread to Treasury swaps. The Company generally benefits if credit spreads narrow during the time that it holds a portfolio of mortgage loans or CMBS investments, and the Company may experience losses if credit spreads widen during the time that it holds a portfolio of mortgage loans or CMBS investments. The Company actively monitors its exposure to changes in credit spreads and The Company may enter into credit total return swaps or take positions in other credit related derivative instruments to moderate its exposure against losses associated with a widening of credit spreads.

Risks Related to Real Estate

Real estate and real estate-related 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 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, which could also cause the Company to suffer losses.

Covenant Risk

In the normal course of business, the Company enters into loan agreements with certain lenders to finance its real estate investment transactions. These loan agreements contain,

F-41

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

among other conditions, events of default and various covenants and representations. If such events are not cured by the Company or waived by the lenders, the lenders may decide to curtail or limit extension of credit, and the Company may be forced to repay its loans. For the years ended December 31, 2012, 2011 and 2010, the Company believes it was in compliance with all covenants.

Diversification Risk

The assets of the Company are concentrated in the real estate sector. Accordingly, the investment portfolio of the Company may be subject to more rapid change in value than would be the case if the Company were to maintain a wide diversification among investments or industry sectors. Furthermore, even within the real estate sector, the investment portfolio may be relatively concentrated in terms of geography and type of real estate investment. This lack of diversification may subject the investments of the Company to more rapid change in value than would be the case if the assets of the Company were more widely diversified.

Concentrations of Market Risk

Concentrations of market risk may exist with respect to the Company’s investments. Market risk is a potential loss the Company may incur as a result of changes in the fair values of its investments. The Company may also be subject to risk associated with concentrations of investments in geographic regions and industries.

Regulatory Risk

The Company established a broker-dealer subsidiary, Ladder Capital Securities LLC (“LCS”), which was initially licensed and capitalized to do business in July 2010. LCS is required to be compliant with the Financial Industry Regulatory Authority (“FINRA”) and Securities and Exchange Commission (“SEC”) requirements on an ongoing basis and is subject to multiple operating and reporting requirements that all broker-dealer entities are subject to. This governance is an increased level of compliance to operate within the broker-dealer requirements. In addition, Tuebor is subject to state regulation as a captive insurance company. If LCS or Tuebor fail to comply with regulatory requirements, they could be subject to loss of their licenses and registration and/or economic penalties.

14.     SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how management reviews and manages its business. These reportable segments include Securities, Loans and Real Estate. The Securities segment includes all of the Company’s activities related to real estate securities, which include CMBS and U.S. Agency securities. The Loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The Real Estate segment includes net lease real estate held for investment and selected other real estate investments. Corporate/Other includes our investments in joint ventures, other asset management activities and operating expenses.

F-42

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

The Company evaluates performance based on the following financial measures for each segment:

	Securities			Loans			Real Estate			Corporate/ Other(1)			Company Total
	($ in thousands)
2012
Interest income	$	80,613		$	56,835		$	—		$	(1,250	)	$	136,198
Interest expense		(15,807	)		(9,244	)		(3,595	)		(7,826	)		(36,472	)
Net interest income (expense)		64,806			47,591			(3,595	)		(9,076	)		99,726
Operating lease income		—			—			8,331			—			8,331
Sales of investments, net		19,014			152,829			1,275			1,784			174,902
Fee income		251			6,886			823			828			8,788
Total other income		19,265			159,715			10,429			2,612			192,021
Net result from derivative transactions		(10,415	)		(25,236	)		—			—			(35,651	)
Operating expenses		(107	)		(5,635	)		(5,925	)		(60,957	)		(72,624	)
Depreciation		—			—			(3,093	)		(547	)		(3,640	)
Provision for loan losses		—			(449	)		—			—			(449	)
Total costs and expenses		(10,522	)		(31,320	)		(9,018	)		(61,504	)		(112,364	)
Earnings from investment in equity method investee		—			—			—			1,256			1,256
Tax expense		—			—			—			(2,584	)		(2,584	)
Segment profit (loss)		73,549			175,986			(2,184	)		(69,296	)		178,055
Total assets		1,125,562			949,651			380,022			173,795			2,629,030
2011
Interest income	$	97,828		$	34,926		$	—		$	543		$	133,297
Interest expense		(24,281	)		(10,374	)		(1,176	)		(5	)		(35,836	)
Net interest income (expense)		73,547			24,552			(1,176	)		538			97,461
Operating lease income		—			—			2,290			—			2,290
Sales of investments, net		20,081			66,301			—			(30	)		86,352
Fee income		—			2,742			1			401			3,144
Total other income		20,081			69,043			2,291			371			91,786
Net result from derivative transactions		(30,572	)		(50,802	)		—			—			(81,374	)
Operating expenses		—			(1,193	)		(94	)		(34,239	)		(35,526	)
Depreciation		—			—			(704	)		(340	)		(1,044	)
Provision for loan losses		—			—			—			—			—
Total costs and expenses		(30,572	)		(51,995	)		(798	)		(34,579	)		(117,944	)
Earnings from investment in equity method investee		—			—			—			347			347
Tax expense		—			—			—			(1,510	)		(1,510	)
Segment profit (loss)		63,056			41,600			317			(34,833	)		70,140
Total assets		1,945,070			514,038			28,835			166,446			2,654,389
2010
Interest income	$	110,571		$	18,347		$	—		$	383		$	129,301
Interest expense		(40,333	)		(8,406	)		(338	)		203			(48,874	)
Net interest income (expense)		70,238			9,941			(338	)		586			80,427
Operating lease income		—			—			1,012			—			1,012
Sales of investments, net		22,086			30,533			2,419			—			55,038
Fee income		—			1,248			—			154			1,402
Total other income		22,086			31,781			3,431			154			57,452
Net result from derivative transactions		(12,729	)		(8,018	)		—			—			(20,747	)
Operating expenses		(5	)		(53	)		(18	)		(26,664	)		(26,740	)
Depreciation		—			—			(263	)		(146	)		(409	)
Provision for loan losses		—			(885	)		—			—			(885	)
Total costs and expenses		(12,734	)		(8,956	)		(281	)		(26,810	)		(48,781	)
Earnings from investment in equity method investee		—			—			—			—			—
Tax expense		—			—			—			(600	)		(600	)
Segment profit (loss)		79,590			32,766			2,812			(26,670	)		88,498
Total assets		1,925,510			509,804			25,669			126,805			2,587,788

F-43

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

(1) Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company’s joint venture investment and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $13.1 million as of December 31, 2012.

15.     EARNINGS PER UNIT

The Company accounts for earnings per unit in accordance with ASC 260 and related guidance, which requires two calculations of earnings per unit (EPU) to be disclosed: basic EPU and diluted EPU. Under ASC Subtopic 260-10-45, as of January 1, 2009 unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our Participating Preferred Units and phantom units, are considered participating securities for purposes of calculating EPU for our common units. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPU allocated to common units, as shown in the table below.

The numerator for basic and diluted earnings per unit is net earnings attributable to common unitholders reduced by dividends paid and earnings attributable to participating securities. The denominator for basic earnings per unit is the weighted average number of common units outstanding during the period. The denominator for diluted earnings per unit is weighted average units outstanding adjusted for the effect of dilutive unvested grants awards for common units as described in Note 11. Compensation Plans.

The following is a reconciliation of the weighted average basic number of common units outstanding to the diluted number of common and common unit equivalent units outstanding and the calculation of earnings per unit using the two-class method:

	Year Ended December 31,
	2012			2011			2010
	(In thousands except unit amounts)
Net income attributable to Preferred and Common Unit Holders	$	178,104		$	70,125		$	88,498
Dividends Paid(1):
Common units		(15,235	)		(8,783	)		(8,589	)
Preferred units		(60,926	)		(35,196	)		(34,358	)
Total dividends paid to common and preferred unit holders		(76,161	)		(43,979	)		(42,947	)
Undistributed earnings:
Common units		20,389			5,229			9,110
Preferred units		81,554			20,916			36,441
Total undistributed earnings attributable to common and preferred unit holders	$	101,943		$	26,145		$	45,551
Weighted average common units outstanding:
Weighted average common units outstanding (basic)		20,995,657			18,130,310			14,611,127
Weighted average common units outstanding (diluted)		22,081,046			21,423,312			21,195,690
Basic earnings per common unit:
Distributed	$	0.73		$	0.48		$	0.59
Undistributed		0.97			0.29			0.62
	$	1.70		$	0.77		$	1.21
Diluted earnings per common unit:
Distributed	$	0.69		$	0.41		$	0.41
Undistributed		0.92			0.24			0.43
	$	1.61		$	0.65		$	0.84

F-44

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2012, 2011 AND 2010

(1) The Company pays quarterly dividends in arrears, so a portion of the dividends paid in each calendar year relate to the prior year’s earnings.

16.     SUBSEQUENT EVENTS

The Company has evaluated subsequent events through April 29, 2013 and determined disclosure of the following is necessary:

Master Repurchase Agreement

On April 10, 2013, the Company has amended its existing master repurchase agreement and facility with one of its lenders in order to finance its lending activities. The existing agreement was modified to provide, among other things, an increase in financing availability from $50 million to $250 million, an initial term of one year with up to two 1 year extensions and the ability to finance a broader range of loan assets that may include transitional loans and condominium loans.

New Credit Agreement

On January 24, 2013, the Company has entered into a $50 million credit agreement with one of its multiple committed financing counterparties in order to finance its securities and lending activities.

COMM 2013-LC6 Securitization

The Company participated in a securitization transaction by selling originated first mortgage loans totaling $522.2 million, of which, $440.2 million was included in Mortgage loan receivables held for sale as of December 31, 2012. The transaction settled on January 30, 2013.

LCCM 2013-GCP Securitization

The Company contributed one loan to a single asset securitization transaction by selling a first mortgage loan, originated in 2013, totaling $275.0 million. The transaction settled on March 21, 2013.

F-45

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2013		December 31, 2012
Assets
Cash and cash equivalents	$	33,688,215	$	43,795,663
Cash collateral held by broker		89,915,552		65,373,470
Mortgage loan receivables held for investment, at amortized cost		293,207,458		326,318,550
Mortgage loan receivables held for sale		610,898,322		623,332,620
Real estate securities, available-for-sale:
Investment grade commercial mortgage backed securities		711,753,246		806,773,207
GN construction securities		69,384,014		51,842,317
GN permanent securities		88,841,599		108,807,295
Interest only securities		187,364,592		158,138,700
Real estate, net		395,677,886		380,021,672
Investment in equity method investee		13,389,557		12,674,652
FHLB stock		21,150,000		13,100,000
Derivative instruments		1,268,572		5,694,519
Due from brokers		45,855		1,901,713
Accrued interest receivable		11,013,257		12,082,604
Other assets		13,896,114		19,172,873
Total assets	$	2,541,494,239	$	2,629,029,855
Liabilities and Capital
Liabilities
Repurchase agreements	$	382,160,915	$	793,916,703
Borrowings under credit agreement		30,000,000		—
Long term financing		153,989,013		103,755,644
Borrowings from the FHLB		423,000,000		262,000,000
Senior unsecured notes		325,000,000		325,000,000
Derivative instruments		18,321,747		18,515,163
Accrued expenses		36,372,275		19,273,388
Other liabilities		13,618,267		5,379,088
Total liabilities		1,382,462,217		1,527,839,986
Commitments and contingencies
Capital
Partners’ capital
Series A preferred units		816,742,101		782,832,687
Series B preferred units		284,636,341		272,818,838
Common units		56,387,908		44,956,178
Total partners’ capital		1,157,766,350		1,100,607,703
Noncontrolling interest		1,265,672		582,166
Total capital		1,159,032,022		1,101,189,869
Total liabilities and capital	$	2,541,494,239	$	2,629,029,855

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

F-46

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the three months ended March 31,
	2013			2012
Net interest income
Interest income	$	31,261,332		$	34,056,575
Interest expense		11,322,239			7,603,977
Net interest income		19,939,093			26,452,598
Other income
Operating lease income		6,484,040			864,232
Sale of loans, net		85,157,414			41,249,042
Sale of securities, net		2,564,893			1,311,847
Sale of real estate, net		3,697,548			1,474,585
Fee income		1,438,501			499,641
Total other income		99,342,396			45,399,347
Total net interest income and other income		119,281,489			71,851,945
Costs and expenses
Net result from derivative transactions		(2,269,709	)		2,406,803
Operating expenses		13,564,847			8,165,916
Fee expense		12,704,204			6,320,214
Depreciation		3,123,583			350,873
Provision for loan losses		150,000			—
Total costs and expenses		27,272,925			17,243,806
Income before earnings from investment in equity method investee		92,008,564			54,608,139
Earnings from investment in equity method investee		393,980			287,443
Income before taxes		92,402,544			54,895,582
Tax expense		2,067,763			304,946
Net income		90,334,781			54,590,636
Net (income) loss attributable to noncontrolling interest		(27,244	)		(3,906	)
Net income attributable to preferred and common unit holders	$	90,307,537		$	54,586,730
Earnings per common units:
Basic	$	0.83		$	0.54
Diluted	$	0.80		$	0.51
Weighted average common units outstanding:
Basic		21,712,382			20,293,079
Diluted		22,550,855			21,423,312

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

F-47

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the three months ended March, 31
	2013			2012
Net Income	$	90,334,781		$	54,590,636
Other comprehensive income (loss)
Unrealized gains on securities
Unrealized gain (loss) on real estate securities, available for sale		737,856			8,283,100
Reclassification adjustment for gains included in net income		(2,564,893	)		(1,311,847	)
Total other comprehensive income (loss)		(1,827,037	)		6,971,253
Comprehensive income		88,507,744			61,561,889
Comprehensive (income) loss attributable to noncontrolling interest		(27,244	)		(3,906	)
Comprehensive income attributable to preferred and common unit holders	$	88,480,500		$	61,557,983

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

F-48

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Unaudited)

	Partners’ Capital Units						Partners’ Capital
	Series A Preferred Units		Series B Preferred Units		Common Units		Series A Preferred Units			Series B Preferred Units			Common Units			Total Partners’ Capital			Noncontrolling Interest		Total Capital
Balance, December 31, 2012		6,115,500		2,131,265		22,550,855	$	782,832,687		$	272,818,838		$	44,956,178		$	1,100,607,703		$	582,166	$	1,101,189,869
Contributions		—		—		—		—			—			—			—			656,262		656,262
Distributions		—		—		—		(18,863,215	)		(6,573,867	)		(6,359,272	)		(31,796,354	)		—		(31,796,354	)
Equity based compensation		—		—		—		—			361,159			113,342			474,501			—		474,501
Net income (loss)		—		—		—		53,862,333			18,402,517			18,042,687			90,307,537			27,244		90,334,781
Other comprehensive income		—		—		—		(1,089,704	)		(372,306	)		(365,027	)		(1,827,037	)		—		(1,827,037	)
Balance, March 31, 2013		6,115,500		2,131,265		22,550,855	$	816,742,101		$	284,636,341		$	56,387,908		$	1,157,766,350		$	1,265,672	$	1,159,032,022

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

F-49

LADDER CAPITAL FINANCE HOLDINGS LLLP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the three months ended March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	90,334,781		$	54,590,636
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,123,583			350,873
Unrealized (gain) loss on derivative instruments		4,252,531			(2,687,111	)
Loan loss provision		150,000			—
Cash collateral held by broker—derivatives		(2,854,716	)		3,457,008
Amortization of equity based compensation		474,501			37,674
Amortization of deferred financing costs included in interest expense		844,409			648,887
Accretion/amortization of discount, premium and other fees		12,212,508			7,131,195
Realized gain on sale of real estate securities		(2,564,892	)		(1,311,847	)
Realized gain on sale of mortgage loan receivables		(85,157,414	)		(41,249,042	)
Realized gain on sale of real estate		(3,697,548	)		(1,474,585	)
Origination of mortgage loan receivables held for sale		(843,902,500	)		(411,846,898	)
Repayment of mortgage loan receivables held for sale		545,079			952,117
Proceeds from sales of mortgage loan receivables held for sale		949,269,406			502,274,580
Accrued interest receivable		1,069,347			665,832
Earnings on equity method investee		(393,980	)		(287,443	)
Distributions of return on capital from investment in equity method investee		—			300,000
Changes in operating assets and liabilities:
Due to broker		—			1,120,237
Due from broker		1,855,858			218,690
Other assets		4,695,523			(5,311,417	)
Accrued expenses and other liabilities		19,334,685			(8,328,657	)
Net cash provided by (used in) operating activities		149,591,161			99,250,729
Cash flows used in investing activities:
Acquisition of fixed assets		—			(18,340	)
Purchases of real estate securities		(85,465,685	)		(236,072,436	)
Repayment of real estate securities		99,565,578			256,589,484
Proceeds from sales of real estate securities		41,635,894			31,733,902
Purchase of FHLB stock		(8,050,000	)		—
Origination and purchases of mortgage loan receivables held for investment		(96,414,750	)		(81,955,828	)
Repayment of mortgage loan receivables held for investment		122,063,197			60,135,897
Reduction (addition) of cash collateral held by broker		(21,687,366	)		(2,125,711	)
Addition of deposits received for loan originations		6,018,381			5,845,023
Capital contributions to equity method investee		(782,654	)		(3,264,812	)
Distributions of return of capital from equity method investee		461,729			3,856,253
Purchases of real estate		(22,990,741	)		(90,643,909	)
Proceeds from sale of real estate		8,045,319			70,883,494
Net cash provided by (used in) investing activities		42,398,902			14,963,017
Cash flows from financing activities:
Deferred financing costs		(415,000	)		—
Repayment of repurchase agreement		(2,284,776,625	)		(4,657,450,446	)
Proceeds from repurchase agreement		1,873,020,837			4,611,618,403
Proceeds from borrowings under credit agreements		30,000,000			—
Proceeds from long-term financing		50,243,577			11,000,000
Repayment of long-term financing		(10,208	)		(9,214	)
Proceeds from FHLB borrowings		1,654,000,000			—
Repayments of FHLB borrowings		(1,493,000,000	)		—
Purchase of derivative instruments		(20,000	)		—
Partners’ capital distributions		(31,796,354	)		(22,529,230	)
Capital contributed by a noncontrolling interest		656,262			—
Net cash provided by (used in) financing activities		(202,097,511	)		(57,370,487	)
Net increase/(decrease) in cash		(10,107,448	)		56,843,259
Cash at beginning of period		43,795,663			83,350,445
Cash at end of period	$	33,688,215		$	140,193,704
Supplemental information:
Cash paid for interest	$	7,307,150		$	7,276,735
Cash paid for taxes	$	2,412,720		$	104,946

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

F-50

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    ORGANIZATION AND OPERATIONS

On February 25, 2008, Ladder Capital Finance Holdings LLC (the “LLC”) was organized as a Delaware limited liability company. Effective August 9, 2011, the LLC converted from a limited liability company to a limited liability limited partnership and the members of the LLC were admitted as partners in a newly formed company, Ladder Capital Finance Holdings LLLP (the LLC and Ladder Capital Finance Holding LLLP are collectively referred to as the “Company”). The Company serves as the holding company for its wholly-owned or controlled subsidiaries that collectively operate as a specialty finance company that provides comprehensive financing solutions to the commercial real estate industry. The Company’s existence is perpetual unless dissolved and terminated in accordance with the provisions of the corresponding operating agreements.

The Company conducted and completed a private offering of its Series A participating preferred units (the “Offering”) and a private offering of its Series B participating preferred units (the “Series B Offering”) and, through its wholly-owned subsidiaries, is using the proceeds of the Offering and the Series B Offering to originate and invest in a diverse portfolio of real estate-related assets. The Company’s principal business activity is to originate and invest in the following asset classes: fixed-rate commercial mortgages, interim floating-rate commercial mortgages, senior and junior interests in commercial mortgages, mezzanine loans, commercial mortgage-backed securities (“CMBS”), and other commercial real estate securities guaranteed by a U.S. government agency or by a government sponsored entity (“GSE”) (together, “U.S. Agency Securities), net leased and other commercial real estate and special investment situations.

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, the unaudited financial information for the interim periods presented in this report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position and cash flows. The interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2012, which are included in the Company’s annual report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. The interim consolidated financial statements have been prepared, without audit, and do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the Company’s accounts and those of its subsidiaries which are wholly-owned or controlled by the Company. All significant intercompany transactions and balances have been eliminated.

F-51

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Noncontrolling interests in consolidated subsidiaries are defined as “the portion of the equity (net assets) in the subsidiaries not attributable, directly or indirectly, to a parent.” Noncontrolling interests are presented as a separate component of capital in the consolidated balance sheets. In addition, the presentation of net income attributes earnings to preferred and common unit holders (controlling interest) and noncontrolling interests.

Certain prior period amounts have been revised to reflect amounts associated with the noncontrolling interests of the preferred shareholders of the Company’s real estate investment trust (“REIT”) subsidiary. Specifically, the prior period amounts have been revised to separately reflect the allocation of $7,813 of income and related distributions to noncontrolling interests in the consolidated statements of income and of cash flows. These balances and amounts have previously been classified in the balances and amounts attributable to partners’ capital (common units). Management believes the impact of the revisions to the 2012 financial statements is inconsequential.

In addition, the prior period amounts have been revised to separately reflect fee expense in the consolidated statement of income. This balance has previously been classified in operating expenses.

As of March 31, 2013, the Company’s significant accounting policies, which are detailed in the Company’s audited consolidated financial statements for the year ended December 31, 2012, have not changed materially.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the balance sheets. In particular, the estimates used in the pricing process for real estate securities, is inherently subjective and imprecise. Actual results could differ from those estimates.

Fee Expense

Fee expense is comprised primarily of closing fees paid related to purchases of real estate and management fees earned. In addition, the Company entered into a loan referral agreement with Meridian Capital Group LLC, as disclosed in Note 11. The agreement provides for the payment of referral fees for loans originated pursuant to a formula based on the Company’s net profit, as defined in the agreement, payable annually in arrears. While the arrangement gives rise to a potential conflict of interest, full disclosure is given and the borrower waives the conflict in writing.

Recently Issued and Adopted Accounting Pronouncements

In December 2011, the FASB released ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires companies to provide new disclosures about offsetting and related arrangements for financial instruments

F-52

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

and derivatives. The provisions of ASU 2011-11 are effective for reporting periods beginning on or after January 1, 2013, and are required to be applied retrospectively. The adoption of ASU 2011-11 did not have a material impact on the Company’s consolidated financial condition or results of operations, but did impact financial statement disclosures.

In February 2013, the FASB released ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2013-01 limits the scope of the new balance sheet offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. The adoption of this standard effective January 1, 2013 did not have a material impact on the Company’s consolidated financial condition or results of operations, but did impact financial statement disclosures.

In February 2013, the FASB released ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 enhances the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 sets requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires companies to present reclassifications by component when reporting changes in AOCI balances. The adoption of this standard effective January 1, 2013 did not have a material impact on the Company’s consolidated financial condition or results of operations, but did impact financial statement disclosures.

3.    MORTGAGE LOAN RECEIVABLES

For the three months ended March 31, 2013, the Company originated/purchased $940,317,250 first mortgage and mezzanine loan receivables on commercial real estate properties and received $122,608,276 of principal repayments on outstanding loans. The Company participated in two securitization transactions by selling originated first mortgage loans totaling $881,190,251, sold one loan totaling $50,879,155 to a third party, and sold one loan totaling $17,200,000 to the partnership described in Note 6.

For the three months ended March 31, 2012, the Company originated/purchased $493,802,726 first mortgage and mezzanine loan receivables on commercial real estate properties and received $61,088,014 of principal repayments on outstanding loans. The Company participated in one securitization transaction by selling originated first mortgage loans totaling $433,574,580, and sold one loan totaling $68,700,000 to the partnership described in Note 6.

F-53

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

March 31, 2013

	Outstanding Face Amount		Carrying Value		Weighted Average Yield			Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost	$	298,703,647	$	293,207,458		11.14	%		2.45
Mortgage loan receivables held for sale		611,329,915		610,898,322		4.75	%		9.05
Total	$	910,033,562	$	904,105,780

December 31, 2012

	Outstanding Face Amount		Carrying Value		Weighted Average Yield			Remaining Maturity (years)
Mortgage loan receivables held for investment, at amortized cost	$	331,719,768	$	326,318,550		11.28	%		2.27
Mortgage loan receivables held for sale		623,644,114		623,332,620		4.81	%		8.84
Total	$	955,363,882	$	949,651,170

The following table summarizes the mortgage loan receivables by loan type:

	As of March 31, 2013				As of December 31, 2012
	Outstanding Face Amount		Carrying Value		Outstanding Face Amount		Carrying Value
Mortgage loan receivables held for sale
First mortgage loan	$	611,329,915	$	610,898,322	$	623,644,114	$	623,332,620
Total mortgage loan receivables held for sale		611,329,915		610,898,322		623,644,114		623,332,620
Mortgage loan receivables held for investment, at amortized cost
First mortgage loan		200,727,869		198,850,828		233,610,367		231,826,359
Mezzanine loan		94,305,853		92,736,705		94,346,656		92,629,446
Loan participation		3,669,925		3,669,925		3,762,745		3,762,745
Total mortgage loan receivables held for investment, at amortized cost		298,703,647		295,257,458		331,719,768		328,218,550
Reserve for loan losses		—		2,050,000		—		1,900,000
Total	$	910,033,562	$	904,105,780	$	955,363,882	$	949,651,170

The Company evaluates each of its loans for potential losses at least quarterly. Its loans are typically collateralized by real estate. As a result, the Company regularly evaluates 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. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow from operations is sufficient to cover the debt service requirements

F-54

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

currently and into the future, (ii) the ability of the borrower to refinance the loan at maturity, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers exit plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data. As a result of this analysis, the Company has concluded that none of its loans is individually impaired; however, based on the risk inherent in the portfolio, has recorded a reserve for loan losses totaling $2,050,000 and $1,451,167 at March 31, 2013 and December 31, 2012, respectively.

Reserve for Loan Losses

	For the three months ended March 31,
	2013		2012
Reserve for loan losses at beginning of period	$	1,900,000	$	1,451,167
Reserve for loan losses		150,000		—
Charge-offs		—		—
Reserve for loan losses at end of period	$	2,050,000	$	1,451,167

4.     REAL ESTATE SECURITIES

The following is a summary of the Company’s securities at March 31, 2013 and December 31, 2012, all of which are classified as available-for-sale and are therefore reported at fair value:

March 31, 2013

					Gross Unrealized									Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses			Carrying Value		# of Securities		Rating (A)		Coupon %			Yield %			Remaining Maturity (years)
	($ in thousands)
CMBS	$	688,146	$	690,538	$	21,685	$	(470	)	$	711,753		81		AAA		5.35	%		4.86	%		1.83
CMBS interest-only		424,702		49,932		3,063	$	—			52,995		4		AAA		1.77	%		5.01	%		4.35
GNMA interest-only		2,114,874		125,807		3,302	$	(4,383	)		124,726		33		AAA		1.20	%		8.25	%		2.97
FHLMC interest-only		221,823		9,159		485	$	—			9,644		2		AAA		0.95	%		5.31	%		2.47
GN construction securities		60,680		62,968		6,415	$	—			69,383		12		AAA		4.84	%		3.94	%		6.06
GN permanent securities		86,589		88,618		426	$	(203	)		88,841		14		AAA		5.67	%		4.48	%		2.28
Total	$	3,596,814	$	1,027,022	$	35,376	$	(5,056	)	$	1,057,342

F-55

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

December 31, 2012

					Gross Unrealized									Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses			Carrying Value		# of Securities		Rating (A)		Coupon %			Yield %			Remaining Maturity (years)
	($ in thousands)
CMBS	$	781,271	$	783,454	$	23,763	$	(444	)	$	806,773		93		AAA		5.38	%		4.77	%		1.43
CMBS interest-only		234,463		25,219		1,924		—			27,143		3		AAA		2.11	%		2.70	%		3.28
GNMA interest-only		2,039,528		121,825		2,974		(3,802	)		120,997		31		AAA		1.34	%		8.79	%		2.99
FHLMC interest-only		222,515		9,518		481		—			9,999		2		AAA		0.89	%		5.31	%		2.56
GN construction securities		43,023		44,390		7,459		(6	)		51,843		10		AAA		5.03	%		3.57	%		6.54
GN permanent securities		105,566		109,008		214		(415	)		108,807		18		AAA		5.22	%		3.63	%		2.68
Total	$	3,426,366	$	1,093,414	$	36,815	$	(4,667	)	$	1,125,562

(A) Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple credit rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change (including the assignment of a “negative outlook” or “credit watch”) at any time.

The following is a breakdown of the fair value of the Company’s securities by remaining maturity based upon expected cash flows at March 31, 2013 and December 31, 2012:

March 31, 2013

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
	($ in thousands)
CMBS	$	202,419	$	478,062	$	31,272	$	—	$	711,753
CMBS interest-only		—		27,115		25,880		—		52,995
GNMA interest-only		786		123,940		—		—		124,726
FHLMC interest-only		—		9,644		—		—		9,644
GN construction securities		—		21,508		47,875		—		69,383
GN permanent securities		3,416		84,350		1,075		—		88,841
Total	$	206,621	$	744,619	$	106,102	$	—	$	1,057,342

December 31, 2012

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
	($ in thousands)
CMBS	$	324,559	$	473,049	$	9,165	$	—	$	806,773
CMBS interest-only		—		27,143		—		—		27,143
GNMA interest-only		1,186		119,811		—		—		120,997
FHLMC interest-only		—		9,999		—		—		9,999
GN construction securities		—		5,775		46,068		—		51,843
GN permanent securities		15,489		92,239		1,079		—		108,807
Total	$	341,234	$	728,016	$	56,312	$	—	$	1,125,562

F-56

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

5.    REAL ESTATE, NET

During the three months ended March 31, 2013, the Company purchased one retail property subject to long-term net lease obligations for a total of $4,990,741 and one 13 story office building for $18,000,000. During the three months ended March 31, 2012, the Company purchased 14 retail properties subject to long-term net lease obligations for a total of $90,643,909. During the three months ended March 31, 2013, there were no sales of these properties. During the three months ended March 31, 2012, 12 of these properties were sold for $70,883,494, resulting in a gain on sale of $1,474,585.

On December 20, 2012, the Company acquired, through a consolidated, majority owned joint venture with an operating partner, 427 residential condominium units for $119,000,000, most of which are subject to residential leases. During the three months ended March 31, 2013, 19 of these condominium units were sold for $8,045,319, resulting in a gain on sale of $3,697,548. In addition, during the three months ended March 31, 2013, the Company recorded $1,452,976 of rental income from the condominium units subject to residential leases. The residential leases are typically less than one year terms, non-cancellable but are fully transferable upon sale of the condominium unit subject to lease.

	March 31, 2013			December 31, 2012
Land	$	53,045,329		$	54,234,563
Building(1)		316,264,465			296,432,261
In-place leases and other intangibles(1)		33,415,296			33,415,296
Real estate		402,725,090			384,082,120
Less: Accumulated depreciation and amortization		(7,047,204	)		(4,060,448	)
Real estate, net	$	395,677,886		$	380,021,672

(1) The in-place and above/below market lease assets presented above were previously included within the Building line item in the above tables. As such amounts are separately identifiable intangible assets associated with the acquired real estate assets, management has corrected the above disclosure to separately disclose such amounts. There was no impact to real estate, net as previously disclosed or reported.

At March 31, 2013 gross intangible assets totalled $33,415,296 with total accumulated amortization of $1,411,421, resulting in net intangible assets of $32,003,875. At December 31, 2012 gross intangible assets totalled $33,415,296 with total accumulated amortization of $996,999, resulting in net intangible assets of $32,418,297. For the three months ended March 31, 2013 and March 31, 2012, the Company recorded amortization expense of $414,423 and $73,607, respectively.

The following table presents expected amortization during the next five years and thereafter related to the acquired in-place lease intangibles, for property owned as of March 31, 2013:

Year ended December 31,	Amount
2013 (last 9 months)	$	1,243,265
2014		1,657,686
2015		1,657,686
2016		1,657,686
2017		1,657,686
Thereafter		24,129,866
Total	$	32,003,875

F-57

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following is a schedule of future minimum rent under leases at March 31, 2013:

Period ended December 31,	Amount
2013 (last 9 months)	$	14,236,949
2014		18,982,598
2015		18,982,598
2016		18,991,472
2017		19,083,117
Thereafter		295,198,036
Total	$	385,474,770

6.    INVESTMENT IN EQUITY METHOD INVESTEE

On April 15, 2011, the Company entered into a limited partnership agreement and acquired a 100% general partnership interest and a 10% limited partnership interest in Ladder Capital Realty Income Partnership I LP (the “Partnership”). The Partnership was formed to acquire first loan mortgages collateralized by commercial real estate property for purposes of income and/or capital appreciation. The Company accounts for its interest in the Partnership using the equity method of accounting as it exerts significant influence but the unrelated limited partners have substantive participating rights.

During the three months ended March 31, 2013 and 2012, the Company contributed $782,654 and $3,264,812, respectively, of cash into the Partnership. Simultaneously with the execution of the Partnership agreement, the Company was engaged as the Manager and is entitled to a fee based upon the average net equity invested in the Partnership, which is subject to a fee reduction in the event organization expenses (as defined in the Partnership Agreement) exceed $500,000. During the three months ended March 31, 2013 and 2012, the Company recorded $242,480 and $181,814, respectively, in management fees, which is reflected in fee income in the consolidated statements of income. During the three months ended March 31, 2013, the Company sold one loan to the Partnership for aggregate proceeds of $17,200,000, which exceeded its carrying value by $139,901 and is included in sale of loans, net on the consolidated statements of operations. At March 31, 2013, the Partnership has total assets and liabilities of $248,151,844 and $114,256,270, respectively. During the three months ended March 31, 2012, the Company sold one loan to the Partnership for aggregate proceeds of $68,700,000, which exceeded its carrying value by $619,069 and is included in sale of loans, net on the consolidated statements of operations. At December 31, 2012, the Partnership has total assets and liabilities of $234,316,162 and $107,534,278, respectively. The Company is entitled to income allocations and distributions based upon its proportionate interest of 10%, and is eligible for additional distributions up to 25% if certain return thresholds are met.

7.    FINANCING

Committed Loan and Securities Repurchase Facilities

The Company has entered into multiple committed master repurchase agreements in order to finance its lending activities throughout the fiscal year. The Company has entered into four committed master repurchase agreements, as outlined in the table below, with multiple counterparties totaling $1,100,000,000 of credit capacity. Assets pledged as collateral under

F-58

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

these facilities are limited to CMBS securities and whole mortgage loans collateralized by first liens on commercial properties. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum leverage ratios. The Company believes it is in compliance with all covenants as of March 31, 2013 and December 31, 2012.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, no event of default exists, and no margin deficit exists, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

The Company has also entered into a term master repurchase agreement with a major US banking institution to finance CMBS securities totaling $600,000,000.

Uncommitted Securities Repurchase Facilities

The Company has also entered into multiple master repurchase agreements with several counterparties collateralized by real estate securities. The borrowings under these agreements have typical advance rates between 60% and 95% of the collateral.

March 31, 2013

Committed Amount		Outstanding Amount		Interest Rate(s) at Mar. 31, 2013	Maturity		Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
$	300,000,000	$	12,146,162	Between 2.448% and 2.456%		9/26/2013	N/A	First mortgage commercial real estate loans & investment grade commercial mortgage backed securities	$	52,043,662	$	53,625,630
$	50,000,000	$	3,238,134	2.708%		4/5/2013	N/A	First mortgage commercial real estate loans	$	6,476,269	$	7,004,519
$	450,000,000	$	36,469,575	Between 2.452% and 3.402%		5/24/2015	Two additional twelve month periods at Company’s option	First mortgage commercial real estate loans	$	143,700,890	$	149,986,805
$	300,000,000	$	—	—		1/24/2014	N/A	First mortgage commercial real estate loans	$	—	$	—
$	600,000,000	$	127,312,044	Between 1.406% and 1.410%		1/25/2014	N/A	Investment grade commercial real estate securities	$	144,953,332	$	144,953,332
$	—	$	202,995,000	Between 0.650% and 1.700%		4/12/2013- 4/16/2013	N/A	Investment grade commercial real estate securities	$	238,296,029	$	238,296,029
$	1,700,000,000	$	382,160,915						$	585,470,182	$	593,866,315

F-59

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

December 31, 2012

Committed Amount		Outstanding Amount		Interest Rate(s) at Dec. 31, 2012	Maturity		Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
$	300,000,000	$	40,806,925	Between 2.459% and 2.958%		9/26/2013	N/A	First mortgage commercial real estate loans & investment grade commercial mortgage backed securities	$	54,603,105	$	61,155,699
$	50,000,000	$	28,995,000	2.708%		1/29/2013	N/A	First mortgage commercial real estate loans	$	37,800,000	$	42,518,901
$	450,000,000	$	133,165,026	Between 2.458% and 3.208%		5/24/2015	Two additional twelve month periods at Company’s option	First mortgage commercial real estate loans	$	225,934,255	$	237,654,929
$	300,000,000	$	23,400,000	2.710%		1/24/2014	N/A	First mortgage commercial real estate loans	$	36,000,000	$	41,080,320
$	600,000,000	$	278,020,851	1.408%		1/25/2016	N/A	Investment grade commercial real estate securities	$	324,912,372	$	324,912,372
$	—	$	289,528,900	Between 0.700% and 1.711%		1/7/2013- 1/23/2013	N/A	Investment grade commercial real estate securities	$	349,585,161	$	349,585,161
$	1,700,000,000	$	793,916,702						$	1,028,834,892	$	1,056,907,382

Borrowings under Credit Agreement

On January 24, 2013, the Company entered into a $50,000,000 credit agreement with one of its multiple committed financing counterparties in order to finance its securities and lending activities. As of March 31, 2013 there was $30,000,000 in borrowings outstanding under the Company’s credit agreement. The borrowings under this agreement have a funding rate of 2.95% with typical advance rates under the borrowing base between 30% and 65% of the collateral. These borrowings were collateralized by first mortgage loans with a fair market value of $57,280,511 at March 31, 2013.

Long Term Financing

During 2013, the Company executed two term debt agreements to finance real estate. During 2012, the Company executed ten term debt agreements to finance real estate. These nonrecourse debt agreements are fixed rate financing at rates ranging from 4.25% to 6.75%, maturing in 2020, 2021, 2022 and 2023 and totaled $153,989,013 at March 31, 2013 and $103,755,644 at December 31, 2012.

Borrowings from the FHLB

On July 11, 2012, Tuebor Captive Insurance Company LLC (“Tuebor”) became a member of the Federal Home Loan Bank (“FHLB”) and subsequently drew its first secured funding advances from the FHLB. As of March 31, 2013, Tuebor had $423,000,000 of borrowings outstanding, with terms of

F-60

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

overnight to 7 years, interest rates of 0.20% to 1.47%, and advance rates of 87% to 95% of the collateral. Collateral for the borrowings was comprised of $377,591,027 of CMBS and U.S. Agency Securities and $227,895,000 of first mortgage commercial real estate loans. As of December 31, 2012, Tuebor had $262,000,000 of borrowings outstanding, with terms of 6 months to 5 years, interest rates of 0.39% to 0.93%, and advance rates of 87% to 95% of the collateral. Collateral for the borrowings was comprised of $333,580,527 of CMBS and U.S. Agency Securities. Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval.

Senior Unsecured Notes

On September 14, 2012, the Company issued $325,000,000 in principal amount of 7.375% Senior Notes due on October 1, 2017 (the “Notes”) at par. The Notes will pay interest semi-annually in cash in arrears on April 1 and October 1 of each year, beginning on September 19, 2012. The Notes are unsecured and are subject to covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type.

The Company issued the Notes with Ladder Capital Finance Corporation, as co-issuers on a joint and several basis. Ladder Capital Finance Corporation is a 100% owned finance subsidiary of Ladder Capital Finance Holdings LLLP with no assets or operations. None of Ladder Capital Finance Holdings LLLP’s other subsidiaries currently guarantee the Notes.

The following schedule reflects the Company’s borrowings by maturity:

Period ending December 31,	Borrowings by Maturity
2013 (last 9 months)	$	313,379,297
2014		189,062,044
2015		65,000,000
2016		125,000,001
2017		432,719,573
Thereafter		188,989,013
	$	1,314,149,928

8.    FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon market quotations, broker quotations, counterparty quotations or pricing services quotations, which provide valuation estimates based upon reasonable market order indications and are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The fair value of the mortgage loan receivables held for sale is based upon a securitization model utilizing market data from recent securitization spreads and pricing.

F-61

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, that are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at March 31, 2013 and December 31, 2012 are as follows:

March 31, 2013

								Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Fair Value		Fair Value Method	Yield %			Remaining Maturity (years)
	($ in thousands)
Assets:
CMBS(1)	$	688,146	$	690,538	$	711,753	Broker quotations, pricing services		4.86	%		1.83
CMBS interest-only(1)		424,702		49,932		52,995	Broker quotations, pricing services		5.01	%		4.35
GNMA interest-only(1)		2,114,874		125,807		124,726	Broker quotations, pricing services		8.25	%		2.97
FHLMC interest-only(1)		221,823		9,159		9,644	Broker quotations, pricing services		5.31	%		2.47
GN construction securities(1)		60,680		62,968		69,383	Broker quotations, pricing services		3.94	%		6.06
GN permanent securities(1)		86,589		88,618		88,841	Broker quotations, pricing services		4.48	%		2.28
Mortgage loan receivable held for investment, at amortized cost		298,704		293,207		298,704	Discounted Cash Flow(3)		11.14	%		2.45
Mortgage loan receivable held for sale		611,330		610,898		649,151	Discounted Cash Flow(4)		4.75	%		9.05
FHLB stock(1)(6)		21,150		21,150		21,150	(6)		3.50	%		N/A
Nonhedge derivatives(1)(5)		338,200		N/A		1,269	Counterparty quotations		N/A			8.19
Liabilities:
Repurchase—agreements short term		254,849		254,849		254,849	Discounted Cash Flow(2)		1.22	%		0.47
Repurchase agreements—long term		127,312		127,312		127,312	Discounted Cash Flow(2)		0.92	%		0.81
Long term financing		153,989		153,989		155,610	Discounted Cash Flow(2)		5.15	%		9.24
Borrowings from the FHLB		423,000		423,000		423,605	Discounted Cash Flow(2)		0.57	%		2.70
Senior unsecured notes		325,000		325,000		339,625	Broker quotations, pricing services		7.38	%		4.50
Nonhedge derivatives(1)(5)		650,000		N/A		18,322	Counterparty quotations		N/A			2.21

F-62

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(1) Measured at fair value on a recurring basis.

(2) Fair value for repurchase agreement liabilities is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. For the borrowings from the FHLB, the carrying value approximates the fair value discounting the expected cash flows. For the long term financing, the carrying value approximates the fair value discounting the expected cash flows. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any security positions.

(3) Fair value for mortgage loan receivables, held for investment is estimated to approximate carrying amount for those assets with short interest rate reset risk (30 days) and no significant change in credit risk.

(4) Fair value for mortgage loan receivables, held for sale is measured at fair value using a securitization model utilizing market data from recent securitization spreads and pricing.

(5) The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(6) The fair value of the FHLB stock approximates outstanding face amount as the Company is restricted from trading the stock and it can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

December 31, 2012

								Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Fair Value		Fair Value Method	Yield %			Remaining Maturity (years)
	($ in thousands)
Assets:
CMBS(1)	$	781,271	$	783,454	$	806,773	Broker quotations, pricing services		4.77	%		1.43
CMBS interest-only(1)		234,463		25,219		27,143	Broker quotations, pricing services		2.70	%		3.28
GNMA interest-only(1)		2,039,528		121,825		120,997	Broker quotations, pricing services		8.79	%		2.99
FHLMC interest-only(1)		222,515		9,518		9,999	Broker quotations, pricing services		5.31	%		2.56
GN construction securities(1)		43,023		44,390		51,843	Broker quotations, pricing services		3.57	%		6.54
GN permanent securities(1)		105,566		109,008		108,807	Broker quotations, pricing services		3.63	%		2.68
Mortgage loan receivable held for investment, at amortized cost		331,720		326,319		331,720	Discounted Cash Flow(3)		11.28	%		2.27
Mortgage loan receivable held for sale		623,644		623,333		674,414	Discounted Cash Flow(4)		4.81	%		8.84
FHLB stock(1)(6)		13,100		13,100		13,100	(6)		3.50	%		N/A
Nonhedge derivatives(1)(5)		600,750		N/A		5,695	Counterparty quotations		N/A			4.70
Liabilities:
Repurchase agreements—short term		359,331		359,331		359,331	Discounted Cash Flow(2)		1.47	%		0.13
Repurchase agreements—long term		434,586		434,586		434,586	Discounted Cash Flow (2)		1.87	%		1.47

F-63

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

								Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Fair Value		Fair Value Method	Yield %			Remaining Maturity (years)
Long term financing		103,756		103,756		106,517	Discounted Cash Flow (2)		5.35	%		9.32
Borrowings from the FHLB		262,000		262,000		262,787	Discounted Cash Flow (2)		0.61	%		3.06
Senior unsecured notes		325,000		325,000		333,938	Broker quotations, pricing services		7.38	%		4.75
Nonhedge derivatives(1)(5)		303,600		N/A		18,515	Counterparty quotations		N/A			3.56

(1) Measured at fair value on a recurring basis.

(2) Fair value for repurchase agreement liabilities is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. For the borrowings from the FHLB, the carrying value approximates the fair value discounting the expected cash flows. For the long term financing, the carrying value approximates the fair value discounting the expected cash flows. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any security positions.

(3) Fair value for mortgage loan receivables, held for investment is estimated to approximate carrying amount for those assets with short interest rate reset risk (30 days and no significant change in credit risk).

(4) Fair value for mortgage loan receivables, held for sale is measured at fair value using a securitization model utilizing market data from recent securitization spreads and pricing.

(5) The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(6) The fair value of the FHLB stock approximates outstanding face amount as the Company is restricted from trading the stock and it can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

Valuation Hierarchy

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP (FASB—Accounting Standards Codification Topic 820), the methodologies used for valuing such instruments have been categorized into three broad levels as follows:

Level 1—Quoted prices in active markets for identical instruments.

Level 2—Valuations based principally on other observable market parameters, including

• Quoted prices in active markets for similar instruments,

• Quoted prices in less active or inactive markets for identical or similar instruments,

• Other observable inputs (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates), and

• Market corroborated inputs (derived principally from or corroborated by observable market data).

F-64

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Level 3—Valuations based significantly on unobservable inputs.

• Valuations based on third party indications (broker quotes, counterparty quotes or pricing services) which were, in turn, based significantly on unobservable inputs or were otherwise not supportable as Level 2 valuations.

• Valuations based on internal models with significant unobservable inputs.

Pursuant to the authoritative guidance, these levels form a hierarchy. The Company follows this hierarchy for its financial instruments measured at fair value on a recurring basis. The classifications are based on the lowest level of input that is significant to the fair value measurement.

It is the Company’s policy to determine when transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting period.

F-65

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following table summarizes the Company’s financial assets and liabilities, that are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at March 31, 2013 and December 31, 2012:

March 31, 2013

	Outstanding Face Amount		Fair Value
			Level 1		Level 2		Level 3		Total
	($ in thousands)
Assets:
CMBS*	$	688,146	$	—	$	711,753	$	—	$	711,753
CMBS interest-only*		424,702		—		52,995		—		52,995
GNMA interest-only*		2,114,874		—		124,726		—		124,726
FHLMC interest-only*		221,823		—		9,644		—		9,644
GN construction securities*		60,680		—		69,383		—		69,383
GN permanent securities*		86,589		—		88,841		—		88,841
Mortgage loan receivable held for investment		298,704		—		—		298,704		298,704
Mortgage loan receivable held for sale		611,330		—		—		649,151		649,151
FHLB stock*		21,150		21,150		—		—		21,150
Nonhedge derivatives*		338,200		—		1,269		—		1,269
Liabilities:
Repurchase agreements—short term		254,849		—		254,849		—		254,849
Repurchase agreements—long term		127,312		—		127,312		—		127,312
Long term financing		153,989		—		—		155,610		155,610
Borrowings from the FHLB		423,000		—		—		423,605		423,605
Senior unsecured notes		325,000		—		339,625		—		339,625
Nonhedge derivatives*		650,000		—		18,322		—		18,322

F-66

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

December 31, 2012

	Outstanding Face Amount		Fair Value
			Level 1		Level 2		Level 3		Total
	($ in thousands)
Assets:
CMBS*	$	781,271	$	—	$	806,773	$	—	$	806,773
CMBS interest-only*		234,463		—		27,143		—		27,143
GNMA interest-only*		2,039,528		—		120,997		—		120,997
FHLMC interest-only*		222,515		—		9,999		—		9,999
GN construction securities*		43,023		—		51,843		—		51,843
GN permanent securities*		105,566		—		108,807		—		108,807
Mortgage loan receivable held for investment		331,720		—		—		331,720		331,720
Mortgage loan receivable held for sale		623,644		—		—		674,414		674,414
FHLB stock*		13,100		13,100		—		—		13,100
Nonhedge derivatives*		338,200		—		5,695		—		5,695
Liabilities:
Repurchase agreements—short term		359,331		—		359,331		—		359,331
Repurchase agreements—long term		434,586		—		434,586		—		434,586
Long term financing		103,756		—		—		106,517		106,517
Borrowings from the FHLB		262,000		—		—		262,787		262,787
Senior unsecured notes		325,000		—		333,938		—		333,938
Nonhedge derivatives*		303,600		—		18,515		—		18,515

* Measured at fair value on a recurring basis. The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

9.    DERIVATIVE INSTRUMENTS

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. The following is a breakdown of the derivatives outstanding as of March 31, 2013 and December 31, 2012:

March 31, 2013

			Fair Value
Contract Type	Notional		Positive(1)		Negative(1)		Net
Caps
1MO LIB	$	200,000,000	$	840	$	—	$	840
Futures
5-years US T-Note		87,100,000		—		350,722		(350,722	)
10-year US T-Note		365,500,000		—		3,007,688		(3,007,688	)
Total futures		452,600,000		—		3,358,410		(3,358,410	)
Swaps
3MO LIB		163,900,000		—		14,799,068		(14,799,068	)

F-67

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

			Fair Value
Contract Type	Notional		Positive(1)		Negative(1)		Net
Credit Derivatives
CMBX	$	67,000,000	$	1,133,532	$	—	$	1,133,532
CDX		33,500,000		—		164,269		(164,269	)
Call Option CBOE SPX Vol Index		71,200,000		134,200		—		134,200
Total credit derivatives		171,700,000		1,267,732		164,269		1,103,463
Total derivatives	$	988,200,000	$	1,268,572	$	18,321,747	$	(17,053,175	)

December 31, 2012

			Fair Value
Contract Type	Notional		Positive(1)		Negative(1)		Net
Caps
1MO LIB	$	128,750,000	$	21	$	—	$	21
Futures
5-years US T-Note		111,100,000		254,906		1,563		253,344
10-year US T-Note		319,500,000		3,650,938		243,609		3,407,328
Total futures		430,600,000		3,905,844		245,172		3,660,672
Swaps
3MO LIB		174,500,000		—		17,788,614		(17,788,614	)
Credit Derivatives
CMBX		67,000,000		1,779,458		—		1,779,458
TRX		68,500,000		—		481,377		(481,377	)
S&P 500 Put Options		4,000,000		3,770		—		3,770
Call Option CBOE SPX Vol Index		31,000,000		5,426		—		5,426
Total credit derivatives		170,500,000		1,788,654		481,377		1,307,277
Total derivatives	$	904,350,000	$	5,694,519	$	18,515,163	$	(12,820,644	)

(1) Included in derivative instruments, at fair value, in the accompanying consolidated balance sheet

F-68

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following table indicates the net realized gains/(losses) and unrealized appreciation/(depreciation) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of operations for the three months ended March 31, 2013 and 2012.

	For the three months ended March 31,
Contract Type	2013			2012
Caps	$	819		$	(1,802	)
Futures		1,755,235			(2,139,451	)
Swaps		2,076,375			(70,892	)
Credit Derivatives		(1,562,720	)		(194,658	)
Total	$	2,269,709		$	(2,406,803	)

The Company’s counterparties held $35,062,713 and $32,207,997 of cash margin as collateral for derivatives as of March 31, 2013 and December 31, 2012, respectively, which is included in cash collateral held by brokers in the consolidated balance sheets.

Credit Risk-Related Contingent Features

The Company has agreements with certain of its derivative counterparties that contain a provision whereby if the Company defaults on certain of its indebtedness, the Company could also be declared in default on its derivatives, resulting in an acceleration of payment under the derivatives.

As of March 31, 2013

Offsetting of Financial Assets and Derivative Assets

							Gross amounts not offset in the balance sheet
Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received		Net amount
Derivatives	$	1,268,572	$	—	$	1,268,572	$	—	$	5,233,504	$	(3,964,932	)
Total	$	1,268,572	$	—	$	1,268,572	$	—	$	5,233,504	$	(3,964,932	)

As of March 31, 2013

Offsetting of Financial Liabilities and Derivative Liabilities

								Gross amounts not offset in the balance sheet
Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet			Financial instruments			Cash collateral received		Net amount
Derivatives	$	18,321,747	$	—	$	18,321,747		$	(41,166	)	$	29,829,209	$	(11,507,462	)
Repurchase agreements		382,160,915		745,302,433		(363,141,518	)		—			—		(363,141,518	)
Total	$	400,482,662	$	745,302,433	$	(344,819,771	)	$	(41,166	)	$	29,829,209	$	(374,648,980	)

F-69

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

As of December 31, 2012

Offsetting of Financial Assets and Derivative Assets

							Gross amounts not offset in the balance sheet
Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received		Net amount
Derivatives	$	5,694,519	$	—	$	5,694,519	$	—	$	4,841,197	$	853,322
Total	$	5,694,519	$	—	$	5,694,519	$	—	$	4,841,197	$	853,322

As of December 31, 2012

Offsetting of Financial Liabilities and Derivative Liabilities

								Gross amounts not offset in the balance sheet
Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet			Financial instruments		Cash collateral received		Net amount
Derivatives	$	18,515,163	$	—	$	18,515,163		$	—	$	27,366,800	$	(8,851,637	)
Repurchase agreements		793,916,703		1,028,834,892		(234,918,189	)		—		—		(234,918,189	)
Total	$	812,431,866	$	1,028,834,892	$	(216,403,026	)	$	—	$	27,366,800	$	(243,769,826	)

Master netting agreements that the Company has entered into with its derivative and repurchase agreement counterparties allow for netting of the same transaction, in the same currency, on the same date. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements.

10.    PARTNERS’ CAPITAL

Pursuant to the LLLP Agreement, the Company’s general partner has delegated all management powers to the Company’s Board of Directors, who, pursuant to the same LLLP Agreement, are appointed by certain significant investors and the CEO of the Company. All other rights as to distributions and income allocations for each class of partners are described below.

Cash Distributions to Partners

Distributions (other than tax distributions which are described below) will be made in the priorities described below at such times and in such amounts as the Company’s Board of Directors determines as described below. All capitalized items used in this section but not defined shall have the respective meanings given to such capitalized terms in the LLLP Agreement.

F-70

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

First, to the holders of Series A and B Preferred pro rata based on the then Series A and B Participating Preferred Unreturned Capital Value (as defined in the LLLP Agreement) of each such holder’s Interests; and

Second, to the holders of Series A and B Participating Preferred Units and Class A Common Units as follows: (A) to the holders of the Series A and B Participating Preferred Units (pro rata based on the number of then issued and outstanding Series A and B Participating Preferred Units), an amount equal to the product of (x) the Series A and B Participating Preferred Percentage as of the date of such distribution multiplied by (y) the amount to be distributed; and (B) to the holders of the Class A Common Units, (pro rata based on the then Aggregate Class A Common Units Outstanding), including any deemed owners of Class A-2 Common Units, an amount equal to the product of (xx) the Class A Common Percentage as of the date of such distribution multiplied by (yy) the amount to be distributed, taking into account the relevant Threshold Amounts, as appropriate.

Notwithstanding the foregoing, subject to available liquidity as determined by Company’s Board of Directors, the Company intends to make quarterly tax distributions equal to a partner’s “Quarterly Estimated Tax Amount”, which shall be computed (as more fully described in the Company’s LLC agreement) for each partner as the product of (x) the federal taxable income (or alternative minimum taxable income, as the case may be, allocated by the Company to such partner in respect of the partnership interests of the Company held by such partner and (y) the highest marginal blended federal, state and local income tax rate applicable to an individual residing in New York, NY, taking into account for federal income tax purposes, the deductibility of state and local taxes.

Allocation of Income and Loss

Income and losses are allocated among the partners in a manner to reflect as closely as possible the amount each partner would be distributed under the LLLP Agreement upon liquidation of the Company’s assets.

Changes in Accumulated Other Comprehensive Income

For the three months ended March 31, 2013	Unrealized gain (loss) on real estate securities, available for  sale
Begining balance	$	32,148,640
Other comprehensive income before reclassifications		737,856
Amounts reclassified from acumulated other comprehensive income(1)		(2,564,893	)
Net current-period other comprehensive income		(1,827,037	)
Ending balance	$	30,321,603

(1) Amount of reclassification solely relates to realized gain/loss on sale of securities.

F-71

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

11.    RELATED PARTY TRANSACTIONS

The Company entered into a loan referral agreement with Meridian Capital Group LLC (“Meridian”), which is an affiliate of a member of the Company’s board of directors and an investor in the Company. The agreement provides for the payment of referral fees for loans originated pursuant to a formula based on the Company’s net profit, as defined in the agreement, payable annually in arrears. While the arrangement gives rise to a potential conflict of interest, full disclosure is given and the borrower waives the conflict in writing. This agreement is cancelable by the Company based on the occurrence of certain events, or by Meridian for nonpayment of amounts due under the agreement. The Company incurred fees of $150,000 during the three months ended March 31, 2013 for loans originated in accordance with this agreement, of which $150,000 is accrued for and payable as of March 31, 2013. The Company incurred fees of $120,000 during the three months ended March 31, 2012 for loans originated in accordance with this agreement, of which $120,000 is accrued for and payable as of March 31, 2012. These fees are reflected in fee expense in the accompanying consolidated statement of income.

12.    STOCK BASED COMPENSATION PLANS

The 2008 Incentive Equity Plan of the Company, as amended in 2012, was adopted by the Board on September 22, 2008 (the “2008 Plan”), and provides certain executives, other key employees and directors of the Company or any other Ladder Company (as defined in the 2008 Plan) with additional incentives.

On April 20, 2010, 910,491 Class A-2 Common Units were granted to certain executives of the Company. The grants issued are subject to a forty-two (42) month vesting period, commencing on April 20, 2010. On June 4, 2012, 1,127,543 Class A-2 Common Units and 31,451.61 Series B Participating Preferred Units were granted to a new member of the management team. The grants issued are subject to a thirty-six (36) month vesting period, commencing on January 1, 2012. In addition, the new member purchased 24,193.55 Series B Participating Preferred Units as well as received an option to purchase an additional 24,193.55 Series B Participating Preferred Units within one year of grant date at a price of $124 per unit. The fair value of the units at grant date was $130 per unit, and the difference is recognized to deferred compensation expense over the vesting period.

The Company has estimated the fair value of such units granted utilizing a discounted cash flow model as of the last capital call date. Key input assumptions have been estimated based on certain assumptions with respect to management’s prior experience, current market conditions and projected conditions of the commercial real estate industry. All units issued under the 2008 Plan are amortized over the units’ vesting periods and charged against income. The Company recognized equity-based compensation expense of $474,501 and $37,674 for the three months ended March 31, 2013 and 2012, respectively.

F-72

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

A summary of the grants is presented below:

	For the three months ended March 31,
	2013					2012
	Number of Units		Weighted Average Fair Value			Number of Units		Weighted Average Fair Value
Grants—Class A-2 Common Units		—	$	—			—	$	—
Grants—Series A Participating Preferred Units		—		—			—		—
Grants—Series B Participating Preferred Units		—		—			—		—
Amortization to compensation expense
Class A-2 Common Units				(113,342	)				(37,674	)
Series A Participating Preferred Units				—					—
Series B Participating Preferred Units				(361,159	)				—
Total amortization to compensation expense			$	(474,501	)			$	(37,674	)

Deferred Compensation Plan

In February 2012, the employees contributed $2,156,283 to the Phantom Equity Investment Plan. There have been no contributions to the Phantom Equity Investment Plan for the three months ended March 31, 2013. Under the plan, there are both elective and mandatory contributions to the plan based upon a minimum level of total compensation. Mandatory contributions are subject to one-third vesting over a three year period following the applicable plan year in which the related compensation was earned. Elective contributions are immediately vested upon contribution. Compensation expense is liability based and 100% expensed. The employees receive phantom units of Series B Participating Preferred Units at the fair market value of the units.

13.    COMMITMENTS

Leases

The Company entered into an operating lease for its office space. The lease commenced on January 5, 2009 and expires on May 30, 2015. There is an option to renew the lease for an additional five years at an increased monthly rental. The office space has subsequently been subleased to a third party. In 2011, the Company entered into 2 new leases for both its primary office space as well as for a secondary space. The lease on the primary office space commenced on October 1, 2011 and expires on January 31, 2022. The lease for the second location commenced on September 15, 2011 and expires on November 30, 2014. In 2012, the Company entered into one new lease for secondary office space. The lease commenced on May 15, 2012 and expires on May 14, 2015. On January 17, 2013, the Company, through its subsidiary, LVT Owner LLC, executed a lease for a sales office in Miami, FL in connection with the Veer Towers transaction. The Company then licensed the office space to Pordes Residential Sales and Marketing as its sales agent. During March 2013, the Company closed one of its secondary offices.

F-73

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following is a schedule of future minimum rental payments required under the above operating leases:

Year ended December 31,	Amount
2013 (last 9 months)	$	1,361,492
2014		1,814,045
2015		1,381,992
2016		1,125,069
2017		1,180,400
Thereafter		4,819,967
Total	$	11,682,965

GN Construction Loan Securities

The Company committed to purchase GNMA construction loan securities over a period of twelve to fifteen months. As of March 31, 2013, the Company’s commitment to purchase these securities at fixed prices ranging from 101.13 to 107.25 was $180,152,984, of which $59,811,012 was funded, with $120,341,452 remaining to be funded. As of December 31, 2012, the Company’s commitment to purchase these securities at fixed prices ranging from 101.13 to 107.25 was $178,738,909, of which $42,030,253 was funded, with $136,708,656 remaining to be funded. The fair value of those commitments at March 31, 2013 and December 31, 2012 was $2,496,541 and $3,448,503, respectively, which was determined by pricing services as adjusted for estimated liquidity discounts and is included in GN construction securities on the consolidated balance sheets.

14.    RISKS AND UNCERTAINTIES

The following summary of certain risk factors is not intended to be a comprehensive summary of all of the risks of the Company’s investments or all of risks inherent in investing in the Company.

Interest Rate Risk

The nature of the Company’s business exposes it to market risk arising from changes in interest rates. Changes, both increases and decreases, in the rates the Company is able to charge its borrowers, the yields the Company is able to achieve in its securities investments, and the Company’s cost of borrowing directly impacts its net income. The Company’s interest income stream from loans and securities is generally fixed over the life of its assets, whereas it uses floating-rate debt to finance a significant portion of its investments. Another component of interest rate risk is the effect changes in interest rates will have on the market value of the assets the Company acquires. The Company faces the risk that the market value of its assets will increase or decrease at different rates than that of its liabilities, including its hedging instruments. The Company mitigates interest rate risk through utilization of hedging instruments, primarily interest rate swap and futures agreements. Interest rate swap and futures agreements are utilized to hedge against future interest rate increases on the Company’s borrowings and potential adverse changes in the value of certain assets that result from interest rate changes. The Company generally seeks to hedge assets that have a duration longer than

F-74

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

two years, including newly originated conduit first mortgage loans, securities in the Company’s CMBS portfolio if long enough in duration, and most of its U.S. Agency Securities portfolio.

Market Value Risk

The Company’s securities investments are reflected at their estimated fair value. The change in estimated fair value of securities available-for-sale is reflected in accumulated other comprehensive income. The estimated fair value of these securities fluctuates primarily due to changes in interest rates and other factors. Generally, in a rising interest rate environment, the estimated fair value of these securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of these securities would be expected to increase. As market volatility increases or liquidity decreases, the market value of the Company’s assets may be adversely impacted. The Company’s fixed rate mortgage loan portfolio is subject to the same risks. However, to the extent those loans are classified as held for sale, they are reflected at the lower of cost or market. Otherwise, held for investment mortgage loans are reflected at values equal to the unpaid principal balances net of certain fees, costs and loan loss allowances.

Liquidity Risk

Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which the Company invests, and may at the same time lead to a significant contraction in short term and long term debt and equity funding sources. A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell the Company’s investments or determine their fair values. As a result, the Company may be unable to sell its investments, or only able to sell its investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that the Company’s borrowing arrangements or other arrangements for obtaining leverage will continue to be available, or if available, will be available on terms and conditions acceptable to the Company. In addition, a decline in market value of the Company’s assets may have particular adverse consequences in instances where it borrowed money based on the fair value of its assets. A decrease in the market value of the Company’s assets may result in the lender requiring it to post additional collateral or otherwise sell assets at a time when it may not be in the Company’s best interest to do so. Finally, the Company’s captive insurance company subsidiary is subject to state regulations which require that dividends may only be made with regulatory approval.

Credit Risk

The Company is subject to varying degrees of credit risk in connection with its investments. The Company seeks to manage credit risk by performing deep credit fundamental analysis of potential assets and through ongoing asset management. The Company’s investment guidelines do not limit the amount of its equity that may be invested in any type of its assets, however, investments greater than a certain size are subject to review of the Risk and Underwriting Committee of the Board of Directors.

F-75

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Credit Spread Risk

Credit spread risk is the risk that interest rate spreads between two different financial instruments will change. In general, fixed-rate commercial mortgages and CMBS are priced based on a spread to Treasury swaps. The Company generally benefits if credit spreads narrow during the time that it holds a portfolio of mortgage loans or CMBS investments, and the Company may experience losses if credit spreads widen during the time that it holds a portfolio of mortgage loans or CMBS investments. The Company actively monitors its exposure to changes in credit spreads and the Company may enter into credit total return swaps or take positions in other credit related derivative instruments to moderate its exposure against losses associated with a widening of credit spreads.

Risks Related to Real Estate

Real estate and real estate-related 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 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, which could also cause the Company to suffer losses.

Covenant Risk

In the normal course of business, the Company enters into loan agreements with certain lenders to finance its real estate investment transactions. These loan agreements contain, among other conditions, events of default and various covenants and representations. If such events are not cured by the Company or waived by the lenders, the lenders may decide to curtail or limit extension of credit, and the Company may be forced to repay its loans. For the years ended December 31, 2012, 2011 and 2010, the Company believes it was in compliance with all covenants.

Diversification Risk

The assets of the Company are concentrated in the real estate sector. Accordingly, the investment portfolio of the Company may be subject to more rapid change in value than would be the case if the Company were to maintain a wide diversification among investments or industry sectors. Furthermore, even within the real estate sector, the investment portfolio may be relatively concentrated in terms of geography and type of real estate investment. This lack of diversification may subject the investments of the Company to more rapid change in value than would be the case if the assets of the Company were more widely diversified.

Concentrations of Market Risk

Concentrations of market risk may exist with respect to the Company’s investments. Market risk is a potential loss the Company may incur as a result of changes in the fair values of its investments. The Company may also be subject to risk associated with concentrations of investments in geographic regions and industries.

F-76

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Regulatory Risk

The Company established a broker-dealer subsidiary, Ladder Capital Securities LLC (“LCS”), which was initially licensed and capitalized to do business in July 2010. LCS is required to be compliant with the Financial Industry Regulatory Authority (“FINRA”) and Securities and Exchange Commission (“SEC”) requirements on an ongoing basis and is subject to multiple operating and reporting requirements that all broker-dealer entities are subject to. This governance is an increased level of compliance to operate within the broker-dealer requirements. The Company established a registered investment advisor subsidiary, Ladder Capital Adviser LLC (“LCA”). LCA is required to be compliant with SEC requirements on an ongoing basis and is subject to multiple operating and reporting requirements that all registered investment advisers are subject to. In addition, Tuebor is subject to state regulation as a captive insurance company. If LCS, LCA or Tuebor fail to comply with regulatory requirements, they could be subject to loss of their licenses and registration and/or economic penalties.

15.    SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how management reviews and manages its business. These reportable segments include Loans, Securities, and Real Estate. The Loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The Securities segment includes all of the Company’s activities related to real estate securities, which include CMBS and U.S. Agency securities. The Real Estate segment includes net lease real estate and selected other real estate investments. Corporate/Other includes our investments in joint ventures, other asset management activities and operating expenses.

F-77

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The Company evaluates performance based on the following financial measures for each segment:

	Loans			Securities			Real Estate			Corporate/ Other(1)			Company Total
	($ in thousands)
Three months ended March 31, 2013
Interest income	$	18,712		$	14,555		$	—		$	(2,005	)	$	31,261
Interest expense		(1,991	)		(1,329	)		(1,080	)		(6,922	)		(11,322	)
Net interest income (expense)		16,720			13,225			(1,080	)		(8,927	)		19,939
Operating lease income		—			—			6,484			—			6,484
Sales of investments, net		85,018			2,565			3,698			140			91,420
Fee income		993			—			167			278			1,439
Total other income		86,011			2,565			10,349			418			99,342
Net result from derivative transactions		(117	)		2,387			—			—			2,270
Operating expenses		50			—			(2,880	)		(10,734	)		(13,565	)
Fee expense		(12,146	)		(17	)		(451	)		(90	)		(12,704	)
Depreciation		—			—			(2,987	)		(137	)		(3,124	)
Provision for loan losses		(150	)		—			—			—			(150	)
Total costs and expenses		(12,364	)		2,370			(6,318	)		(10,961	)		(27,273	)
Earnings from investment in equity method investee		—			—			—			394			394
Tax expense		—			—			(232	)		(1,836	)		(2,068	)
Segment profit (loss)	$	90,367		$	18,160		$	2,719		$	(20,911	)	$	90,335
Total assets	$	904,106		$	1,057,343		$	395,678		$	184,367		$	2,541,494
Three months ended March 31, 2012
Interest income	$	10,659		$	23,306		$	—		$	92		$	34,057
Interest expense		(1,920	)		(5,184	)		(374	)		(126	)		(7,604	)
Net interest income (expense)		8,739			18,122			(374	)		(34	)		26,453
Operating lease income		—			—			864			—			864
Sales of investments, net		40,630			1,312			1,475			619			44,035
Fee income		318			—			—			182			500
Total other income		40,948			1,312			2,339			801			45,399
Net result from derivative transactions		(768	)		(1,639	)		—			—			(2,407	)
Operating expenses		52			—			—			(8,218	)		(8,166	)
Fee expense		(6,244	)		(12	)		(4	)		(60	)		(6,320	)
Depreciation		—			—			(214	)		(137	)		(351	)
Provision for loan losses		—			—			—			—			—
Total costs and expenses		(6,960	)		(1,652	)		(218	)		(8,415	)		(17,244	)
Earnings from investment in equity method investee		—			—			—			287			287
Tax expense		—			—			—			(305	)		(305	)
Segment profit (loss)	$	42,727		$	17,782		$	1,747		$	(7,665	)	$	54,591
Total assets	$	949,651		$	1,125,562		$	380,022		$	173,795		$	2,629,030

(1) Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company’s joint venture investment and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $21.2 million as of March 31, 2013.

F-78

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

16.    EARNINGS PER UNIT

The Company accounts for earnings per unit in accordance with ASC 260 and related guidance, which requires two calculations of earnings per unit (EPU) to be disclosed: basic EPU and diluted EPU. Under ASC Subtopic 260-10-45, as of January 1, 2009 unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our Participating Preferred Units and phantom units, are considered participating securities for purposes of calculating EPU for our common units. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPU allocated to common units, as shown in the table below.

The numerator for basic and diluted earnings per unit is net earnings attributable to common unitholders reduced by dividends paid and earnings attributable to participating securities. The denominator for basic earnings per unit is the weighted average number of common units outstanding during the period. The denominator for diluted earnings per unit is weighted average units outstanding adjusted for the effect of dilutive unvested grant awards for common units as described in Note 12 Stock Based Compensation Plans.

The following is a reconciliation of the weighted average basic number of common units outstanding to the diluted number of common and common unit equivalent units outstanding and the calculation of earnings per unit using the two-class method:

	Three Months Ended March 31,
	2013			2012
	(In thousands except unit amounts)
Net income attributable to Preferred and Common Unit Holders	$	90,308		$	54,587
Dividends Paid(1):
Common units		(6,359	)		(4,506	)
Preferred units		(25,437	)		(18,023	)
Total dividends paid to common and preferred unit holders		(31,796	)		(22,529	)
Undistributed earnings:
Common units		11,702			6,412
Preferred units		46,809			25,646
Total undistributed earnings attributable to common and preferred unit holders	$	58,511		$	32,058
Weighted average common units outstanding:
Weighted average common units outstanding (basic)		21,712,382			20,293,079
Weighted average common units outstanding (diluted)		22,550,855			21,423,312
Basic Earnings per common unit:
Distributed	$	0.29		$	0.22
Undistributed		0.54			0.32
	$	0.83		$	0.54
Diluted earnings per common unit:
Distributed	$	0.28		$	0.21
Undistributed		0.52			0.30
	$	0.80		$	0.51

(1) The Company pays quarterly dividends in arrears, so a portion of the dividends paid in each calendar year relate to the prior year’s earnings.

F-79

LADDER CAPITAL FINANCE HOLDINGS LLLP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(unaudited)

17.    SUBSEQUENT EVENTS

The Company has evaluated subsequent events through May 10, 2013, the issuance date of the financial statements, and determined disclosure of the following is necessary:

Master Repurchase Agreement

On April 10, 2013, the Company has amended its existing master repurchase agreement and facility with one of its lenders in order to finance its lending activities. The existing agreement was modified to provide, among other things, an increase in financing availability from $50 million to $250 million, an initial term of one year with up to two 1 year extensions and the ability to finance a broader range of loan assets that may include transitional loans and condominium loans.

Lease Termination

In April 2013, the Company entered into a lease termination agreement for one of its secondary offices, to forfeit its security deposit and pay rent through July 2013, in exchange for a full early termination and release from the lease.

F-80

Schedule III—Real Estate and Accumulated Depreciation

LADDER CAPITAL FINANCE HOLDINGS LLLP

SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2012

Description	Initial Cost to Company				Costs Capitalized Subsequent to Acquisition		Gross Amount at  which Carried at Close of Period						Accumulated Depreciation		Date Acquired	Year Built	Life on which Depreciation in Latest Statement of Income is Computed
	Land		Buildings				Land		Buildings		Total
	($ in thousands)
Real Estate Under Operating Leases:
Retail Property in Satsuma, FL	$	79	$	1,013	$	—	$	79	$	1,013	$	1,092	$	32	Apr. 2012	2011	15-35 yrs.
Retail Property in Middleburg, FL		184		994		—		184		994		1,178		32	Apr. 2012	2011	15-35 yrs.
Retail Property in DeLeon, FL		239		1,003		—		239		1,003		1,242		16	Aug. 2012	2011	15-36 yrs.
Retail Property in OrangeCity, FL		229		1,088		—		229		1,088		1,317		29	May. 2012	2011	15-35 yrs.
Retail Property in Yulee, FL		329		1,010		—		329		1,010		1,339		21	Jul. 2012	2012	15-35 yrs.
Retail Property in Spartanburg, SC		828		3,042		—		828		3,042		3,870		194	Jan. 2011	2007	12-42 yrs.
Retail Property in Mount Airy, NC		725		3,767		—		725		3,767		4,492		—	Dec. 2012	2007	31 yrs.
Retail Property in Abingdon, VA		700		3,988		—		700		3,988		4,688		—	Dec. 2012	2006	31 yrs.
Retail Property in Lexington, SC		1,644		3,088		—		1,644		3,088		4,732		256	Jun. 2010	2009	13-48 yrs.
Retail Property in Elkton, MD		963		3,909		—		963		3,909		4,872		293	Jul. 2010	2008	14-49 yrs.
Retail Property in Gallatin, TN		1,750		3,312		—		1,750		3,312		5,062		9	Dec. 2012	2007	31 yrs.
Retail Property in Tupelo, MS		1,120		4,008		—		1,120		4,008		5,128		305	Aug. 2010	2007	12-47 yrs.
Retail Property in Greenwood, AR		1,278		3,869		—		1,278		3,869		5,147		81	Apr. 2012	2009	13-43 yrs.
Retail Property in Johnson City, TN		800		4,462		—		800		4,462		5,262		—	Dec. 2012	2007	31 yrs.
Retail Property in Douglasville, GA		1,717		3,692		—		1,717		3,692		5,409		278	Aug. 2010	2008	13-48 yrs.
Retail Property in Chattanooga, TN		903		4,800		—		903		4,800		5,703		—	Dec. 2012	2008	11-41 yrs.
Retail Property in Lilburn, GA		1,090		4,701		—		1,090		4,701		5,791		353	Aug. 2010	2007	12-47 yrs.
Retail Property in Aiken, SC		1,600		4,326		—		1,600		4,326		5,926		—	Dec. 2012	2008	31 yrs.
Retail Property in Palmview, TX		950		5,870		—		950		5,870		6,820		—	Dec. 2012	2012	31 yrs.
Retail Property in Millbrook, AL		975		5,966		—		975		5,966		6,941		142	Mar. 2012	2008	31 yrs.
Retail Property in Wichita, KS		1,200		6,000		—		1,200		6,000		7,200		—	Dec. 2012	2012	25 yrs.
Retail Property in Tilton, NH		1,476		5,780		—		1,476		5,780		7,256		79	Sep. 2012	1996	10-20 yrs.
Retail Property in Sennett, NY		1,147		6,328		—		1,147		6,328		7,475		79	Sep. 2012	1996	10-23 yrs.
Retail Property in Columbia, SC		2,148		5,652		—		2,148		5,652		7,800		165	Apr. 2012	2011	14-34 yrs.
Retail Property in Snellville, GA		1,293		6,707		—		1,293		6,707		8,000		195	Apr. 2012	2011	14-34 yrs.
Retail Property in Jonesboro, AR		2,615		5,785		—		2,615		5,785		8,400		40	Oct. 2012	2012	15-35 yrs.
Retail Property in Mt. Juliet, TN		2,739		6,361		—		2,739		6,361		9,100		17	Nov. 2012	2012	15-35 yrs.
Retail Property in Pittsfield, MA		1,801		12,899		—		1,801		12,899		14,700		364	Feb. 2012	2011	14-34 yrs.
Retail Property in Mooresville, NC		2,615		15,028		—		2,615		15,028		17,643		180	Sep. 2012	2000	12-24 yrs.
Retail Property in Waldorf, MD		4,933		13,870		—		4,933		13,870		18,803		170	Sep. 2012	1999	10-25 yrs.
Retail Property in Saratoga Springs, NY		749		19,474		—		749		19,474		20,223		202	Sep. 2012	1994	15-27 yrs.
Retail Property in Vineland, NJ		1,482		21,024		—		1,482		21,024		22,506		222	Sep. 2012	2003	12-30 yrs.
Retail Property in North Dartsmouth, MA		7,033		22,932		—		7,033		22,932		29,965		305	Sep. 2012	1989	10-20 yrs.
Retail Property in Las Vegas, NV		4,900		114,100		—		4,900		114,100		119,000		—	Dec. 2012	2010	53 yrs.
	$	54,234	$	329,848	$	—	$	54,234	$	329,848	$	384,082	$	4,060

S-1

Reconciliation of Real Estate:

The following table reconciles Real Estate from January 1, 2010 to December 31, 2012:

	2012			2011		2010
Balance at January 1	$	29,802		$	25,932	$	—
Improvements and additions		428,651			3,870		63,583
Acquisitions through foreclosure		—			—		—
Dispositions		(74,371	)		—		(37,651	)
Impairments		—			—		—
Balance at December 31	$	384,082		$	29,802	$	25,932

Reconciliation of Accumulated Depreciation:

The following table reconciles Accumulated Depreciation from January 1, 2010 to December 31, 2012:

	2012		2011		2010
Balance at January 1	$	967	$	263	$	—
Additions		3,093		704		263
Dispositions		—		—		—
Balance at December 31	$	4,060	$	967	$	263

S-2

LADDER CAPITAL FINANCE HOLDINGS LLLP

SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE

AS OF DECEMBER 31, 2012

Type of Loan	Underlying Property Type	Contractual Interest Rates	Final Maturity Dates	Periodic Payment Terms(1)	Location	Face amount of Mortgages		Carrying Amount of Mortgages
First Mortgage	Retail	4.90%	Dec 2022	IO	Pensacola Beach, FL	$	69,000,000	$	68,935,000
First Mortgage	Office	LIBOR + 8.0%, 8.25% Floor	May 2014	P&I	Van Buren Township, MI		65,381,809		64,944,025
First Mortgage	Office	4.43%	Oct 2018	IO	Long Island City, NY		62,000,000		62,000,000
First Mortgage	Hotel	4.81%	Dec 2017	IO	Chicago, IL		48,000,000		48,000,000
First Mortgage	Residential	4.65%	Dec 2022	IO	Washington, MI		45,900,000		45,900,000
First Mortgage	Multi-family	5.46%	Jul 2021	IO	Carteret, NJ		36,000,000		36,000,000
First Mortgage	Retail	LIBOR + 9.0%, 10.5% Floor	May 2014	P&I	Austin, TX		32,910,092		32,528,156
First Mortgage	Retail	LIBOR + 11.1%, 12.4% Floor	Jan 2014	IO	New York, NY		31,500,000		31,185,000
First Mortgage	Mixed Use	5.92%	Jan 2025	IO	North Hollywood, CA		30,300,000		30,300,000
First Mortgages individually <3%	Retail, Office, Mixed Use, Hotel, Multi-family	Fixed: 3.67% - 15% Variable: LIBOR + 6.75% to LIBOR + 11.00%	2013 - 2033				440,025,325		439,129,542
First Mortgages						$	861,017,227	$	858,921,724
Subordinate Mortgage	Land	14.65%	Jan 2014	IO			35,000,000		34,176,000
Subordinate Mortgages individually <3%	Retail, Office, Hotel, Multi-family	Fixed: 6.04% - 12%	2016-2022				59,346,656		58,453,446
Subordinated Mortgages						$	94,346,656	$	92,629,446
Total Mortgages						$	955,363,882	$	951,551,170

(1) IO = Interest Only

P&I = Principal and interest

S-3

Reconciliation of Mortgage Loans on Real Estate:

The following table reconciles Mortgage Loans on Real Estate from January 1, 2010 to December 31, 2012:

	2012			2011			2010
Balance at January 1	$	514,038,109		$	509,803,975		$	123,136,364
Additions		2,463,328,246			1,444,354,090			784,107,320
Repayments		(280,567,836	)		(64,249,342	)		(69,904,380	)
Sales		(1,904,189,552	)		(1,444,330,798	)		(358,544,564	)
Realized gain on sales		154,613,009			66,270,758			30,532,843
Accretion/amortization of discount, premium and other fees		2,878,027			2,189,426			1,361,387
Provisions for loan loss		(448,833	)		—			(884,995	)
Balance at December 31	$	949,651,170		$	514,038,109		$	509,803,975

S-4

             Shares

Ladder Capital Corp

Class A Common Stock

Joint Book-Running Managers

Deutsche Bank Securities

Citigroup

Wells Fargo Securities

BofA Merrill Lynch

J.P. Morgan

Through and including                     , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the various expenses expected to be incurred by the Registrant in connection with the sale and distribution of the securities being registered hereby, other than underwriting discounts and commissions. All amounts are estimated except the SEC registration fee and the Financial Industry Regulatory Authority filing fee.

SEC registration fee	$	*
Financial Industry Regulatory Authority filing fee		*
Blue Sky fees and expenses		*
Accounting fees and expenses		*
Legal fees and expenses		*
Printing and engraving expenses		*
Registrar and Transfer Agent’s fees		*
Miscellaneous fees and expenses		*
Total	$	*

* To be filed by amendment

Item 14. Indemnification of Directors and Officers

Section 102 of the DGCL allows a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of the DGCL or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that we may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding—other than an action by or in the right of the Registrant—by reason of the fact that the person is or was a director, officer, agent or employee of the Registrant, or is or was serving at our request as a director, officer, agent or employee of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding. The power to indemnify applies (a) if such person is successful on the merits or otherwise in defense of any action, suit or proceeding, or (b) if such person acting in good faith and in a manner he or she reasonably believed to be in the best interest, or not opposed to the best interest, of the Registrant, and with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the Registrant as well but only to the extent of defense expenses, including attorneys’ fees but excluding amounts paid in settlement, actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of liability to the Registrant, unless the court believes that in light of all the circumstances indemnification should apply.

II-1

Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.

The Registrant’s amended and restated bylaws, attached as Exhibit 3.2 hereto, provide that the Registrant shall indemnify its directors and executive officers to the fullest extent not prohibited by the DGCL or any other applicable law. In addition, the Registrant has entered into separate indemnification agreements, attached as Exhibit 10.1 hereto, with its directors and officers which would require the Registrant, among other things, to indemnify them against certain liabilities which may arise by reason of their status or service as directors or officers to the fullest extent not prohibited by law. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of the Registrant’s officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended, which we refer to as the Securities Act. The Registrant also intends to maintain director and officer liability insurance, if available on reasonable terms.

The form of Underwriting Agreement, to be attached as Exhibit 1.1 hereto, provides for indemnification by the Underwriters of us and our officers and directors for certain liabilities, including liabilities arising under the Securities Act, and affords certain rights of contribution with respect thereto.

Item 15. Recent Sales of Unregistered Securities

On May 30, 2013, the Registrant issued 1,000 shares of the Registrant’s common stock, par value $0.001 per share, to LCFH for $1.00. The issuance of such shares of common stock was not registered under the Securities Act because the shares were offered and sold in a transaction exempt from registration under Section 4(2) of the Securities Act.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

The exhibit index attached hereto is incorporated herein by reference.

(b) Financial Statement Schedules.

Refer to Index to Financial Statements on page F-1 of this registration statement.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed

II-2

in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on                     , 2013.

	LADDER CAPITAL CORP (Registrant)
By:
	Brian Harris
	Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Pamela McCormack and Marc Fox and each of them singly, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all (i) amendments (including post-effective amendments) and additions to this registration statement and (ii) any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Title	Date
Brian Harris	Chief Executive Officer and Director (Principal Executive Officer)	, 2013
Marc Fox	Chief Financial Officer (Principal Financial and Accounting Officer)	, 2013
Alan Fishman	Non-Executive Chairman and Director	, 2013
Jonathan Bilzin	Director	, 2013
Howard Park	Director	, 2013

II-4

EXHIBIT INDEX

Exhibit Number		Description
	1.1*	Form of Underwriting Agreement
	3.1*	Form of Amended and Restated Certificate of Incorporation of Ladder Capital Corp
	3.2*	Form of Amended and Restated Bylaws of Ladder Capital Corp
	3.3*	Form of Amended and Restated Limited Liability Limited Partnership Agreement of Ladder Capital Finance Holdings LLLP
	4.1†	Indenture, dated as of September 19, 2012, among Ladder Capital Finance Holdings LLLP, Ladder Capital Finance Corporation and Wilmington Trust, National Association, as trustee
	4.3*	Form of certificate of Class A common stock
	4.4*	Form of Amended and Restated Registration Rights Agreement
	5.1*	Opinion of Kirkland & Ellis LLP regarding the validity of the shares of Class A common stock registered
	10.1*	Form of Employment Agreement
	10.2*	Form of Director Agreement
	10.3*	Form of Tax Receivable Agreement
	10.4*	2013 Omnibus Incentive Plan
	10.5*	Form of Incentive Option Agreement
	10.6*	Form of Nonqualified Stock Option Agreement
	10.7*	Form of Stock Appreciation Rights Agreement
	10.8*	Form of Restricted Stock Agreement
	10.9*	Form of Restricted Stock Unit Agreement
	10.10	2008 Incentive Equity Plan
	10.11	Meridian Loan Referral Agreement
	21.1	Subsidiaries of Ladder Capital Corp
	23.1	Consent of PricewaterhouseCoopers LLP
	23.2*	Consent of Kirkland & Ellis LLP (included in Exhibit 5.1)
	24.1	Power of Attorney (included on signature pages to the registration statement)
	99.1†	Real Estate Operations Acquired and Properties Securing Significant Loans

* To be filed by amendment.

† Filed as Exhibits to Ladder Capital Finance Holdings LLLP and Ladder Capitals Finance Corporation’s Registration Statement on Form S-4 (No. 353-188225), filed on April 29, 2013.

II-5

EX-10.10

Exhibit 10.10

LADDER CAPITAL FINANCE HOLDINGS LLLP

AMENDED AND RESTATED

2008 INCENTIVE EQUITY PLAN

ARTICLE I

Purpose of Plan

Reference is hereby made to that certain 2008 Incentive Equity Plan (the “Original Plan”) of Ladder Capital Finance Holdings LLLP (f/k/a Ladder Capital Finance Holdings LLC) (the “Partnership”), which was adopted by the Partnership’s Board of Directors (the “Board”) on September 22, 2008 (the “Effective Date”). This Amended and Restated 2008 Incentive Equity Plan (the “Restated Plan”) of the Partnership, which amends and restates the Original Plan, was adopted by the Board on February 15, 2012 (the “Restatement Effective Date”), and is intended to advance the best interests of the Partnership by providing certain executives, other key employees and directors of the Partnership or any other Ladder Company (as defined below) with additional incentives by allowing such certain executives, other key employees and directors to acquire an ownership interest in the Partnership. For purposes herein the term this “Plan” shall mean (i) the Original Plan with respect to the period beginning on the Effective Date and ending immediately prior to the Restatement Effective Date and (ii) the Restated Plan with respect to the period on or after the Restatement Effective Date.

ARTICLE II

Definitions

For purposes of the Restated Plan the following terms have the indicated meanings:

“Affiliate” means, when used with reference to a specified Person, any Person that directly or indirectly controls or is controlled by or is under common control with the specified Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise). With respect to any Person who is an individual, “Affiliates” shall also include any member of such individual’s Family Group.

“Approved Company Sale” has the meaning given to such term in the Partnership Agreement.

“Class A-1 Common Units” means the Partnership’s Class A-1 Common Units (as such term is defined in the Partnership Agreement).

“Class A-2 Common Units” means the Partnership’s Class A-2 Common Units (as such term is defined in the Partnership Agreement).

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute.

“Committee” means the Compensation Committee or such other committee of the Board as the Board may designate to administer this Plan or, if for any reason the Board has not designated such a committee, the Board. The Committee, if other than the Board, shall be composed of two or more directors as appointed from time to time by the Board.

“Common Units” means the Partnership’s Common Units (as such term is defined in the Partnership Agreement).

“Fair Market Value” per any particular Class A-2 Common Unit, Series B Participating Preferred Unit or of any other security as of any given date shall be the aggregate amount that the holder of such Class A-2 Common Unit, Series B Participating Preferred Unit or other security, as the case may be, would receive in respect of such Class A-2 Common Unit, Series B Participating Preferred Unit or other security, as the case may be, if, as of such date, the assets of the Partnership (including goodwill) were sold as a going concern for cash (the purchase price of such sale to equal the amount a willing buyer having all relevant knowledge would pay a willing seller in an arm’s length transaction) and the proceeds of such sale were distributed pursuant Section 10.2(b) of the Partnership Agreement (or any other applicable provisions that then govern the distribution of such proceeds to the Partnership’s equityholders after such a sale of assets by the Partnership), all as determined in good faith by the Board, subject to objection as set forth in the terms of any Grant Agreement (as herein defined).

“Family Group” means, with respect to any Person who is an individual, (i) such Person’s spouse, former spouse, ancestors and descendants (whether natural or adopted), parents and their descendants and any spouse of the foregoing persons (collectively, “relatives”), (ii) the trustee, fiduciary or personal representative of such Person and any trust solely for the benefit of such Person and/or such Person’s relatives or (iii) any limited partnership, limited liability company or corporation the governing instruments of which provide that such Person shall have the exclusive, nontransferable power to direct the management and policies of such entity and of which the sole owners of partnership interests, membership interests or any other equity interests are limited to such Person and such Person’s relatives.

“Forfeited Class A-2 Common Unit” has the meaning given to such term in the Partnership Agreement.

“Forfeiture Date” means with respect to any particular Forfeited Class A-2 Common Unit, such Forfeited Class A-2 Common Unit’s “Forfeiture Date” (as determined pursuant to Section 5.9 of the Partnership Agreement).

“Independent Third Party” has the meaning given to such term in the Partnership Agreement.

“Investment Company Act” means the United States Investment Company Act of 1940, as amended.

2

“Ladder Companies” means the Partnership and any of its direct or indirect subsidiaries whether currently existing or hereafter acquired or formed.

“LLC Agreement” means the Partnership Agreement.

“Original Class A-2 Common Unit” has the meaning given to such term in the Partnership Agreement.

“Participant” means any executive, other employee or director of any Ladder Company who has been selected to participate in this Plan by the Committee or the Board.

“Partnership Agreement” means the Limited Liability Limited Partnership Agreement of the Partnership, dated as of August 9, 2011, as amended or restated from time to time.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity or organization.

“Plan Incentive Units” means, with respect to any Participant, (i) all Original Class A-2 Common Units issued to such Participant pursuant to this Plan, (ii) all Forfeited Class A-2 Common Units deemed owned by such Participant pursuant to Section 5.9 of the Partnership Agreement that are directly or indirectly attributable to the Class A-2 Common Units referred to in clause (i) above (but only for so long as such Class A-2 Common Units continue to be “Forfeited Class A-2 Common Units” for purposes of the Partnership Agreement), (iii) all Repurchased Class A-2 Common Units deemed owned by such Participant pursuant to Section 5.10 of the Partnership Agreement that are directly or indirectly attributable to the Class A-2 Common Units referred to in clause (i) above (but only for so long as such Class A-2 Common Units continue to be “Repurchased Class A-2 Common Units” for purposes of the Partnership Agreement), (iv) all equity securities owned or deemed owned by such Participant that are issued with respect to the equity securities referred to in clauses (i), (ii) and (iii) above by way of unit or stock dividend or distribution or stock or unit split in connection with any conversion, merger, consolidation or recapitalization or other reorganization affecting the Class A-2 Common Units, (v) all Series B Participating Preferred Units issued to such Participant pursuant to this Plan and (vi) all equity securities owned or deemed owned by such Participant that are issued with respect to the equity securities referred to in clause (v) above by way of unit or stock dividend or distribution or stock or unit split in connection with any conversion, merger, consolidation or recapitalization or other reorganization affecting the Series B Participating Preferred Units. Unless otherwise provided herein or in a Participant’s Grant Agreement (as defined herein), except in connection with an Approved Company Sale, a Public Sale or a sale resulting from a Participant exercising his or her tag-along rights pursuant to Section 11.1(b) of the Partnership Agreement, Plan Incentive Units will continue to be Plan Incentive Units in the hands of any holder of Plan Incentive Units (except for the Partnership, and except in connection with any Forfeited Class A-2 Common Unit or Repurchased Class A-2 Common Unit becoming a Re-Issued Class A-2 Common Unit pursuant to the terms of the Partnership Agreement), and each such transferee thereof, by acceptance of any such Plan Incentive Units will succeed to the rights and obligations of a holder of Plan Incentive Units hereunder and in the Grant Agreement pursuant to which such Plan Incentive Units are subject.

3

“Public Offering” means an underwritten public offering and sale of Common Units or any common equity securities of any successor entity to the Partnership issued pursuant to a transaction of the type described in Section 13.15 of the Partnership Agreement pursuant to an effective registration statement under the Securities Act.

“Public Sale” means the sale of Plan Incentive Units to the public pursuant to an offering registered under the Securities Act or, after the consummation of a Qualified Initial Public Offering, to the public pursuant to the provisions of Rule 144 (or any similar rule or rules then in effect) under the Securities Act.

“Qualified Initial Public Offering” has the meaning given to such term in the Partnership Agreement.

“Re-Issued Class A-2 Common Unit” has the meaning given to such term in the Partnership Agreement.

“Repurchased Class A-2 Common Unit” has the meaning given to such term in the Partnership Agreement.

“Repurchased Date” means with respect to any particular Repurchased Class A-2 Common Unit, such Repurchased Class A-2 Common Unit’s “Repurchased Date” (as determined pursuant to Section 5.10 of the Partnership Agreement).

“Sale of the Company” means any transaction (other than (A) any issuance by the Partnership of any equity securities of the Partnership to any TowerBrook Fund or any Affiliate of any TowerBrook Fund or (B) any issuance by the Partnership of any Series A Participating Preferred Units or any Series B Participating Preferred Units to any Person, unless the proceeds of such issuance are used by the Partnership primarily to make distributions to the Partnership’s equityholders, in which case, such issuance will not qualify for purposes of this clause (B)) involving the Partnership and an Independent Third Party or affiliated group of Independent Third Parties pursuant to which such Independent Third Party or affiliated group of Independent Third Parties acquire (i) all or substantially all of the Partnership’s issued and outstanding equity securities (including the Series A Participating Preferred Units, Series B Participating Preferred Units, Class A-1 Common Units and Class A-2 Common Units) (whether in a transaction by merger, consolidation, sale of the Partnership’s outstanding equity securities or otherwise) or (ii) all or substantially all of the Partnership’s assets determined on a consolidated basis.

“Securities Act” means the United States Securities Act of 1933, as amended.

“Series A Participating Preferred Units” means the Partnership’s Series A Participating Preferred Units (as such term is defined in the Partnership Agreement).

“Series B Participating Preferred Units” means the Partnership’s Series B Participating Preferred Units (as such term is defined in the Partnership Agreement).

4

“TCP Blocker” means TCP Ladder Blocker, Inc., a Delaware corporation.

“Termination Date” means with respect to any Participant, (i) if such Participant is an employee of a Ladder Company on the date such Participant is granted Original Class A-2 Common Units pursuant to this Plan, then the date that such Participant ceases to be an employee of any of the Ladder Companies for any reason (whether or not such Participant may be a director of a Ladder Company after such date) and (ii) if such Participant is a director of a Ladder Company (and is not an employee of any of the Ladder Companies) on the date such Participant is granted Original Class A-2 Common Units pursuant to this Plan, then the date that such Participant ceases to be a director of any of the Ladder Companies for any reason.

“TowerBrook Fund” means any of the TowerBrook Funds.

“TowerBrook Funds” means TowerBrook Investors II, L.P., TCP Blocker, TowerBrook Investors II Executive Fund, L.P., and any other fund affiliated with TCP (as such term in defined in the Partnership Agreement) that may at any time directly or indirectly own Series A Participating Preferred Units.

“TowerBrook Liquidity Event” means any sale (directly or indirectly, including, through the sale of stock of TCP Blocker or any other corporation that a TowerBrook Fund invests through and into the Partnership) by any TowerBrook Fund or any Affiliate of any TowerBrook Fund of Series A Participating Preferred Units (or any equity securities owned by the TowerBrook Funds and their Affiliates that are issued with respect to Series A Participating Preferred Units by way of unit or stock dividend or distribution or stock or unit split in connection with any conversion, merger, consolidation or recapitalization or other reorganization affecting the Series A Participating Preferred Units, including, without limitation, pursuant to Section 13.15 of the Partnership Agreement) to an Independent Third Party which results in the aggregate original issuance price of the Series A Participating Preferred Units then owned by the TowerBrook Funds and their Affiliates (along with all equity securities owned by the TowerBrook Funds and their Affiliates that are issued with respect to Series A Participating Preferred Units by way of unit or stock dividend or distribution or stock or unit split in connection with any conversion, merger, consolidation or recapitalization or other reorganization affecting the Series A Participating Preferred Units, including, without limitation, pursuant to Section 13.15 of the Partnership Agreement) immediately after such transaction equaling less than 50% of the aggregate amount of Capital Contributions (as such term is defined in the Partnership Agreement) made to the Partnership with respect to the $150 million in aggregate Series A Commitments (as such term is defined in the Partnership Agreement) of TowerBrook Investors II, L.P., TCP Blocker and TowerBrook Investors II Executive Fund, L.P. as of the Effective Date by any TowerBrook Fund or any Person who assumes any portion of such $150 million in aggregate Series A Commitments.

“Valuation Date” means, with respect to any Repurchase Option (as herein defined), the applicable Termination Date that has resulted in such Repurchase Option becoming exercisable by the Partnership.

5

ARTICLE III

Administration

This Plan shall be administered by the Committee. Subject to the limitations of this Plan and the Partnership Agreement, the Committee shall have the sole and complete authority to: (i) select Participants, (ii) issue and grant Class A-2 Common Units and/or Series B Participating Preferred Units to Participants in such forms and for such amounts as it shall determine, (iii) impose such limitations, restrictions and conditions upon Plan Incentive Units as it shall deem appropriate, (iv) interpret this Plan and adopt, amend and rescind administrative guidelines and other rules, procedures and regulations relating to this Plan, (v) correct any defect in this Plan, and (vi) make all other determinations and take all other actions necessary or advisable for the implementation and administration of this Plan. The Committee’s reasonable determinations on matters within its authority shall be conclusive and binding upon the Participants, the Partnership and all other Persons. All expenses associated with the administration of this Plan shall be borne by the Partnership. The Committee may, as approved by the Board and to the extent permissible by law, delegate any of its authority hereunder to such Persons as it deems appropriate.

ARTICLE IV

Rights and Obligations with respect to Plan Incentive Units

4.1 Vesting of Plan Incentive Units. At the discretion of the Committee, exercised at the time of issuance and/or grant, Plan Incentive Units may vest, in one or more installments, upon (i) the fulfillment of certain conditions, (ii) the passage of a specified period of time, and/or (iii) the achievement by any or all of the Ladder Companies of certain performance goals.

4.2 Right to Purchase Plan Incentive Units as a Result of a Termination Date.

(a) Repurchase Right. If, with respect to any Participant, such Participant’s Termination Date occurs, then such Participant’s Plan Incentive Units (whether held by such Participant or one or more transferees) will, at the Partnership’s election, be subject to repurchase by the Partnership pursuant to the terms and conditions set forth in this Section 4.2 (the “Repurchase Option”) at a price per Plan Incentive Unit equal to the Fair Market Value per Plan Incentive Unit determined as of the Valuation Date, less the amount of any cash distributed by the Partnership with respect to such Plan Incentive Unit between the applicable Valuation Date and the closing of the applicable repurchase.

(b) Repurchase Procedures. The Repurchase Option is exercisable by the Partnership delivering written notice (the “Repurchase Notice”) to the holder or holders of the applicable Plan Incentive Units at any time during the 210 day period beginning on the applicable Termination Date. The Repurchase Notice will set forth the number of Plan Incentive Units to be acquired from such holder(s), an estimate of the aggregate consideration to be paid for such holder’s Plan Incentive Units and the time and place for the closing of the transaction.

6

(c) Closing of Repurchase. The closing of the transactions contemplated by this Section 4.2 will take place on the date designated by the Partnership in the Repurchase Notice, which date will not be more than 60 days after the delivery of such notice except as may otherwise be provided for pursuant to the Grant Agreement for the applicable Plan Incentive Units. The amount of the repurchase price to be paid for any Plan Incentive Units to be purchased by the Partnership pursuant to a Repurchase Option shall be determined pursuant to Section 4.2(a) hereof and the aggregate amount of such repurchase price shall be referred to herein as the “Aggregate Repurchase Price”. The Partnership will pay the applicable Aggregate Repurchase Price for any Plan Incentive Units to be purchased by the Partnership pursuant to a Repurchase Option by delivery of a check payable to or by wire transfer to an account or account(s) designated by the holder(s) of such Plan Incentive Units in an aggregate amount equal to the applicable Aggregate Repurchase Price for such Plan Incentive Units. The Partnership will receive from each seller regarding the sale of Plan Incentive Units the representation that such seller has good and marketable title to such Plan Incentive Units and that such Plan Incentive Units will be transferred to the Partnership free and clear of all liens, claims and other encumbrances.

ARTICLE V

General Provisions

5.1 Written Agreement. Each issuance and grant of Class A-2 Common Units and/or Series B Participating Preferred Units hereunder shall be embodied in a written agreement (the “Grant Agreement”) which shall be signed by the Participant to whom such Common Units are issued and granted and shall be subject to the terms and conditions set forth in this Plan.

5.2 Rights of Participants. Nothing in this Plan shall (i) interfere with or limit in any way the right of any Ladder Company to terminate any Participant’s employment at any time (with or without cause), or confer upon any Participant any right to continue to be employed by any Ladder Company for any period of time or to continue to receive such Participant’s current (or other) rate of compensation or (ii) interfere with or limit in any way the right of any Person with the authority to remove a Participant that is a director of any Ladder Company to remove such Participant from such position as a director of such Ladder Company for at any time for any reason, or confer upon any such Participant that is a director of a Ladder Company any right to continue to be a director of such Ladder Company for any period of time or to continue to receive such Participant’s current (or other) rate of compensation, if any, for being such a director. No executive, employee or director of any Ladder Company shall have a right to be selected as a Participant or, having been so selected, to be selected again as a Participant.

5.3 Amendment, Suspension and Termination of Plan. The Board or the Committee may suspend or terminate this Plan or any portion thereof at any time and may amend it from time to time in such respects as the Board or the Committee may deem advisable; provided, however, that no such amendment, suspension or termination shall impair or alter the rights of a Participant with respect to outstanding Plan Incentive Units without the consent of such Participant. The Restated Plan amends and restates the Original Plan in its entirety.

7

5.4 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee, the members of the Board and Committee shall be indemnified by the Partnership against (i) all costs and expenses reasonably incurred by them in connection with any action, suit or proceeding to which they or any of them may be party by reason of any action taken or failure to act under or in connection with this Plan or any Plan Incentive Units issued or granted under this Plan, and (ii) all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Partnership) or paid by them in satisfaction of a judgment in any such action, suit or proceeding; provided, however, that any such Board or Committee member shall be entitled to the indemnification rights set forth in this Section 5.4 only if such member (1) acted in good faith and in a manner that such member reasonably believed to be in, and not opposed to, the best interests of the Partnership, and (2) with respect to any criminal action or proceeding, (A) had no reasonable cause to believe that such conduct was unlawful, and (B) upon the institution of any such action, suit or proceeding, a Board or Committee member shall give the Partnership written notice thereof and an opportunity to handle and defend the same before such Board or Committee member undertakes to handle and defend it on his own behalf.

5.5 Restricted Securities. All Plan Incentive Units shall constitute “restricted securities,” as that term is defined in Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, and may not be transferred except in compliance with the registration requirements of the Securities Act or an exemption therefrom.

5.6 Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any rules, principles or provisions of choice of law or conflict of laws (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

*     *     *     *     *

8

EX-10.11

Exhibit 10.11

EXECUTION COPY

LOAN REFERRAL AGREEMENT

This LOAN REFERRAL AGREEMENT (this “Agreement”) is made as of September 22, 2008 by and between Ladder Capital Finance LLC (the “Company”) and Meridian Capital Group, LLC (“Meridian”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Amended and Restated Limited Liability Company Agreement of Ladder Capital Finance Holdings LLC (“Holdings”), dated as of the date hereof.

The parties hereto hereby agree as follows:

1. Engagement of Meridian. The Company hereby engages Meridian, and Meridian hereby accepts such engagement, to act as a source of referrals with respect to commercial real estate loans to be originated by the Company.

2. Engagement Period. Meridian shall be engaged by the Company pursuant to the terms set forth herein for the period (the “Engagement Period”) beginning on the date hereof and ending on the Termination Date. For purposes of this Agreement, the term “Termination Date” shall mean the date that the Company provides Meridian with written notice of the termination of this Agreement, which notice may be provided on or after the first to occur of: (a) an Approved Company Sale; (b) a Public Offering; (c) the date that none of Meridian LCF or any of its Permitted Transferees is a member of Holdings; and (d) the date that is the tenth Business Day after receipt by Meridian LCF of written notice from the Company to Meridian LCF regarding Meridian LCF’s failure to make full payment of any portion of its Commitment when due (provided that such failure is not cured by Meridian LCF prior to such date). The obligations of the parties hereto shall cease on the Termination Date, except for the final payment contemplated to be made following the Termination Date pursuant to Section 4(a) below and the rights and obligations of the parties pursuant to Section 4(b) in connection therewith.

3. Procedures for Loan Referrals. With respect to each prospective commercial real estate loan referred by Meridian to the Company during the Engagement Period (each, a “Prospective Loan”), Meridian shall provide the Company with the documentation necessary for the Company to evaluate such Prospective Loan (including, without limitation, a waiver (the “Borrower Waiver”) in the form of Exhibit A attached hereto duly executed by the prospective borrower under such Prospective Loan and any other information regarding such borrower that the Company may reasonable request). With respect to each Prospective Loan, the Company, in its sole discretion, shall decide to originate, or decline to originate, such Prospective Loan upon any terms or conditions that Company deems appropriate (any such Prospective Loan so originated and funded by the Company, an “Eligible Loan”). The Company agrees to provide a list of all existing Eligible Loans to Meridian no later than ten (10) business days after the end of each calendar month.

4. Meridian’s Compensation.

(a) After the end of each calendar year, the Company shall pay Meridian a fee equal to 8% of the aggregate Eligible Loan Net Profit (as defined below) with respect to such calendar year (the “Referral Fee”), which fee shall be paid in a single annual payment by the

Company to Meridian by no later than 120 days after the end of the applicable calendar year; provided that the Company shall not be required to pay, and Meridian shall have no right to receive, any Referral Fee if the Engagement Period is terminated pursuant to Section 2(d); provided, further, that if the aggregate Eligible Loan Net Profit with respect to any calendar year is a negative number, the Referral Fee with respect to such calendar year shall be zero dollars. “Eligible Loan Net Profit” means, with respect to any particular Eligible Loan as measured during any calendar year, an amount (which may be a negative number), as determined by the Company’s board of directors (or similar governing body) in good faith based on the Company’s books and records in accordance with the Company’s past practices, equal to (i) the total consolidated interest income recognized by Ladder Midco LLC and its subsidiaries (including the Company) (collectively, the “Ladder Companies”), minus (ii) the consolidated expenses recognized by the Ladder Companies (including with respect to any interest or fees paid in respect of any of the Ladder Company’s loan facilities), minus (iii) any consolidated losses recognized or reserves established by the Ladder Companies, in each case, with respect to such Eligible Loan for such calendar year. In the event the Agreement is terminated pursuant to Section 2, Meridian shall be entitled to a final payment of the Referral Fee which shall be payable by no later than 120 days after the end of the calendar year in which the Termination Date occurs. The compensation described in this Section 4 shall be Meridian’s sole and exclusive compensation for all of its services and efforts provided to the Company in connection with Meridian’s engagement hereunder. Meridian shall pay all of its own costs and expenses in carrying out its activities hereunder. Meridian shall be exclusively responsible for any compensation, fees, commissions or payments of its employees, agents, representatives or other persons or entities utilized by it in connection with its activities on behalf of the Company and Meridian will indemnify the Company and hold it harmless from the claims of any such persons or entities.

(b) Meridian shall have the right to review the computations and work papers and underlying books and records used in connection with the determination of the Eligible Loan Net Profit and the Referral Fee (including the determination of which loans are Eligible Loans), and to have reasonable access upon prior notice to the employees and accountants of the Company. Meridian and the Company shall discuss and attempt to resolve in good faith any disagreement or dispute in the calculation of the Eligible Loan Net Profit and the Referral Fee (including the determination of which loans are Eligible Loans).

5. Borrower Waiver. Notwithstanding anything to the contrary contained herein, under no circumstance shall the Company be required to pay any portion of the Referral Fee or any other amount to Meridian that is attributable to an Eligible Loan with respect to which no Borrower Waiver has been provided to the Company.

6. Representations and Warranties. Meridian hereby represents, certifies and warrants to the Company as follows:

(a) Meridian has and shall maintain such registrations as well as all other necessary licenses and permits to conduct its activities under this Agreement, which it shall conduct in compliance with all applicable federal and state laws;

2

(b) Meridian is not a party to any other agreement which would conflict with or interfere with the terms and conditions of this Agreement;

(c) the Referral Fee represents the full amount payable by the Company to Meridian in connection with any Eligible Loan and no other amount will be due or payable by the Company to Meridian in connection therewith;

(d) Meridian will (x) obtain the Borrower Waiver from each borrower and its principals under any Prospective Loan and (y) accurately and fully answer any oral or written inquiry from such borrower or principal to Meridian or the Company regarding Meridian LCF’s investment in Holdings, the Referral Fee and/or the Borrower Waiver; and

(e) Meridian understands that the Company will include its customary broker/referral release and disclosure language in its operative loan documents in connection with any Eligible Loan.

7. Assignment Prohibited. No assignment of this Agreement shall be made by any party hereto without the prior written consent of the other party hereto, which consent shall be granted in such other party’s sole discretion and any such assignment without such consent shall be null and void.

8. Amendments. This Agreement may be amended only with the written consent of all of the parties hereto.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any rules, principles or provisions of choice of law or conflict of laws (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

10. Waiver. Neither the failure of any party hereto to insist at any time upon strict compliance with this Agreement or any of its terms nor any continued course of such conduct on the part of any such party shall constitute or be considered a waiver by such party of any of its respective rights or privileges under this Agreement.

11. Severability. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect.

12. Counterparts. This Agreement may be executed in one or more counterparts (including by way of facsimile transmission or scanned pages), each of which shall be deemed an original, and will become effective and binding upon the parties at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the same counterpart.

3

13. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties concerning the subject matter hereof are merged herein.

*        *        *         *

4

IN WITNESS WHEREOF, parties hereto have executed this Loan Referral Agreement as of the date first written above.

LADDER CAPITAL FINANCE LLC
By:
	Name:	Glenn Miller
	Title:	Vice President
MERIDIAN CAPITAL GROUP, LLC
By:
	Name:
	Title:

IN WITNESS WHEREOF, parties hereto have executed this Loan Referral Agreement as of the date first written above.

LADDER CAPITAL FINANCE LLC
By:
	Name:
	Title:
MERIDIAN CAPITAL GROUP, LLC
By:
	Name:
	Title:

EXHIBIT A

MERIDIAN CAPITAL GROUP LLC

1 Battery Park Plaza

New York, New York 10021

            , 200    

[BORROWER NAME AND ADDRESS]

Re: [Reference loan(s)/property address(es) (the “Loan(s)”)]

[Names of Borrower(s)/Sponsor(s)]:

Reference is hereby made to the Loan(s) made to                      (“Borrower(s)”), which Loan(s) was/were brokered by Meridian Capital Group LLC (“Broker”) and may be originated by Ladder Capital Finance LLC or one of its affiliated entities (collectively, “LCF”).

Borrower hereby acknowledges and agrees that Broker has disclosed to Borrower that Broker (and/or one of its affiliates) has a strategic investment in LCF and, in connection therewith, LCF has agreed to pay to Broker and Broker has agreed to accept from LCF, eight percent (8%) of the profits on certain loans originated by LCF that were referred by Broker to LCF (the “Broker Payment”), including the Loan(s).

Borrower further hereby acknowledges and agrees that (i) Borrower understands that the Broker Payment is in addition to any compensation being paid to Broker by Borrower or any other party, if and as applicable, and (ii) Broker has fully and adequately answered any questions or concerns Borrower may have regarding Broker’s (and/or its affiliates’) strategic investment in LCF and Broker’s right to receive the Broker Payment.

Very truly yours,
MERIDIAN CAPITAL GROUP, LLC
By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED

AS OF             , 200    :

[BORROWER(S)]:

By:
	Name:
	Title:
[SPONSOR(S)]:
By:
	Name:
	Title:

7

EX-21.1

Exhibit 21.1

Subsidiaries of

Ladder Capital Corp

Exact Name of Subsidiaries of Registrant as Specified in their Charter	State or Other Jurisdiction of Incorporation or Organization
Ladder Capital Finance Holdings LLLP	Delaware
Ladder Capital Finance Corporation	Delaware
Ladder Midco LLC	Delaware
Ladder Capital Adviser LLC	Delaware
LCR Income I GP LLC	Delaware
Ladder Member Corporation	Delaware
Ladder Midco II LLC	Delaware
Ladder Capital Securities LLC	Delaware
Ladder Capital Finance LLC	Delaware
Ladder Capital Commercial Mortgage Securities LLC	Delaware
Ladder Capital Finance I LLC	Delaware
Ladder Capital Finance II LLC	Delaware
Ladder Capital Finance III LLC	Delaware
Ladder Capital Finance IV LLC	Delaware
Ladder Capital Finance V LLC	Delaware
Ladder Capital Finance Portfolio II LLC	Delaware
Ladder Capital Realty II LLC	Delaware
Ladder Capital Insurance LLC	Delaware
Tuebor Captive Insurance Company LLC	Michigan
LC Carmel Retail LLC	Delaware
LVT JV Member LLC	Delaware
LVT JV LLC	Delaware
LVT Owner LLC	Delaware
ONP JV Member LLC	Delaware
ONP JV LLC	Delaware
ONP Owner LLC	Delaware
ONP Rooftop JV Member LLC	Delaware
ONP Rooftop JV LLC	Delaware
IOP JV Member LLC	Delaware
IOP JV LLC	Delaware
Lingerfelt Office Properties LLC	Delaware
Lingerfelt Office Properties 2 LLC	Delaware

Exact Name of Subsidiaries of Registrant as Specified in their Charter	State or Other Jurisdiction of Incorporation or Organization
Lingerfelt Office Properties 3 LLC	Delaware
PAV JV Member LLC	Delaware
PAV JV LLC	Delaware
PAV Owner LLC	Delaware
Ladder Grace Lake Member LLC	Delaware
Ladder Capital CRE Equity LLC	Delaware
LACSVGA LLC	Delaware
LACCBSC LLC	Delaware
LAS Jonesboro LLC	Delaware
LAS Mt Juliet LLC	Delaware
LAS Wichita LLC	Delaware
LBWPIMA LLC	Delaware
LBW Portfolio I LLC	Delaware
LBWNDMA LLC	Delaware
LBW Mooresville LLC	Delaware
LBW Saratoga LLC	Delaware
LBW Sennett LLC	Delaware
LBW Tilton LLC	Delaware
LBW Vineland LLC	Delaware
LBW Waldorf LLC	Delaware
LDGDSFL LLC	Delaware
LDGMBFL LLC	Delaware
LDGOCFL LLC	Delaware
LDGSSFL LLC	Delaware
LDG Yulee LLC	Delaware
LMW Houston LLC	Delaware
LWAG Millbrook LLC	Delaware
LWAG Greewood AR LLC	Delaware
LWAG Gallatin LLC	Delaware
LWAG Aiken LLC	Delaware
LWAG Durant LLC	Delaware
LWAG Johnson City LLC	Delaware

2

Exact Name of Subsidiaries of Registrant as Specified in their Charter	State or Other Jurisdiction of Incorporation or Organization
LWAG Palmview LLC	Delaware
LWAG Ooltewah LLC	Delaware
LWAG Mount Airy LLC	Delaware
LWAG Abingdon LLC	Delaware
Ladder Midco III LLC	Delaware
Ladder Capital Finance Revolver I Parent LLC	Delaware
Ladder Capital Finance Revolver I LLC	Delaware
Ladder Capital Realty Finance Trust	Maryland
Ladder Capital Realty (TRS) Inc	Delaware
Ladder Capital Finance Portfolio LLC	Delaware
Ladder Capital Realty CMBS IV LLC	Delaware
Ladder Capital Realty Equity LLC	Delaware
LWAGLXSC LLC	Delaware
LWAGTPMS LLC	Delaware
LWAGEKMD LLC	Delaware
LWAGDVGA LLC	Delaware
LWAGLBGA LLC	Delaware
LWAGSBSC LLC	Delaware
LCR Income I LP LLC	Delaware
Ladder Capital Realty Income Partnership I LP	Delaware
LCR Income Finance I LLC	Delaware
LCRIP Finance I LP	Delaware
LCR Income Finance II LLC	Delaware
LCRIP Finance II LP	Delaware
Ladder Capital Realty Finance Midco LLC	Delaware
Ladder Capital Realty Finance III LLC	Delaware
Ladder Capital Realty Finance V LLC	Delaware
Ladder Capital Realty Finance ERF Parent LLC	Delaware

3

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of Ladder Capital Corp of our report dated June 27, 2013 and our report of Ladder Capital Finance Holdings LLLP dated March 28, 2013, except for Note 14, the Master Repurchase Agreement paragraph in Note 16, the financial statement schedules and the effects of the Registration paragraph described in Note 2 to the consolidated financial statements, as to which the date is April 29, 2013, and except for the earnings per unit information included in Note 15 and the consolidated statement of income, as to which the date is June 27, 2013, relating to the financial statements and financial statement schedules of Ladder Capital Finance Holdings LLLP and our reports dated April 29, 2013, relating to the statements of revenue and certain expenses for the Abingdon, Aiken, Johnson City, Ooltewah, Palmview, Middleburg and Satsuma properties for the year ended December 31, 2011, which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

New York, New York

June 27, 2013